Domestic Scenario
Indian barley production during the year 2012-13 is estimated at around 1.74 million MT, marginally higher compared to 1.62 million MT during the preceding year, owing to good rains in kharif season improving the crop yield. Since last three years, production has been increasing owing to good yields across production tracks, supported by good monsoon rains and increase in the Minimum Support Price. Over 91.71 per cent of the total production for the country was contributed by 4 states. The top barley producing states of the country are Rajasthan (48.75 per cent), Uttar Pradesh (24.96 per cent), Haryana (9.45 per cent) and Madhya Pradesh (8.54 per cent). The domestic consumption is estimated at 1.5 to 1.75 million MT. India holds 14th position in the major barley consumer’s list, with the leaders being European Union (37.91 per cent) and China (9.57 per cent).
International Scenario
The International Grain Council revised upward its global 2013-14 barley production forecast to 142.3 (previous figure 142.0; 2012-13 129.5) million MT, and that for the EU-28 to 59.1 (58.4; 54.5) million MT and for Canada to 9.0 (8.8; 8.0) million MT, while in Ukraine output is seen lower at 7.4 (7.7; 6.9) million MT and in Argentina at 4.8 (5.0; 5.2) million MT. Production is seen unchanged in Russia at 16.5 (16.5; 13.9) million MT and in Australia at 7.5 (7.5; 6.8) million MT. Global use is forecast at 138.4 (138.1; 132.8) million MT, including 91.9 (91.7; 87.5) million MT for feed, 6.6 (6.6; 6.6) million MT for food and 30.0 (29.7; 29.2) million MT for industrial use. Global trade is projected to reach 18.8 (18.7; 19.5) million MT and ending stocks are seen to be at 26.5 (26.3; 22.5) million MT.
Price Trend Analysis
The barley spot market price variation study indicates that the prices have been on the rise since January 2006 owing to reports of higher export demand. In the current year World barley stocks are likely to end 2012-13 at a five-year low of 22.5 million MT, with the drop in inventories in major exporting countries being particularly severe, of 14% to 12.5m tonnes, the lowest in 17 years. Moreover, Chinese imports of barley, which are essentially all for use by maltsters rather than as livestock, feed, nearly halved to 566,000 tonnes in the first four months of 2013. Owing to increased participation of India in the global export market over the years and declining demand, the prices are consolidating at lower levels.
As per the study, the prices have been weakening since the peak in April 2012. Prices had shown marginal recovery after September 2012 for the quarter ending December and since then the prices have maintained a lower trajectory in the domestic market. The key factor in the global market supporting the prices would be the demand from China and Saudi Arabia. Saudi Arabia, the world’s foremost barley-importing country, accounts for over 40 percent of world barley trade through the coming decade. Saudi Arabia’s barley imports are used primarily as feed for sheep, goats, and camels. Australia’s barley exports are projected to rise slowly, and the country is expected to maintain its role as the world’s third-largest exporter. The spot prices in barley are expected to improve due to support from the increased export demand.
Production Estimates & Price Forecast
Barley being a Rabi crop, sown during October to December is highly dependent on good monsoon. This year, good rainfall received during the current monsoon season in major producing regions will certainly provide the required soil moisture during the sowing period. The upcoming season is likely to see production of around 1.7 to 1.8 million MT. Barley is all set to gain momentum in the coming days owing to expected production shortfall in the global market. India markets can expect a prices of over INR 1800 / quintal from current levels of about INR 1400 / qunital.
