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Barley area to rise, as exporters' stocks tumble

World barley area is to increase, reflecting a quest to rebuild inventories which are, among major exporting countries, on course for a 17-year low.

The International Grains Council, in a round of forecasts for crop plantings in 2013-14, pegged barley area at 53.1m hectares, a rise of 700,000 hectares year on year.

The estimate reflected in part the mixed impact of a better winter in the northern hemisphere, where "no major winterkill has been reported so far", the IGC said.

While in the European Union the lack of frost damage has limited the land up for reseeding with spring barley for reasons of winter cold, in the Ukraine, it has at least constrained losses in winter barley, which accounts for about one-third of plantings.

"After a shortfall of the previous season, the barley area in Ukraine is projected to rebound to about 4.0m hectares," the IGC said.

'Good returns'

In the European Union itself - the world's top barley producer, well ahead of the former Soviet Union, and Canada - sowings will be kept steady at about 12.4m hectares by the wet which prevented autumn crop plantings in much of the UK and parts of France and Scandinavia.

The IGC foresaw "a projected increase in spring barley plantings to replace lost flood-damaged wheat fields, mostly in the UK - compensating for a slightly lower area of winter varieties".

UK farmers are seen by many analysts as on course to sow their biggest spring barley area since at least the 1990s.

Meanwhile, in Canada, farmers, "encouraged by good returns, are also expected to increase barley plantings", by some 200,000 hectares to 3.2m hectares, "with the harvested area recovering to average levels of around 3.0m hectares", the IGC said.

The IGC estimate is in line with a forecast from Canada's farm ministry, AAFC, of sowings of 3.15m hectares, and harvested area of 2.85m hectares.

AAFC sees domestic barley prices averaging Can$220-250 a tonne in 2013-14, compared with Can$220-250 a tonne in the current season.

Inventories dwindle

Farmers' slightly more favourable view of barley comes amid prospects of a sharp decrease in prices of some other spring crops, notably corn, which the US Department of Agriculture sees averaging $4.80 a bushel in the domestic market in 2013-14, down 33% year on year.

World barley stocks will end 2012-13 at a five-year low of 23.6m tonnes, with the drop in inventories in major exporting countries particularly severe, of 14% to 12.5m tonnes, the lowest in 17 years.

"Much of the decline is in the EU, where a big export programme is set to more than offset higher production, leading to particularly tight stocks at 6.5m tonnes," the council said.

The level of inventories in exporting countries tends to have a disproportionate effect on prices, given that these are the supplies available to the international trade, so have a large impact on determining the degree of competition in the market.

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