China Drives World Barley Trade

China's barley imports are boosted to a record 6.0 million tons this month, propelling world trade to the second highest level after last year's record. China is traditionally the world's largest malting barley importer; however, starting last year, imports of barley for feed use surged. This comes as China's appetite for imported coarse grains has grown more than 25 percent year to year, to nearly 16 million tons. China also remains an important market for distillers dried grains with solubles.

At the same time, Saudi Arabia, the largest barley importer at 6.5 million tons, has made changes to its subsidy policy in order to diversify its feedstuffs imports and to lessen its reliance on barley. As a result, this month barley imports are lowered (500,000 tons) and corn boosted (600,000 tons).

The EU, with its barley exports forecast the highest in 15 years, stands to gain the most this year from China's growing demand. This comes after 2 years of good EU crops and as barley and other feed grain prices have fallen following 2 consecutive years of record world corn production.

OVERVIEW

World corn production is lowered as South Africa's crop is cut because of dryness and heat, more than offsetting improved prospects in Argentina. Trade is boosted slightly on stronger demand, primarily from Saudi Arabia as it substitutes corn for barley. Argentine and U.S. corn exports are raised and South Africa's are halved. The U.S. season-average farm price for corn is raised slightly.

PRICES

Since the release of the February WASDE report, U.S. corn quotes declined only slightly to $178/ton. Argentine quotes have dropped nearly $10 to $171/ton on improved new-crop prospects. Black Sea quotes fell slightly and remain about $10/ton below U.S. prices. Brazilian quotes were not available as shipments are expected to drop off seasonally with the start of soybean exports.

TRADE CHANGES IN 2014/15

Selected Exporters

  • U.S. corn is boosted 1.0 million tons to 45.5 million on recent strong sales and shipments and a longer-than-expected window of competitiveness compared with Brazil and Argentina.
  • Argentine corn is raised 1.0 million tons to 14.5 million on a larger crop.
  • South African corn is halved to 1.0 million tons because of a sharply lower crop and carryin. (Consumption is revised upward from 2005/06-2009/10 resulting in lower stock levels for subsequent years).
  • Australian barley is boosted 500,000 tons to 5.0 million on larger supplies and stronger demand from China.
  • EU barley is up 800,000 tons to 7.5 million, the highest level in 15 years, on a robust license pace and stronger demand from China.

Selected Importers

  • Israeli corn is raised 200,000 tons to 1.7 million as competitively priced corn is expected to replace wheat in feed rations.
  • Saudi corn is boosted 600,000 tons to 3.5 million on higher compound feed production bolstered by strong demand from the poultry sector. Barley is cut 500,000 tons to 6.5 million on abundant supplies and on policies that promote imports of alternative feedstuffs.
  • Chinese barley is up sharply by 1.5 million tons to a record 6.0 million on strong demand for feedstuffs.
  • Iranian barley is raised 300,000 tons to 1.5 million as indicated by trade data.