Aus malt barley exports jump in Jan; feed, sorghum drop
AUSTRALIA exported 73,647 tonnes of malting barley, 549,451t of feed barley and 25,517t of sorghum in January, according to the latest export data from the Australian Bureau of Statistics (ABS).
While the malting figure is almost four times the 18,559t shipped in December, the feed barley and sorghum shipments were down 41 per cent from 938,295t and 62pc from 73,781t respectively shipped in December.
Vietnam was the biggest destination for January-shipped malting at 33,381t, and was followed closely by Mexico on 33,000t.
On feed barley, Saudi Arabia on 229,105t and Jordan on 126,000t were the biggest destinations by far, with the UAE on 57,829t in third place.
China on 23,330t accounted for 91pc of Australian sorghum exported in January.
Flexi Grain pool manager Sam Roache said January’s barley exports were around 330,000t lower than the December total, and well below last year’s January-to-May average export pace.
“On the feed side, Middle East was unchanged month on month, while Asian demand dropped like a stone, down 350,000t to almost nothing.
“This switch was in line with our expectations…and was driven by importers favouring the freshly minted and relatively cheap Australian feed wheat production ex New South Wales and South Australia.”
Mr Roache said this trend was likely to continue, with strong Middle Eastern demand holding up the Australian numbers and limited participation from Asian consumers, who have been heavily into Aussie feed wheat since January.
Russia’s invasion of Ukraine has prompted a leap in barley as well as wheat prices.
“We have seen the global barley market rally hard and fast, but perhaps without the visibility of the wheat, where futures are all over the news.
“Barley supply is not as skewed to Russian and Ukraine exports as wheat, but they are still the third and fourth-largest exporters and account for around 30pc of the major barley exporters’ activity.”
Ukraine and Russian barley is the cornerstone of Middle East and Mediterranean consumption, and Mr Roache said Ukraine has been a key price setter for imports to China since it closed to Australian barley.
“Relaxing of tensions and the reestablishment of shipping of Russia and Ukraine is the only solve for this issue, and the longer the interruption, the higher the price can go.”
In the last 12 days the global market has rallied around AUD 80/mt plus and pleasingly we are seeing a good portion of that reflected in the local bids, especially in SA and Vic markets. Elevation margins remain really strong, especially in WA and NSW which we estimate at close to $100/mt. Vic and SA elevation margins are sub $50/mt today.
Rumours continue that China will soon be back to buy Australian barley.
“These are so far unfounded, but the change in the supply landscape is so extreme that we do not rule anything out today.”
Malt exports rebounded in January, and Mr Roache said shipment levels should continue to be strong throughout the first half of 2022.
“Despite an early squeeze on price, the post-harvest realisation by the trade that there was enough malt to go round both locally and for export saw an increased appetite to sell cargo.
“Demand is there, and we should see the South and Central Americans continue to draw our stocks out with good prices and margins for the traders.”
Declining sorghum shipments reflect the run-out of old-crop stocks.
“China’s still buying it all, and will continue to do so unless we see a political-style punishment on sorghum too, which is hard to predict today.”
Mr Roache said shipment pace was expected to re-establish strongly and consistently as new-crop comes on line, with favourable margins available for sorghum shipped out of both NSW and Queensland.
“The size and spread of the crop over NSW this season should allow larger exports than we have seen in recent years.
“Availability of ample feed wheat and barley for local use should also encourage sorghum exports.”
Mr Roache said sorghum has seen little direct support from the Russia-Ukraine situation, with neither being a large producer or exporter.
“Indirectly, the interruption to Chinese corn and barley supply ex Ukraine should ensure continued robust demand into our number-one home.”
Table 1: Australian malting barley exports for November and December 2021 and January 2022. Source: ABS
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Table 2: Australian feed barley exports for November and December 2021 and January 2022. Source: ABS
Table 3: Australian sorghum exports for November and December 2021 and January 2022. Source: ABS