Barley: Lower prices seem to persist further

August 31, 2017 at 12:45 PM , Starry Night Ltd.
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Regional trends are too influential to work in favor of local market players.

Barley: high quality crop clutched in low prices

SOFIA. The high quality crop and the lower national production of harvest 2017-18 are losing ground to regional forces and fail to turn the price trend in favor of local farmers. What is worse, local selling parties do not see any reasons the price trend to change direction any time soon. They should consider themselves lucky if regional supply does not push price further down, but instead remains arrested at its current level in the medium- and long-term.

The most recent estimates, released by the Ministry of Agriculture, show an aggregate output of 620,371 mt, with an average yield of 4.75 mt/ha. Although the yield is higher by 7.5% on a year-to-year basis, national output lags by as much as 13.6% because farmers planted by about 20% less barley for harvest in 2017. The reasons are painfully clear: lower prices and declining exports during recent years. Harvest of Spring barley is under way.

Harvest 2017-18

(01.07.2017 - 25.08.2017)

Carry over

22,000  mt

Domestic output (including Spring barley)

632,018 mt

Domestic consumption

48,000 mt

Exports to the world

187,674 mt

Source: Bulgarian Ministry of Agriculture

Domestic and foreign trade

On the domestic front, trade activity goes as usual on a weekly basis, as substantial increase is expected later in the marketing season when local farmers turn to using the crop as a substitute for feed wheat. However, if the current competitive prices of wheat persist for later in the year, barley holders might become surprised at the lower rate of local demand.

Last week’s exports of 13,700 mt all went to countries outside the EU market. Lower international prices seem to slow down export activities to EU member countries, which in the beginning of the season recorded a steep increase. Usually, the main market of barley outside the EU block is Libya.

 

Barley, Bulgaria

Type

EUR/kg

feed barley

0.128

EXW Bulgaria

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