Ukrainian Barley Prices Rise Due to Increased Demand from China
As of mid-August, Ukraine has exported 113 thousand tons of barley, and the shipping pace continues to grow. The majority of the exports—up to 95%—is directed to China, which significantly impacts pricing and market participants’ strategies.
This is reported by AgroReview
Price Increase in Barley: Main Reasons
According to analysts from the agricultural cooperative PUSK, the acceleration of purchases by China has become the key driver of rising prices for Ukrainian barley. Barley that meets Chinese quality standards is currently selling for around $216–218 per ton. Ordinary barley is being purchased at $210–212, mainly in small batches of 300–500 tons. For larger lots of over a thousand tons, an additional premium can be obtained. Contracts with China need to be fulfilled by August 15–20, and the supply remains limited, creating potential for prices to rise to $220 per ton, provided the product quality is high.
“Purchases of barley have become more active, and we are seeing price increases. Chinese quality is already trading in the range of $216–218 per ton. Ordinary barley is being bought at $210–212, but this is mostly in small batches—300–500 tons. For lots of over a thousand tons, an additional premium can be obtained. Deliveries to China must be fulfilled by August 15–20, and while offers are insufficient, the market has the potential to reach $220 per ton with appropriate quality,” PUSK reports.
Future Prospects and Impact of Stocks
Analysts note that after the completion of active shipments to China, the market may face a slowdown in trading. The lack of new contracts, as well as the uncompetitiveness of Ukrainian barley in other directions—such as to Israel, Cyprus, or EU countries—could lead to a price correction in the second half of August and September. It is expected that prices may decrease to $205–209 per ton.
“After the shipments to China are completed, there may be a vacuum in the market since there are almost no new contracts. The premium for Chinese quality will disappear, and at current prices, barley is uncompetitive for other markets—Israel, Cyprus, or the EU. The second half of August and part of September may see a correction: the seasonal model indicates a possible decrease to $205–209 per ton,” analysts believe.
Another significant factor is the low level of barley stocks in Ukraine at the beginning of the season—2 million tons less than last year. This could lead to a rapid depletion of supply. In such a situation, competition among exporters and processors may support prices at a high level. Experts advise those who are unable to sell their products now to consider the possibility of selling in January–February, when demand may rise again.