Export orders drive barley up

Barley prices have hit a lifetime high on unprecedented export demand. Marketmen expect a further surge of Rs 100-150 a quintal on the cards in anticipation of fast depleting stocks and no deceleration in export demand.

The prices of barley in the spot market have already jumped by over 23 per cent in the last fortnight to Rs 1,114 a quintal from Rs 900 a quintal. According to trading sources, the country has an overall stock of only 60,000 tonnes.

"Stocks are unlikely to last beyond the end of this month, going by the pace at which exports are taking place," said Abhishek Goel of Jaipur-based Vivek Trading Company.

Market sources said that as new crop was expected only in mid-March next year, the market scenario was extremely bullish. Exports shipments are mainly going to Saudi Arabia and other west asian countries via Kandla port.

According to marketmen, the current freight on board rates at Kandla is hovering around Rs 1,225 a quintal. This includes the transportation charge from areas such as Jaipur and Shrimadhopur (delivery centres). The market could climb by Rs 1,000-1,500 a tonne in the days to come, they reckon.

The country has never witnessed such a phenomenal rise in overseas demand. Ukraine has been the main source for barley among the countries in West Asia. However, since exports were banned in Ukraine, the demand had shifted to India.

Another factor that led to a surge in demand for barley is the spiralling rates of wheat. Wheat is now being substituted by barley as animal feed.

Sources said, "Normally, it is maize which fills the gap. But as new crop of maize is still awaited, barley came in focus." The country requires around 20,000 tonnes of barley for sowing.

"Considering that sowing will start in mid-November, India can export only 40,000 tonnes out of 60,000 tonnes," Goel said. If stocks meant for sowing are also exported, the rally in the barley market will know no limits, he added.

The firms which are on a procurement spree include Ellana India, Adani, Australian Wheat Board's Indian subsidiary and Laxmi Trading Corporation. Besides, there are various small north-India based trading firms operating in the market.

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PACING RETURNS

Barley touches life time high, up 23% in last fortnight

Spot rates likely to jump further by Rs 1,000-1,500 a tonne

Present stock is 60,000 tonnes and is likely to be exhausted by the end of September

Higher wheat prices contribute in demand surge for barley