AUSTRALIA: AWB 2010/11 barley pools softer in flat market

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Estimated pool returns (EPRs) for AWB’s 2010/11 season barley pools have declined between zero and seven dollars a tonne for most grades, with the larger falls in eastern Australia where there is more feed grain available and costs to execute cargoes have risen, the company reported on Monday.

AWB General Manager Commodities, Mitch Morison, said the world barley market had been quite lacklustre for several months, with relatively little trade occurring.

“Saudi Arabia is the world’s largest importer of feed barley and while small quantities have been purchased, no substantive trade has occurred since October,” Mr Morison said.

“The unrest in the Middle East generally has tended to weaken prices, however the market still expects Saudi Arabia to step in as a volume buyer at some point because alternative supplies from Ukraine will not appear until August.

“Feed wheat is readily available to a number of markets this year that might normally buy feed barley, so with a very narrow price spread between them, buyers are tending to prefer wheat.

“Malting barley prices on the world market have moved lower, in part due to the generally weaker grain market but also due to concern about potential interruption of trade to Japan.

“Across all grades the more significant falls in EPRs are in our east coast pool, which covers Victoria, New South Wales and Queensland, as buyers perceive greater costs in shipping from those states where infrastructure has been damaged by flooding and performance reduced,” Mr Morison said.

AWB also advised that on Friday 25 March the company will top up payments to growers who utilised AWB Harvest Finance when delivering into AWB’s barley pools, with payments in the range $32-75 a tonne (average around $38 a tonne).