SAUDI Arabia Grains Organization (SAGO) overnight bought 900,000 tonnes of feed barley for August-October arrival for an average price of US$193.64/t cost and freight (c&f), similar to the average price paid in its previous tender, and more than $30/t below the price at which SAGO booked barley for delivery in the equivalent period in 2018.
The drop in values is believed to be a function of limited demand from China, and a European crop which is on track for average or better yields in most regions, a far cry from last year when dry to drought conditions impacted production.
The pace of purchases this year is 3.49 million tonnes (Mt) over 1 January to 31 October, and reflects imports at the rate of about six cargoes per month, or roughly two fewer cargoes per month than in the corresponding 2018 period.
Saudi’s drop in demand came about early this year because winter rains boosted its fodder growth.
The market is now trying to determine whether Saudi Arabia will increase its pace of barley buying later in the year.
Eastern Australian feedlots sourcing grain out of the ports of Brisbane and Newcastle are continuing to buy barley at or just above export parity.
They are sourcing it by ship, mostly from Western Australia, through the trade, which is offering barley free-on-truck ex Brisbane at A$400/t.
This latest SAGO tender has called for 12 cargoes to be shipped to Red Sea ports at an average price of US$191.42/t c&f, and three to Persian Gulf ports at an average price of $202.53/t c&f.
The terms allow suppliers to fill the order with barley from Australia, Black Sea origins, EU, North and South America, but exclude Canadian barley.
Previous SAGO business was booked at $193.03/t for 840,000t for July/August delivery.