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Unpredictable barley market in UkrAgroConsult forecast

13 August 20242 min reading

Barley crop decreased impressively in 2024 in all countries of the Black Sea and Danube region. According to grain market analyst Elizaveta Malyshko, UkrAgroConsult, the decrease is explained by weather factor. Weather was unfriendly for winter barley last fall, and sure drought like conditions in summer 2024 only aggravated the prospects of the 2024 harvest in the Black Sea and Danube region. 

Elizaveta Malyshko

The first surprise in the barley market is that despite the lower yields compared to 2023, the crop is higher than the 5-year average. The next disclosure – total regional production decreased impressively due to sharp drop in barley areas all across the regions.  

But a key contradiction is between totally decreasing supply and stable high demand for barley.  Barley price in Odesa ports increased by USD 7 to USD 170-173 per ton in early August, the prices went up also in Romania. Farmers realized this trend and are holding off on sales, supporting this way the prices. Another bearish factor mentioned by Elizaveta Malyshko is growing demand from China: about half of the July barley exports was shipped to China. July exports are almost twice as high as in July 2023. 

An important feature of the 2024/24 season is that the above trends are unfolding in almost every country of the region - from Ukraine and Russia to Romania and Bulgaria. This is explained by the low barley margins in the last 2023/24 season, when farmers made a common decision to expand areas under highly profitable crops - sunflower, rapeseed, soybeans, corn - at the expense of reducing barley plantings. A similar scenario, as Elizaveta Malyshko notes, was 4 years ago. 

However, in 2024, the margins of some crops are decreasing due to the growth of their production, while the margins of barley are increasing. If the price of barley increases faster than other commodities, the scenario of barley acreage expansion in the fall of 2024 and spring of 2025 is quite likely. The barley crop is likely to grow again in all countries of the Black Sea and Danube region in 2025, with a corresponding increase in supply and possible downward price correction in the 2025/26 season. Which crop will be definitely profitable in 2025/26 season, what will be the decisions of farmers? UkrAgroConsult continues to monitor the grain and oilseed markets in the Black Sea and Danube regions.

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