Barley: Lower prices seem to persist further
August 31, 2017 at 12:45 PM ,
Starry Night Ltd.
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 |