Barley: France Quotes the Same CFR Price to Tunisia and Mexico
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In France, yields from winter Barley variety trials increased compared to 2022, with an average yield of 102.4 q/ha (compared to 96.5 q/ha in 2022) as of August 2023. This yield is the highest over the last eight years. 2015 and 2022 are the other two years with more than 90 q/ha results. However, the calibration is disappointing; it is weaker than in 2022, with an average from the tests of 86.2% (89.2% in 2022). The protein content is higher, with an average of 10.8% (10.4% in 2022).
Based on this postulate and data as of August 1, 2023, Agreste estimates “winter Barley production at 9.4 Mt, with a yield up over one year (+ 6.5%), estimated at 69 .7 q/ha”. “Spring Barley production (2.7 Mt) would decrease for the fourth consecutive campaign. This drop is linked to surface areas, which fell by 19.0% over one year and 23.7% compared to the 2018-2022 average. The yield, estimated at 59.2 q/ha, increases compared to 2022 and the five-year average (+14.4% and +1.6% respectively).
The Champagne-Ardenne region, located in the northeast, is France’s leading producer of Barley. Picardie, Centre, Champagne-Ardenne, Haute-Normandie, and Nord-Pas-de-Calais account for a little over half of French production, with 51% of the harvest.
In its estimates for March, FranceAgriMer increased its forecast for French Barley exports to third countries for the 2022/23 campaign by 200,000 tons compared to February, to 3 Mt. This is explained by a strong dynamic towards China in the first three months of 2023, especially in feed Barley, explains Paul Le Bideau, deputy head of the Grain and sugar unit. He notes good competitiveness of French feed Barley towards Chinese ports, “below Canadian and Argentinian prices but above Black Sea and Australian prices.”
FranceAgriMer estimates all French Barley exports (to the EU and third countries) in 2022/23 at 6.03 Mt, down 3% compared to 2021/22. Malt exports would be 1.4 Mt, in line with previous campaigns. According to AgFlow data, France exported 3.1 million tons of Barley in Jan – Sep 2023. In June – Sep, Key markets were China (0.17 million tons), Morocco (67,000 tons), and Egypt (57,000 tons). The following markets were Mexico, Spain, Brazil, the Netherlands, Portugal, and Cameroon.
Domestic uses of Barley (production of livestock feed and malting) would reach 2.02 Mt, up 13% compared to 2021/22. As for Barley, production should exceed last year’s, at 11.9 Mt (+ 5%). With an anticipated final stock of 1.46 Mt (+ 35% compared to 2021/22), the stock/consumption ratio would be 15% in 2022/23, compared to 12% in 2021/22 and 8% in 2020/ 21.
During the 2021-2022 campaign, total Barley production in France amounted to 11.2 million tons. Of this total, over six million tons were destined for export. 1.7 tons of Barley went to self-consumption and farm stock. Nearly 1.66 million tons of Barley were processed into malt to produce whiskey or beer. 1.1 million tons were used for animal feed, and 0.55 million tons were used for other uses (seed, freight).
Malting Barley is grown in France, mainly in the Nord, the Champagne-Ardenne, Eastern France, Burgundy, and the Beauce and Gâtinais, Poitou, Berry and Charentes. The French malt industry has high-performance, efficient industrial facilities that enable it to be competitive in the world market. 80% of the malt produced in France is exported to more than 110 countries, to major international or regional brewers. The French malt industry has constantly optimized its production costs, including control over the energy needed for the process.
2023/2024 Season Forecast
Exports to third countries are expected to fall sharply to 2.5 Mt (-22% compared to 2022/23) due to lower expected Chinese purchases. Be careful, however, specifies Marc Zribi, Head of the Grains and Sugar unit of FranceAgriMer: it is currently complicated to know what Chinese policy will be regarding imports this campaign.
Exports of French Barley to the European Union would increase by 18%, to 3.7 Mt. A clear increase linked, as for wheat, to increased imports from Spain and Portugal. Spain would thus buy more than 1 Mt from us in 2023/24, compared to 230,000 tons on a five-year average. In addition to the impact of drought and the expected poor harvest in Spain, the United Kingdom would have less availability to supply Spain in 2023/24.
Between increasing production, stable domestic uses, and slightly decreasing total exports, French Barley stocks at the end of the campaign should increase by 30% compared to 2022/23, reaching 1.5 Mt.
Price Trends
Barley prices are falling sharply in the face of the competitiveness of corn and a lack of domestic demand. Barley prices have suffered a rapid contraction in recent days in France in the wake of wheat and corn prices. The arrival of new corn harvests and intense pressure on sales pull the entire forage sector into the red. At the same time, demand appears to be limited by growing uncertainties regarding outlets in the meat sector in the medium term.
Barley also suffers from a lack of competitiveness in rations on the domestic market, but on the other hand, is finding interest in Spain and the North of the EU. Chinese purchases have also been driving port activity since the end of September, despite the imminent arrival of new Australian harvests, which risk competing with French origin again for the Middle Kingdom.
France quoted Japan the highest CFR price, USD 321 on average, in Jan – Sep 2023. The country also offered higher CFR prices for Far Eastern countries (South Korea: USD 317 and Taiwan: USD 315). The following region was the Middle East (Saudi Arabia: USD 304 and Jordan: USD 299). Interestingly, France offered the same CFR price 290 to Tunisia and Mexico.
For selected countries, trends of CFR price showed precisely a similar situation for China, Morocco, and Saudi Arabia in Jan – Sep 2023. The price started falling since the last January. It dropped in June, and after that, it showed a stagnant trend.
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