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Up to 40% of Ukrainian barley exports will head to China

11 Jul, 2024
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Up to 40% of Ukrainian barley exports will head to China

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Ukrainian farmers have contracted 120,000 tons of barley for export to China in July. It is expected that 30-40% of Ukraine's total grain exports will be directed to this country.

Analysts from the cooperative PUSK, formed within the framework of VAR, provided this information.

"On the global barley market, there is demand from the EU, but Ukraine faces strong competition from Romanian grain. When buyers like Cyprus and Italy enter the market, they primarily import French and Romanian barley. Forecasts indicate that barley production in the EU this year will increase by 11 million tons. The main buyers of barley in the global market are China and Saudi Arabia, which purchase 50-60% of the total volume," explain the analysts.

July is expected to be a weak month for exports, and prices may not rise due to increased supply from the harvesting campaign. Currently, only about 20% of Ukraine's harvest has been collected, and supply will increase as the season progresses. Over 1.5 million tons of barley have been threshed so far, with a forecasted harvest of 5-6 million tons.

 

 

"Current indicative prices in Ukrainian seaports are $154-157 per ton, while 'Chinese quality' barley, certified for sale in China, is priced at $162 per ton. Seasonal models show a tendency for price declines. There is a risk of prices falling to $140-150 per ton under the pressure of harvesting, but there is a possibility of returning to $165 per ton in Odessa ports by autumn," the analysts believe.

There is also a risk of losing the premium for barley certification for trade with China.

"Chinese quality" barley trades with a premium of $5-7 per ton. Contracts for Ukrainian barley are already in place for July-August, but there are currently no further contracts. The question remains open as to whether Chinese buyers will return in autumn.

"If China does not enter the market with demand for barley in early August, the premium may disappear for those who have certified their products for the Chinese market," conclude the analysts.

The Odessa Journal

The Odessa Journal

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