Australia: Barley exports drop to 130,000 tonnes in October

Australia exported 130,009 tonnes of barley and 188,558t of sorghum in October, according to the latest data from the Australian Bureau of Statistics.

The barley figure comprises 90,679t of feed and 39,330t of malting, with both totals less than half the amounts shipped in September to represent the annual rundown in stocks.

The sorghum drop was less drastic, down 42pc from the September total of 323,448t.

On feed barley, China was the destination for 79,184t, or 87pc of barley shipped, with Thailand on 5397t and Vietnam on 1999t the second and third-biggest markets respectively.

Japan on 22,094t was the surprise major destination for October-shipped malting barley, followed by China on 11,254t and Mexico on 3000t.

China on 184,713t bought almost all of Australia’s October-shipped sorghum, with Taiwan on 2083t and The Philippines on 1672t the second and third-biggest markets respectively.

Flexi Grain pool manager Sam Roache said barley exports for October were the smallest monthly figure in many years, reflecting the record tight carry-out and a lack of new-crop options for the opening month of the shipping year.

“With this figure, it would be understandable to worry about Chinese demand, combined with some negative demand narrative, and August rumours about government grain import limitations, but the reality is demand has exceeded expectations and the October figure was 100pc due to Australian supply,” Mr Roache said.

Recent Chinese demand has been consistently strong, with November shipments expected to total around 700,000t, and December more than 800,000t.

“We already see shipping stems in January building to over 300,000t, so it will be another strong month.”

Mr Roache said Australia has been seeing both feed and malting demand, and has been well priced and amply supplied versus other origins, including Canada, which is facing some political uncertainty with China.

“Also notable is lower French production and smaller carry-in, which is limiting Australia’s largest competitor into the world’s largest barley buyer.”

“From here, we expect to see big monthly exports continue, which will be underpinned by the Western Australian farmer, due to smaller crops and available exports in South Australia and Victoria.

“Southern NSW has been a recent participant on higher quality feed/FAQ and malt in containers and NSW has been shipping some bulk, but liquidity is slowing a bit in southern NSW and local users are pressing on price to slow down exports.

“We may have already seen the peak pressure from this area.”

With the smaller carry-in stocks this season, Mr Roache said the market was more beholden to the farmer, especially in WA.

“Any slowdown in selling will tighten markets and can force Chinese levels higher.”

Overall, Mr Roache said smaller global barley availability, including from Australia, would limit Chinese purchases this season, with no chance of making last year’s record 16Mt imports.

“An expected 10-11Mt import year this season will see feed demand need to be cut in half, and we are yet to see if that is priced into the market; barley prices will drive that change in buying.”

Beyond China, Australia was last week pricing new-crop malting barley into Central and South America, and more malting demand is expected from Japan in coming months.

“Australia remains similarly competitive versus last season on the higher-quality barley going to markets outside China.”

On sorghum, the trade continued to export ahead of chickpeas and wheat taking over the shipping stems and driving execution costs higher over November-March.

Mr Roache said sorghum exports to China are expected to continue.

“Total sorghum demand continues strongly into China, with recent shipments in line with early season volumes, and US-Argentine making up for Australia’s declining percentage.

“We see potential retaliatory tariffs from China affecting US competitiveness and China’s appetite for US products in the medium term, which will bode well for Australian sorghum demand.

“Outside of this, we see a fairly negative demand picture painted, but the actual shipments aren’t reflecting this poor scenario.”

12 December, 2024