Australia: 2006/07 barley crop outcome is questionable

The country goes through a bad drought along the East Coast and very dry conditions in the West as well. Planting has advanced well in South Australia and Victoria, but has only just started along the south coast of Western Australia and not at all in New South Wales and Queensland.

Feed barley markets in the East range from US $ 150.00 to 155.00 (FOB equivalent) for spot delivery and above 160.00 for new crop positions. Pastures are wiped out, while demand for beef and therefore for feeders is very large. Malting barley to China has traded down to US $ 175.00 CIF in bulk container, but is now quoted 180.00 in container and upto 185.00 in bulk vessel, equal to 150.00/155.00 FOB. That explains why malting barley starts to disappear in the feed sector.

Australia's barley surplus of crop 2005/06 consists mainly of malting barley and is considered not burdensome, even moreso in view of a questionable outcome of the next crop. Last year Australians planted late and harvested an excellent crop, but average results of past years of dry conditions and late planting were much less good. Most boards seem to doubt last year’s ABARE crop figure of 9.9 Million t, they see a maximum of 9.0 Million t. AWB forecasts a barley crop of 6.95 Million t for 2006/07.

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