The Ukrainian barley market is undergoing significant changes that affect export prospects. As of August 19, exports of this grain reached 315,000 tonnes, but preliminary predictions for September are worrisome.

This is reported by the analysts of the First Ukrainian Agricultural Cooperative (FUAC), created within the UAC.

“The volume of contracts for August is 600,000 tonnes, while only 280,000 tonnes are contracted for September. This is almost half as much,” the FUAC noted, emphasizing the sharp decline in contracts for the next month.

The main reason for this is the decline in demand from China, which previously accounted 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 focus its attention to Australian barley, which will be received in December-January. Without Chinese contracts, monthly exports of Ukrainian barley will not exceed 300,000 tonnes,” explained the analytical department of the FUAC.

Such a reduction in demand from China is already beginning to be felt in the domestic market.

“Some traders are already stopping barley acceptance, switching to other crops, such as corn,” the analysts said.

They emphasize the high correlation between the barley and wheat markets, so they predict that the expected rise in wheat prices may also contribute to the rise in barley prices.

“The notional barley prices are still in the range of USD170-172 per ton. We can expect that the wheat market will “pull” the barley market. 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.” summarized FUAC.