Ukrainian barley crop poised for sharp drop

The pace of spring seeding is much lower than last year — 2.64 million acres as of the end of April instead of 3.66 million

The world’s largest barley exporter is going to have a lot less crop to ship this year, according to a new production estimate.

Irina Ozip, an analyst with APK-Inform, a Ukrainian agricultural consultancy, is forecasting 6.83 million tonnes of Ukrainian barley production, a 23 percent drop from 2019-20.

That is due primarily to a 16 percent reduction in acres.

Winter barley was seeded into extremely dry conditions and there was an April frost that damaged about half of the crop but there is a good probability of recovery due to improved weather.

The pace of spring barley seeding is much lower than the previous year. Farmers had planted 2.64 million acres as of the end of April, down from 3.66 million acres the same time a year ago.

She anticipates a 27 percent drop in spring plantings. About half of the crop is planted in the fall and the other half in the spring.

“The planting area of the barley will significantly decrease in 2020,” Ozip said during a recent webinar.

The International Grains Council is forecasting 7.9 million tonnes of Ukrainian barley production, a 17 percent drop from the previous year.

MarketsFarm analyst Bruce Burnett said Ukraine’s struggles are mildly good news for Canadian farmers.

“It does tighten up the barley situation, which would be beneficial for Canada and the (European Union) when we harvest our crops in terms of garnering a little more export demand,” he said.

But he doubts it will have a profound impact on Canadian prices. It will more likely impact sales opportunities into the Middle East for Australia and the European Union.

FarmLink Marketing Solutions analyst Neil Townsend said Ukraine primarily exports feed barley while Canada mostly ships malt barley, so Ukraine’s problems likely won’t have huge ramification for Canadian growers.

But it does mean less volume on the world market from one of the world’s top exporters of the crop.

Russia is another major exporter. Ozip is forecasting 19.45 million tonnes of production, a five percent drop from the previous year. The IGC had similar numbers.

Townsend is more interested in what happens in Australia. The IGC is forecasting 9.4 million tonnes of production, a six percent increase over last year.

However, Australia is embroiled in a trade dispute with China that saw the Chinese recently slap an 80.5 percent tariff on Australian barley exports.

That will create a marketing opportunity for Canadian exporters of the crop unless China decides to go after Canadian barley as a retaliation target in response to the recent Meng Wanzhou court ruling, said Townsend.

But he considers that unlikely because China won’t want to cut off both of its top suppliers.

“We have our own bugaboo with Saudi Arabia, the world’s biggest importer of barley,” said Townsend.

“We don’t have access to that market because they’re still in a tantrum against us.”

The dispute surrounds Canada’s criticism of Saudi Arabia’s human rights record.

Townsend said the country was a sporadic buyer that has bought as much as one million tonnes in the past.

China and Saudi Arabia account for about half of the world’s annual barley imports, so being active in at least one of those markets is helpful.

Burnett said he is going to keep a watchful eye on the EU, where it has been dry. Conditions have been particularly difficult in the United Kingdom and parts of France.

June weather will go a long way toward dictating what type of malt barley crop the EU produces. If it is hot, there could be trouble.

The IGC expects Canada to export two million tonnes of barley in 2020-21.

Canada shipped 2.18 million tonnes of the product in calendar year 2019, 70 percent of which went to China. Japan and the U.S. were the only other two markets of significance.

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