Risk of record stockpiles and a halving of sowing areas: analysts have reported a crisis in the barley market

The Ukrainian agricultural sector is experiencing a significant imbalance between production volumes and the actual rate of grain shipments to foreign markets, according to the All-Ukrainian Agrarian Council.

According to analysts at the ‘PUSK’ cooperative, just over 13,000 tonnes of barley were exported during the first nine days of November, although monthly figures of 300,000–350,000 tonnes are required to meet the planned sales target for the harvest. As of early November, total stocks of the crop in the country were estimated at nearly 6 million tonnes (of which around 50–60 per cent is required for domestic consumption). If the current trend continues, carry-over stocks at the end of the season will amount to between 2 and 3 million tonnes, which will exert downward pressure on prices in the market next year as well.

The difficult economic situation is forcing farmers to change the structure of their cropland. The total area under winter barley is expected to be just over 500,000 hectares, which is below the all-time low recorded in 2022 (600,000 hectares). The reduction is particularly noticeable in the Odesa region, where almost half as much land has been allocated to this crop, with the remainder being reallocated to rapeseed or left fallow.

According to analysts at the ‘PUSK’ cooperative, the price situation remains relatively stable, though there are no signs of an upturn. In the Danube ports, barley is being purchased at around 7,000 UAH/t, whilst on the domestic market the price ranges from 5,000 to 6,000 UAH/t. PUSK experts note that barley currently remains one of the least profitable crops, so they recommend that producers sell their existing stocks at prices that at least cover their costs.

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