Ukraine: The Ukrainian barley market managed to stabilize in August-September

The Ukrainian barley market managed to stabilize in August-September. According to UkrAgroConsult�s evaluations, Ukraine's barley exports amounted to 800 KMT in July-September, which is almost equal to barley exports in the corresponding period last season.
About 270KMT of feed barley has been shipped through Ukrainian ports since early September. Out of this volume, over 100KMT was delivered to Iran, over 70KMT to Saudi Arabia

Nevertheless, the positive price situation on the market at the start of the season has also led to increased barley shipments from Russia, the Ukraine's competitor in the first half of the season.

Analysts believe that the Ukrainian barley market will depend on a set of factors:

- The position of Brussels regarding barley export subsidies. After a long break, the European Commission set the subsidy at the level of EUR 4.89/MT for 61.5 KMT of barley (since the season's beginning - 211.5 KMT).

- The large barley stock in Canada will contribute to its high supply, as the new harvest's grain starts coming in. The official estimate of barley stock is about 3.5 MMT, which exceeds last year�s carryover stock by 66%. Feed barley exports may reach 0.8 MMT. However, the activity of export sales will largely depend on the decision in respect of restrictions on corn imports from the USA for meeting domestic demand for feed grains.

- Barley surplus remains high after exports from Russia. According to UkrAgroConsult�s forecast, Russia's export potential will total 1.2 MMT in the 2005/2006 season. In July-August, Russia shipped over 460 KMT of barley, which was close to the physical exports reported in the 2003/2004 season (3.1 MMT of barley was exported in the 2003/2004 marketing year).

The analysts forecast a stable Ukrainian barley market with a price range of USD 122/MT to USD 128/MT FOB in September-December 2005.