Spain's drought-hit barley crop may on course for a 40% plunge, analysts have warned, even as hopes are rising for output from other European countries, thanks to higher-than-anticipated spring sowings.
Market forecasts for Spain's barley harvest, which at some 8.3m tonnes last year accounted for 20% of total European Union output of the grain, have fallen below 5m tonnes for 2012, RMI Analytics said.
"The situation in Spain has continued to deteriorate," the malting barley consultancy said.
"There has been some rain recently, but much more will be needed to improve or even stabilise the situation."
Spain's barley harvest is a particularly sensitive market topic given the country's reliance on imports of the grain, and wheat, for animal feed.
Indeed, Spain's imports of barley for 2012-13 have been pegged at 1.6m-1.8m tonnes – which would be equivalent to about 10% of world trade.
'Severe rain shortage'
On Monday, European Commission officials highlighted the extent of the drought which has effected much of western Europe, but the Iberian peninsula, and parts of North Africa, particularly.
"A severe rain shortage has been observed since December in Spain, Portugal and Morocco, the driest period in our climatological record for southern Spain," the commission said, in comments which contrast with improved hopes for winter crops in the US.
"The cumulated average precipitation deficit since October 1 [has reached] 300mm for Portugal and 155mm for Spain," levels approaching those of "the most extreme years".
However, the commission was more downbeat over prospects for Spanish durum than barley, forecasting that the country's average yield of the pasta wheat at 1.69 tonnes per hectare, a drop of 30%.
"Due to the drought in the main durum wheat producing regions in Spain… full yield potential can no longer be reached even if the remaining weeks of the growing season are beneficial."
The soft wheat yield was pegged at 3.3 tonnes per hectare, a 10.5% decline year on year.
Impact on seed sales
RMI's comments came as it revised its earlier forecast for European Union sowings of spring barley, a big source of malting barley, by 300,000 hectares to 7.7m hectares.
The upgrade, which put a 12% year on year increase in sowings on the cards, reflected uprated ideas of the extent of damage to winter crops, largely in France, from winterkill, as revealed by analysts such as Strategie Grains and Offre Demande Agricole – so creating more area for spring reseedings.
France, where spring barley sowings had appeared set for a small decline, now looked on course for a 30% increase to 640,000 hectares.
"It has become obvious that the spring barley acreage in Europe will be extended far beyond the original expectations made at the beginning of the year," the Swiss-based group said.
Demand from growers is such that seed sellers are reporting sales of "malting barley varieties which are usually not very popular, or off the recommended lists".
'No reason to switch'
RMI also echoed expectations voiced by US Department of Agriculture attaches of a large rise in Argentine sowings, saying plantings "could easily" rise to 1.4m-1.5m hectares for 2012-13, implying a crop of about 5.0m tonnes.
However, it downplayed risks to Canadian sowings of malting varieties, highlighted by the Canadian Wheat Board last week, which warned over the impact of falling premiums over feed barley.
"Although there is generally some pressure on barley acreage in Canada due to strong wheat and canola prices, we expect the barley area to increase by about 15% and malting varieties to be not at risk," RMI said.
"Farmers feel that they will be able to grow and sell malting varieties so there is no reason to switch to feed varieties."