News
24.02.2010
German barley farmers rush for intervention buying
German farmers are, thanks to weak export hopes, on track to sell considerably more barley for intervention buying than the whole of the European Union submitted of the grain last season.
Grain traders believe that the 1.08m tonne-figure that German growers have submitted so far could swell to 1.5m tonnes by the time the programme ends in the summer, a US Department of Agriculture briefing said.
That would be nearly as much as the EU's whole grain buying programme in 2008-09, of which barley accounted for roughly 920,000 tonnes, including offers as yet open at the end of the season, according to Brussels data.
Barley vs rye
The increase reflects in part a dearth of export opportunities, after strong harvests in importing countries in North Africa and the Middle East, with rising competition from former Soviet states and Australia for what trade there is.
"Due to intensive competition from Black Sea countries, Germany barley has not found customers in traditional export markets," Dietmar Achilles, a USDA attachй in Berlin, said.
However, demand for barley has also suffered from substitution by rye and triticale, which are priced well below the E103.15 a tonne that barley sells for at intervention.
The "significant" price gap had prompted German feed companies to raise the use of rye and triticale, which are also finding favour with bioethanol companies and operators of biogas digesters, which convert plant material or dung into methane which is in turn burnt to make electricity.
"Several hundred thousand tonnes are diverted to this new use with increasing tendency," Mr Achilles said, noting that the demand could prompt a narrowing of rye and triticale prices with those of other grains "later in the season".
Sowings to fall
Meanwhile, farmers are proving increasingly willing to get shot of barley while intervention lasts, with little prospect of the market bringing higher prices.
"At the end of 2008-09, German farmers were still speculating for higher prices and were holding relatively large amounts of barley," Mr Achilles said.
He forecast that German barley plantings would fall by about 5% in 2009-10, echoing estimates by other analysts of substitution of the grain by barley Europe-wide.
The report follows an estimate from the Canadian Wheat Board on Monday that global barley production would fall by 6m tonnes to 138m tonnes in 2010-11.
Agrimoney
