E-Malt.com News article: 2896

Australia: Canberra: Australian grain marketer ABB Grain Ltd. cut on Monday, July 5, its estimate of returns for barley sales. Managing director Michael Iwaniw is attributing the decline to a number of global and domestic factors. Factors cited include a cut in import subsidies by Saudi Arabia, the world's largest importer of feed barley, large European crops and undercutting of Australian prices by eastern European sellers, Dow Jones posted on July 5. Iwaniw said Australian barley prices were also being undermined by an increasing number of sellers, who are undercutting prices to achieve sales.

As a result, ABB Grain reduced its estimate of returns for growers through its collective sales program for barley grown last crop year ended March 31, 2004, and its estimate for the crop to be harvested this crop year. ABB Grain cut its estimated return for number one pool old crop feed barley by A$7 to a range A$170-A$180 a metric ton and dropped the new crop pool by A$12 to a range A$135-A$145/ton.

The estimate of returns for old crop malting barley was cut A$5 to a range of A$200-A$210/ton, while the new crop estimate was cut A$10 to a range of A$165-A$175/ton.

ABB Grain holds an export monopoly over barley produced in South Australia and accumulates barley and other grains elsewhere, some of which it sells through collective sales pools. The company is a major global supplier of the cereal. Iwaniw said old crop malting barley pools are still quite strong, with the company holding some unsold stocks.

The soft feed barley market could flow on and undermine malting barley prices further, he said. Iwaniw said the Saudi import subsidy decrease has affected the prices achievable there, and also affected stocks of barley in the country and stocks due to be imported.

The "enormous" barley crops to be harvested in Europe had also helped to push prices lower, with buyers pulling back from purchasing grain, preferring instead to run down existing stocks, he said. New crop sales from eastern European countries are "causing international prices to plummet," he said. "The market has also been affected by exports from Australia by multiple sellers competing against one another, also bringing prices down in the process," he said.

Until several years ago, ABB Grain also held an export monopoly over barley produced in Victoria, a major barley producing state, but this market now is deregulated.



07 July, 2004