Ukraine: Barley exports could more than halve due to drop in demand from China

Ukraine could more than halve barley exports in September compared to August due to a drop in purchases of this crop by China, Ukrainian media reported, quoting analysts from First Ukrainian Agricultural Cooperative (FUAC), set up within the Ukrainian Agri Council (UAC) framework.

"The Ukrainian barley market is undergoing significant changes that affect export prospects. Preliminary predictions for September are worrisome. The volume of contracts for August is 600,000 tonnes, while only 280,000 tonnes are contracted for September," the FUAC analysts said.

They said the main reason for this was decline in demand from China, which used to account for more than half of Ukraine's barley exports.

"The Chinese factor plays a significant role here, as China previously accounted for 55-56% of the geographical structure of Ukrainian barley exports. China is not expected to return to the Ukrainian grain as actively, but will probably shift its focus to Australian barley, which will be received in December-January. Without Chinese contracts, monthly exports of Ukrainian barley will not exceed 300,000 tonnes," FUAC said.

It said such a reduction in demand from China was already beginning to be felt in the domestic market: some traders are already stopping barley acceptance, switching to other crops, such as corn.

The analyst said there was a high correlation between the barley and wheat markets, and they predict that the expected rise in wheat prices will also contribute to the rise in barley prices.

"The notional barley prices are still in the range of $170-172 per tonne. We can expect that the wheat market will pull the barley market along with it. Therefore, by the end of August and beginning of September, barley prices may increase slightly. But starting from September, barley may become a more niche crop," FUAC said.

22 August, 2024