Initial Price Surge for Feed Barley

The 2024/25 season began with high starting prices for all agricultural crops in Ukraine. Feed barley prices in Black Sea ports increased by 5-8%, reaching $168-172 per ton or UAH 8,100 per ton, which is 12-15% higher than last year. However, over the past week, exporters reduced prices by 50-150 hryvnias per ton to 7,900-7,950 hryvnias per ton. Some exporters even halted purchases due to a lack of export demand for the coming month, despite the pace of barley exports being three times higher than last year.

Barley Export and Harvest Data

• As of August 7, Ukraine exported 661,000 tons of barley, significantly up from 203,000 tons at the same time last year.
• By August 2, Ukraine had harvested 4.82 million tons of barley from 1.294 million hectares, with an average yield of 3.72 tons per hectare.
• In the 2023/24 season, Ukraine harvested 5.8 million tons of barley, exporting 2.5 million tons.

Changes in Sowing Areas

This season saw a decrease in the sown area for winter barley from 536,000 to 470,000 hectares and a slight reduction in spring barley sowing from 810,000 to 783,000 hectares. This shift was due to high demand for malting barley in 2023, which influenced planting decisions.

EU's Increased Barley Production

The increase in barley sowing and harvesting in the EU for the 2024/25 marketing year has sharply reduced the demand for Ukrainian malting barley. Malt factories in the EU have already accumulated enough raw materials to last until the end of the season.

Brewing Barley Prices and Market Dynamics

• At the start of the season, purchase prices for brewing barley in Ukraine were UAH 7,000 per ton with delivery to the factory.
• These prices rose to UAH 7,400-7,800 per ton over the month.
• However, the premium for brewing quality barley has diminished to UAH 100-300 per ton, compared to 2,500-3,000 UAH per ton last year.
• Consequently, some farmers are selling malting barley as feed barley, not expecting a significant price rise soon.

Global Barley Market Outlook

The reduction in barley harvest in the Russian Federation will be offset by increased production in the EU. Therefore, an increase in export prices is not expected. This is compounded by the increased supply of fodder wheat in the EU, due to rains in Germany and France, and corn from South America, along with a forecasted record corn harvest in the USA.

Competitive Market Pressures

Ukrainian farmers are holding back barley sales in hopes of better prices. However, competition with Russian and Romanian barley is expected to intensify in the global market. As a result, Ukrainian exporters may need to lower prices to boost sales and remain competitive.

The 2024/25 barley season in Ukraine is characterized by high initial prices and increased export volumes. However, market dynamics, including competition from other countries and increased production in the EU, are exerting downward pressure on prices. Ukrainian farmers and exporters must navigate these challenges carefully, balancing the timing of sales with market conditions to optimize returns.