E-Malt.com News article: 4301

Australia: ABB Grain Ltd, announced on February 25 its opening export barley gross pool indicators for South Australia for the 2005/06 season, set at $180-190/t for malting 1 barley and $140-$150/t for feed 1 barley. ABB managing director, Michael Iwaniw said while these price levels would not be welcomed by growers the key factor in establishing the price was the build up in international stocks which was primarily expected from increased production in Europe.

“On top of this are sea freight rates that have now been at appallingly high levels for several years. To an importer, the combined effect of grain price plus freight rate makes feed barley look very expensive compared to other feed grain.”

Mr Iwaniw said Eastern Bloc countries such as Ukraine and Russia had emerged as regular exporters, but were prepared to accept low prices to gain quick sales in hard currency.

“The resumption of export subsidies from the European Union adds a random element that as we have seen before can have a sudden and huge effect, depending on the policy approach taken.”

The returns to Australian grain growers were also being affected by the higher Australian dollar in relation to the US dollar with exchange rates in the region of US75-80c having a direct deleterious impact on the prices offered growers.

Mr Iwaniw said domestic factors such as the deregulation of exports from New South Wales would be likely to have a downward impact on prices, as there would simply be more sellers of Australian barley.

“The GLA in Western Australia adds an element with little relation to supply and demand, so it’s hard to predict,” he said.

The price forecast is based on the assumption of an average season, which means no particular domestic price effects due to shortages or quality issues.

“I fervently hope that this forecast turns out to be wrong and that factors change to push these prices up, however they are our honest assessment of the market prospects at this time,” Mr Iwaniw said. “The final prices for this grain won’t be known for over two years from now, so it is still very early and much can change in the volatile barley market,” he said.


26 February, 2005