AUSTRALIA exported 571,826 tonnes of barley and 222,410t of sorghum in July, according to the latest export data from the Australian Bureau of Statistics (ABS).
The barley figure comprises 43,289t of malting, up 21 per cent from 35,680t shipped in June, while feed at 528,537t surged 42pc from 371,291t exported in June.
Mexico was the only destination to take a cargo of malting barley in July, while on feed, Japan, followed by the United Arab Emirates and Kuwait were the three biggest customers, with Saudi Arabia and The Philippines also taking panamax cargoes.
July sorghum exports at 222,410t were up 31pc from 169,986t shipped in June, with China on 215,889t buying 97pc of July shipment.
Flexi Grain pool manager Sam Roache said July’s malting barley exports were supported by a return in Mexican demand.
“We have seen South and Central American demand right out into the new-crop year already, so we expect this business to continue to increase with the small and poor-quality Canadian harvest,” Mr Roache said.
“Given the higher base price for feed and assuming a normal quality profile, it will still be hard to see the grower malt spread maintain a long-term rally over $10-15/t plus without a Chinese re-entry.”
Despite feed barley shipments being sharply higher in July than in June, they underperformed on expected volume to Saudi Arabia.
“Considering this, we suggest that August could be a surprisingly big month to Saudi, as there was certainly some demand set out of Australia for the July-August period.
“In Asia, Philippines demand was large, with a potentially record 55,000t month, a great signal of continued Asian demand growth.
“Thailand was uncharacteristically small this month, but we are going through a shipment period where the market switched into cheap Black Sea feed wheat in the pressure before Ukraine and Russian harvest.
“The wheat market quickly recovered higher, sending demand back to barley from wheat-switching countries like Thailand, The Philipinnes and Vietnam, so we expect demand to re-emerge, if there is enough barley left.”
Mr Roache said the market had consistently seen barley shipments exceed expectations.
“We expect August to be larger than July, which is leading barley to a very tight carry-out across all zones.
“We expect to be running on fumes by the time the headers are in paddocks, especially in the southern states.”
Mr Roache said barley had a very different supply-and-demand scenario to wheat.
“It does not have the burdensome carryout in New South Wales, and therefore could trade very differently into 2022 than the broad expectation, especially in the event of a weather issue on the east coast over the next 12 months.”
New-crop feed barley business is said to be slow.
“Buyers are hanging back for Australian selling pressure, and Australian sellers are holding back for buyers to come into market.”
Mr Roache said Australia was clearly the cheapest origin in the world for generic barley for the November-December forward period.
“Aussie replacement is currently around $20-25/t below competing origins on a free-on-board basis.
“Australia enjoys a substantial freight advantage to around 30pc of its demand calculated on the last three months of shipment data.
“In general terms, we are even to slightly cheaper on freight costs versus Black Sea to the other 70pc of the demand we service, so we only need to be slightly cheaper in FOB terms to win the business.”
Sorghum appears well on track to reach 1 million tonnes expected in the current shipping year which started in autumn.
“We expect China to continue to take the vast majority of shipments until we run out, or there is political intervention.
“This situation with China should continue into the new-crop sorghum year and there is demand and scope to elevate more sorghum if we have the crop, especially in Central Queensland, where the supply chain has been under-utilised due to lower production of total crop.”
Table 1: Australian malting barley exports for May, June and July 2021. Source: ABS
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Table 2: Australian feed barley exports for May, June and July 2021. Source: ABS
Table 3: Australian sorghum exports for May, June and July 2021. Source: ABS