Barley is also the first price indication of this farming season and market information points to a decline in prices because of the rich harvest in the major agricultural centers.
“Prices stand at about EUR170/ton (RON750/ton farm price i.e.), 20% lower than in the same period a year ago. It’s a signal that the harvest is better than last year,” says Stefan Poienaru, general manager or Agrofam Holding, which posted EUR27 million revenue from its farming business last year.
The difference between the price estimate of the farmer and the peaks of last season is about EUR100/ton, considering last year’s price went up to EUR260-EUR270/ton.
The barley crop and price trends directly affect the business of livestock farmers, feed producers, brewers and milling and bakery companies.
Moreover, barley is a suitable for export product considering the high demand from the Near East, a traditional destination for Romanian grain.
“Both barley and the rest of the crops look fabulous now, may God help us get them to our barns. I think this will be another outstanding year for agriculture,” says Adrian Porumboiu, owner of Racova group, which posted EUR160 million revenue from farming and food processing last year.
“The curious thing is that barley is more expensive than wheat, although it normally is cheaper.”
Barley price is indicative of the trend of the wheat price as the two move relatively in sync. Although barley is traditionally cheaper, that has not been the case for the last two seasons.
Soon after harvesting barley price reached EUR190-EUR200/ton last year, EUR30 higher than the wheat price, even though it was traditionally EUR20/ton lower.
The price peaked at EUR270/ton, according to the official statistics of the Agriculture Ministry.
Although they will be lower this year, the prices farmers will get will depend on the quality of the barley harvest, one of the risks one takes when investing in barley.
Both traders and farmers complained about quality issues last year because rain affected the barley crops in some areas.
Barley generated EUR170 million revenue in Romania’s economy on average in the last eight years and EUR222 million last year according to Eurostat data. Peak barley revenue was recorded in 2008, EUR262 million, while 2006 saw the lowest revenue, EUR83 million.
(English version by Loredana Fratila-Cristescu)