Purchase prices for barley in Ukraine continue to rise

In 2022/23, Ukraine almost halved its barley production compared to the previous season, while Russia increased it by 30%. The shortage of offers and increased competition on the world market complicate the prospects for the export of domestic grain.

This year, 5.5 million tons of barley were threshed from 1.6 million hectares in Ukraine, while last year 9.4 million tons were harvested from 3.63 million hectares, and in 2020/21 MR - 7.6 million tons of barley. However, if in 2020/21 MR the export of barley amounted to 4.2 million tons, then in 2021/22 MR it grew by 37% to 5.8 million tons, and in 2022/23 MR it is forecast at the level of 2-3 million tons per against the background of an increase in temporary stocks. China bought almost 45% of the barley exported from Ukraine for the last two seasons in a row, in particular, 2.9 million tons in 2020/21 MR, and 2.6 million tons in 2021/22 MR.

In the current season, as of September 26, only 0.63 million tons of barley were exported, of which 0.3 million tons were exported in September, as export demand is low and traders prefer more profitable crops such as canola and wheat. Against the background of increased barley production in the EU and Canada, a record harvest in Australia and the war in Ukraine, demand for domestic barley from China is almost non-existent.

Barley production in the Russian Federation will increase compared to last year from 18 to 23 million tons, of which 6-6.5 million tons will be exported. The strengthening of competition between Ukrainian and Russian sellers is beneficial to Turkish importers, who bought 1.1 million tons of barley in Ukraine last year.

Against the background of limited supply and increased demand, purchase prices for barley in Ukrainian ports rose to UAH 6,500-7,000/t SRT or $165-185/t compared to $130-160/t at the beginning of the season. In addition, they are supported by the active growth of feed wheat and corn prices, which have already exceeded $200/t SRT.

It is worth noting that processors immediately offered a high price of 6,500-7,000 UAH/t for malting barley from the beginning of the season, as they expected a shortage of supplies and poor grain quality due to long rains, and now its prices have risen to 7,000-7,500 UAH/t with delivery on plant.

Increased competition between processors, breeders and exporters against the backdrop of limited supply from producers and sales restraint by them will support barley prices in the near term.