Barley: Prospects are for a lower output next season
January 5, 2018 at 7:08 PM ,
Starry Night Ltd.
Barley: farmers’ response to market forces
BULGARIA. Before the start of harvest 2017-18, fallen-through area of barley actually amounted to the insignificant 85 ha across all regions within the country, according to local authorities. However, even if expected fallen-through acreages increased by a few times till the start of the upcoming harvest, it would not be so much Nature, as it will be man-made drawn decisions that will affect output 2017-18. According to the Ministry of Agriculture, estimates of sowed land of barley came to 109,800 ha, which on a year-to-year basis lags behind by 16.6%.
Farmers, as if trying to circumvent the workings on the demand side of the market and thus trying to place themselves a little higher on the vertical axis of a supply-demand schedule for the upcoming season, strategically decreased planted acreages for next year. Whether the optimism of having lower quantities, leading to higher prices, will remain intact remains to be seen, since the demand of locally grown barley does not exist in a vacuum, but is instead part of a broader international market, occupied by other regional market players. The approach will be tested at the beginning of harvest 2018-19.
Supposedly, the expected lower output will not lead to a loss in foreign markets
In recent years, the country has seen a decrease in its exports, and the substantial cut in the cultivation of barley for next season seems a natural response to what seems to become by now a traditional trend. The analysis behind the substantial reduction of planted acreages for the upcoming season must be based on the fact that local market players will not suffer substantial losses in foreign markets while domestic consumption could well be covered by domestic production alone. By the end of week 51 of 2017, local market players exported 37% of aggregate output this year, which came to a total of 633,393 mt, to EU markets while only 4.38% to markets outside the EU. The country could not compete for foreign markets outside the Union with regional market players such as Ukraine, for instance.
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