Jordan Subsidizes Imported Barley at $50 per Ton
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Production of Barley is negligible in Jordan. Most Barley is used for animal grazing during its early growth stages. The Post forecasted Barley consumption would decrease in MY MY2022/23 to 720 TMT. The local (Awasi) sheep are known for their exquisite palatability in the GCC countries and attract premium prices. Consequently, Jordan depends on lower-priced imported sheep to meet its domestic needs, mainly imported from Australia, New Zealand, and Romania. Most of the Barley is used for sheep feed and, to a lesser extent, in dairy cattle and poultry rations. Barley use has dropped significantly after the GoJ adopted an animal tag system ten years ago. Each sheepherder receives subsidized Barley according to the actual number of tagged animals. The GoJ is subsidizing each MT of imported Barley at $50.
Post expects Barley stock increase in GOJ’s inventory as a government policy; beginning stocks are expected to stay at 545,000 MT and end at 950,000, nearly doubling. This is due to GoJ policies that aim to increase the inventory for food security reasons heightened by market volatility, especially price and freight costs fluctuations due to COVID-19 and the Black Sea war impacts on international markets. Barley’s inventory volume is within the GoJ’s policy of strategic stocks that require meeting 12 months of consumption needs inside Jordan and contracted for.
The Ministry of Agriculture (MoA) announced it would cut down an extra one million heads of sheep and goats registered to receive the subsidized Barley. MoA considered the 4.9 million head number an abuse of the subsidy system, and farmers must prove their actual herd headcount, according to records, and the animal tag system is less than 3.9. In return, MoA is committing itself to make it up to farmers by increasing the subsidized ration per head from 20 kg to 25 kg during the winter seasons, breeding season, and no grazing.
Only sheep and goats owners receive subsidized Barley at a discounted price. This program excludes cattle and poultry farmers from receiving subsidized Barley. MIT is the predominant Barley importer in Jordan. MIT solicits bids through traders that meet the stipulated standards. Once it purchases the Barley, MIT distributes and sells it at a subsidized price to herders based on the number of tagged animals recorded in the database.
Barley Trade in Jordan
In MY 2022/23, total Barley imports are expected at 1100 TMT. Barley suppliers are Black Sea basin countries, with Romania being the top supplier. According to the AgFlow data, Jordan imported 117,273 tons of Barley from Australia in Jan 2023.
The GoJ purchased Barley’s selling price is decided by a GoJ committee in response to current variables that include but are not limited to prevailing weather. The GoJ sets the selling price of the subsidized Barley, currently $247 per ton, and the non-subsidized Barley is $388 per ton. Any dairy farmer who does buy it at $388 per ton, the same price is paid if the sheep herder wants to buy more than his allocated ration.
Monthly, a Government committee from the Ministry of Agriculture (MoA), the Ministry of Industry and Trade (MIT), and other GoJ agencies convene to decide upon the subsidy as allocated by the GoJ approved budget, the current economic conditions, the prevailing weather, the season and any other consideration then set the Barley price to herders, usually MIT calculate the expenses of government services associated with transportation, storage and other logistics related to Barley delivery, then calculate the moving average of the cost including the purchase price, then discount the subsidy. The system allows for arbitrage when significant price swings occur, as traders can quickly take advantage and profit by offering a lower price than the Government’s set price.
Other sources: USDA
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