Ukrainian farmers contracted 120,000 tons of barley for export to China in July. It is expected that 30-40% of Ukraine's total grain exports will go to this country. So far, more than 1.5 million tons of barley have been harvested, and the harvest forecast is 5-6 million tons.

This issue was discussed during the analytical briefing of the First Ukrainian Agricultural Cooperative (FUAC), created within the UAC.

"The global barley market is formed by the EU, but Ukraine faces strong competition from Romanian grain. When buyers such as Cyprus and Italy enter the market, French and Romanian barley is mainly exported there. According to predictions, this year's barley harvest in the EU will add 11 million tons. The main buyers of barley on the world market are China and Saudi Arabia, which buy 50-60% of the total volume," analysts explained.

July is expected to be a weak month for exports, and prices may not rise as supply increases due to the intensification of the harvesting campaign. Only about 20% of Ukraine's harvest has been harvested so far, and supply will continue to grow as the season has not yet started in full force.

"Currently, the notional prices in Ukrainian seaports are 154-157 USD per ton, while the "Chinese quality" of barley, i.e. grain certified for sale to China, is estimated at 162 USD per ton. Seasonal models show a downward trend in prices. There is a risk of prices falling to 140-150 USD per ton under the pressure of the harvest, but there is a possibility of a return to 165 USD per ton in the fall in Odesa ports," analysts said.

There is also a risk of losing the premium for barley certification for trade with China.

"Chinese quality" barley is traded at a premium of 5-7 USD per ton. There has already been contracts for Ukrainian barley for July-August, but no further contracts have been signed. The question remains whether Chinese buyers will return in the fall. If China does not come to the market with demand for barley in early August, the premium may disappear for those who have certified their products for the Chinese market," - analysts summarized.

Wednesday, 10 July 2024


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