by PressDemand for barley and corn rebounds in China
How demand for barley and corn has affected grain prices
From 2020 to 2021, the commodity market experienced rapid growth due to the enthusiasm of Chinese importers. However, in 2022-2023, their activity declined, and grain prices gradually stabilised. The situation has changed, and demand for barley and corn from Chinese buyers has increased again.
After a lull, Chinese importers are ready to make big deals on the world market. They are particularly interested in barley and corn from France and other European countries. They have also resumed purchases in Australia, with trade relations improving considerably.
Review of barley trade flows
Global traders have noted the activity of Chinese buyers. Increased demand led to higher prices, particularly for French grain:
— barley sales started at a discount of €25 per tonne;
— this discount has now decreased to €17 per tonne.
Australian traders are recording an increase in interest in buying barley FOB. Chinese agents are signing the majority of contracts here. At the same time, the cost of a tonne of the crop has already risen to US$235.
Barley from other European countries sells for US$245 a tonne. However, many buyers reject such offers because of impurities in previous shipments.
It is worth noting that export shipments from the EU and European countries are subject to import duties in China, which are 3%. At the same time, there is no duty on products from Australia.
According to the forecast, China’s barley imports will amount to 8.4 million tonnes in 2023-2024. From July to December, local consumers purchased about 6.5 million tonnes.
Corn supply situation
Demand for European corn has increased among Chinese buyers:
— for contracts with fulfilment in a few months, the price is at US$227-229 per tonne;
— the average offer is US$230-235 per tonne;
— the buyer is willing to pay US$225-227 per tonne.
In addition, importers from China are actively interested in buying US corn. It is selling at around US$237 per tonne. However, there is no information on the deals struck with American producers.
Based on USDA forecasts, corn imports to China in the current season will be around 23 million tonnes. Shipments from September 2023 to January 2024 totalled 15 million tonnes. Most of this will come from exporters in Brazil.