Market Morsel: The wind that shakes the barley
The barley market has been a tale of two sides in the past few weeks. The eastern states have experienced some price growth. However, the west coast has come under pressure and continues to languish below A$300/mt.
Today I wrote about wheat basis (see here), but what about barley? How does our value stack up against some of our competitors?
The second chart below shows the monthly price of feed barley in France (Rouen) and Australia (Kwinana). Western Australian prices remained at a premium for most of the past decade but have moved to a discount.
The timing of this move to discount is important, as it occurred at the time of the China anti-dumping tariff and has remained low. A part of this will be due to our large production, but China plays a part in this discount.
The third chart below shows the annual premium/discount to France and Australia (east and west). We would expect that local grain production and the lack of China will continue to see barley trading at a discount to overseas values.