Three weeks before the entire barley harvest reaches barns and silos, prices are 15% higher than around the same time of 2011, according to the data of the Agriculture Ministry.
Still, many farmers will not be able to sell at the highest price because a lot of their harvest was affected by rain, forcing them to sell at a discount because it is not up to the standards of the major grain traders.
The trend of the barley crop and price directly affects the business of the live stock farmers, animal feed makers and beer, or milling and bakery industry businesses.
“We’ve started buying the new harvest,” says Cezar Gheorghe, general manager of Ameropa Grains, one of the top five grain traders in Romania. The price is somewhere around EUR195 per ton for the barley loaded on ships in Constanta harbor (SE Romania), while last year it stood at about EUR170 to EUR173. “There aren’t any major differences in terms of total quantities compared with last year. There haven’t been problems in general because the plants had a snow blanket over them in the winter,” Gheorghe said.
On the other hand, Gabriel Barbalau, owner of United Grain Group, one of the few Romanian-held grain traders, says the competition for barley is really high right now but the supply available so far has quality problems because of the heavy rainfall of recent months.
Barbalau notes that the situation on the barley market is out of the ordinary because “the price used to be EUR20 below the wheat quote and now it’s jumped EUR30 above the wheat.”
If the wheat and corn prices follow the trend of the barley price then they should reach a peak of EUR205-EUR210/ton and EUR210-EUR215/ton, according to ZF estimates.
Barley quality did suffer, farmers confirm, explaining that rain affected the crops in some areas. However, those who finished harvesting rushed to sell because of the fast price increase lately. Once most of the farmers are done harvesting, the price should go down because of the large supply.
“We’ve just started harvesting and the price keeps on rising,” says Cristian Lupu, representative of Nova Fructis in Dolj County (southern Romania), which farms 500 hectares of land, half of which planted with barley. The company sold at EUR175/ton, which is already higher than last week, when the buyers were offering EUR163/ton.
Despite the rising prices ahead of the new harvest, some farmers are not rushing to sell. They believe that the price has yet to peak.
“I’m not selling anything. I haven’t signed any contract and I won’t sign any, either. The market is too hectic for me to sell,” says Aurel Placinschi, general manager of Societatea Agricola Moldova in Tiganasi, Iasi County (NE Romania), which farms 4,500 hectares of land, 10% of which planted with barley. “They [the traders i.e.] are standing with their trucks ready by my fields, [thinking] maybe we’ll sell. I’m harvesting next week, putting it in barns and silos and then we shall see.”
The first data available point to a barley harvest of about 1 million tons, down some 30% on 2011, according to the March estimates of Coceral, a European organization representing the agricultural raw material traders. At the current prices, the barley harvest should be worth EUR250 million.
Barley accounts for only 5% of Romania’s grain production, a lower share than in France or Germany, where the percentage is 16% and 25%.
The decline in barley harvest comes after five years during which it had nearly tripled, according to Agriculture Ministry data.
Estimates show the barley production will be in line with the expectations for the entire grain harvest of Romania. According to Coceral data, Romanian farmers will harvest 17 million tons of grain this year, almost 2.5 million fewer than in 2011, one of the best years ever for the Romanian agriculture.
The sector generated almost EUR19 billion to the country’s economy last year, contributing 0.3% of the 2.5% economic growth.
(English version by Loredana Fratila-Cristescu)