Australia Remained the World’s Largest Barley Exporter at the Lowest Prices in 2022
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Australian Barley Production Remains Above 10 Mmt for MY 2022/2023
Barley production is concentrated primarily in the Southwest and Southeast of Australia . In MY 2021/2022, Barley’s harvested area decreased by 50 kha YoY. Yet, Australia improved Barley yields by 0.17 mt/ha YoY, leading production to reach a record 14 Mmt in MY 2021/2022, 0.6 Mmt higher YoY. Australia’s domestic consumption has declined over the past three years, reaching 5 Mmt in MY 2021/2022, 0.5 Mmt lower YoY. Meanwhile, exports reached 10 Mmt in the same year (~71% of total production). In MY 2022/2023, the USDA estimates domestic consumption will decrease by 0.2 Mmt YoY. However, production will decline by 2.7 Mmt YoY due to a 0.47 mt/ha YoY decrease in Yields. Thus, will Australia maintain the same level of exports despite the production decrease?
Figure 1: Australia’s Barley Production, Domestic Consumption, and Area Harvested (MY 2019/2020 – 2022/2023)
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Australia Remained the World’s Largest Barley Exporter in Dec 2022
Australia was the world’s leading Barley exporter in MY 2021/2022, reaching 10 Mmt, 1 Mmt higher YoY. Argentina was the second world exporter, reaching 5.4 Mmt, 4,6 Mmt lower than Australian exports. Russia follows with 3 Mmt and Ukraine with 2.2 Mmt. In MY 2022/2023, Australian Barely production decline led exports to decrease by 0.2 Mmt YoY in Nov-Dec 2022. Yet, it remains 1.3 Mmt higher than Argentina’s during the same period. Russia increased Barley exports to 0.8 Mmt, 1 Mmt lower than Australia’s and ranked as the second exporter in Nov-Dec 2022. Despite decreasing production and exports, Australia remains the leading exporter of Barely in Nov-Dec 2022. But what are the major destinations for Australian Barley?
Figure 2: Australia Barley Exports MY 2019/2020 – Nov/Dec 2022/2023
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China Replaces Australian Barley With Canada’s
Australia’s leading Barley destination in MY 2021/2022 was Saudi Arabia, reaching 1.7 Mmt, followed by Japan with 1,4 Mmt and China with 1,1 Mmt. In MY 2022/2023, Saudi Arabia increased Australian Barley imports by 0.3 Mmt YoY in Nov-Dec. Meanwhile, China continues restricting Australian commodities and turning to other markets, leading Barley imports to decrease by 240 kmt YoY from Australia. In addition, China decreased imports by 183 kmt YoY from Argentina and increased imports by 238 kmt YoY from Canada. How did Barley prices occur between Australia, Canada and Argentina in MY 2021/2022?
Figure 3: Australia’s 10 Top Barley Destinations in MY 2021/2022
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Trade Restrictions on Australia: Canada Remains the Cheapest Origin for China’s Barley Imports
Australian Barely FOB prices were the lowest in MY 2021/2022. They peaked at USD 387.5 /mt in June 2022, USD 61 /mt lower than Argentina’s and USD 24 /mt lower than Canada’s on average. Argentina’s barley FOB prices were lower than Canada’s before Feb 2022, yet higher than Australia’s because of inflation. Since Feb 2022, Argentinian Barley prices rose to peak at USD 392 / mt in March, USD 41 / mt higher than Canadian prices and USD 92 / mt higher than Australian prices on average. The war in Ukraine contributed to Argentinian prices surging as gas and fertiliser prices surged. In Dec 2022, Australian Barley prices decreased to USD 211 /mt, with no difference YoY. Canadian prices were USD 26.7 / mt lower YoY, and USD 70 /mt higher than Australian prices. Meanwhile, Argentinian price remain USD 39 /mt higher YoY. Following the trade restrictions applied by China on Australian commodities, the country increased imports from Canada despite the higher prices, while they decreased from Argentina due to its surging prices.
Figure 4: Australia, Argentina, and Russia Barley FOB Prices Nov 2021 to Dec 2022
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In a Nutshell
Despite weather conditions affecting production, Australian Barley exports remain the highest globally, with Saudi Arabia as the top destination for the MY 2021/2022.
China was the third destination for Australian Barley in MY 2021/2022. However, China is continuing to restrict Australian commodities since 2020, and Australian Barley declined in November-December. Thus, China imported more from Canada despite its higher prices.
Argentina, meanwhile, is a significant Barley exporter. However, prices continue to rise due to inflation and the war in Ukraine, which has benefited Canada in increasing its shares in the Chinese market.
