The rush of demand for European feed barley has provided relief for producers struggling with low prices in a heavily supplied global grain market.

Reversing the usual price structure, feed barley is attracting better prices than milling wheat and similar rates to malting barley, used for beer ingredient malt.

“It’s a strange place for the market,” said Brent Atthill, head of consultancy RMI Analytics, citing a “perfect storm” of strong feed demand in the Middle East and China, limited availability of Black Sea barley and weak brewing demand in Europe.

The European Commission increased its monthly forecast of EU barley exports in 2025/26 by nine per cent last week to 11 million metric tons, which would be the highest since 2015/16.

In France, early-season shipments to China have been followed by steady demand from North Africa and the Middle East. Loadings include a rare cargo for Turkey, LSEG data shows.

Feed barley likely to revert to cheaper grain

Turkey’s switch this season from barley exporter to importer has contributed to market tensions. The country is due to hold an import tender next Wednesday.

An import purchase by Algeria this week could also yield more EU sales, with German and Polish supplies seen in contention, a German trader said. Algeria has not bought French grain since 2024 because of diplomatic tensions.

German barley shipments so far this year include about 30,000 tons for Algeria, 60,000 tons for Saudi Arabia and 8,000 tons for Iraq, another trader said.

“Both Germany and France have made large export shipments of barley so far this year and I expect more to be on the way,” the second trader said.

The export window for western European barley could soon close, however. Supplies in France are tightening while crops from southern hemisphere harvests boost options for importers.

Forward prices for the 2026 harvest suggest feed barley will revert to its role as a cheaper grain, with double-digit discounts compared with malting barley and milling wheat, traders and analysts added.

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WHY IT MATTERS: Canadian barley exports are running 46 per cent ahead of the year-ago pace, helping meet the global demand.

Feed barley, which represents most of the market for barley, typically trades at a steep discount to bread wheat.

Its overall price is lower than last year, against the background of a heavily supplied grain sector. But its relative strength against wheat has brought higher-than-expected costs for buyers, particularly in North Africa and the Middle East.

Despite a larger European Union harvest this year, availability of barley has shrunk due to brisk French shipments to China, slow farmer selling elsewhere, and Turkey’s switch from exporter to importer after a poor crop.

“Barley is currently like gold,” a German trader said.

Traders said west EU and Baltic feed barley prices were around the same as wheat at between US$221 and $226 a tonne FOB for December loading. Black Sea barley prices were higher with Russian and Ukrainian at around $227-$229 a tonne FOB.

France has already shipped half its projected non-EU barley exports for 2025/26, including nearly 900,000 tonnes to China, and is still loading for Saudi Arabia, LSEG data shows.

With French farmers largely sold out, export premiums have risen above wheat, traders said. Black Sea supplies are also dwindling, leaving Germany to fill gaps, though reluctant farmer selling is maintaining supply tension.

While barley is rarely so highly priced versus wheat, absolute levels remain below last year amid ample global grain supply. Some farmers are holding out for better returns, with recent purchases from Algeria, Tunisia and Turkey to be covered.

“With these tenders and other demand some sellers are speculating that by January they could get at least $10 a tonne more for barley,” the trader said.

Illustrating tight supply, Jordan received no offers in a tender for 120,000 tonnes on Wednesday.

But some say large crops in Argentina and Australia could soon dampen the market and prevent higher costs being felt down the food chain.

“These international barley prices may well cool down after Christmas,” British merchant Frontier Agriculture said.

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China is the world’s top wheat grower and also imports large amounts of grain when domestic supply falls short of demand.

Earlier this week, Henan province, which grows about a third of China’s crop, issued a risk warning as hot, dry weather threatened the wheat growing in its fields.

Chinese buyers have purchased four or five 55,000-ton shipments of wheat from Australia for delivery in July or August and around 200,000 tons from Canada, sources at two major trading firms in Australia said. The wheat is of milling quality.

The bookings from Australia were the first made by China from the country since last year, said one of the traders.

COFCO, the state-owned Chinese firm that handles most of the country’s wheat imports, did not immediately respond to a request for comment.

Wheat imports lower in recent years

China has in recent years been one of the world’s biggest wheat importers, buying in around 11 million tons worth $3.5 billion in 2024. Australia and Canada are typically its biggest suppliers.

But shipments slowed sharply after China reaped large wheat and corn harvests last year and have since remained low.

China delayed or redirected shipments from Australia earlier this year and imported less than a million tons of wheat in the seven months to March 31, Chinese customs data accessed through Trade Data Monitor show.

One of the sources said their company had lowered its forecast of Chinese 2025 wheat production by around 5 million tons but there was no guarantee that more purchases would follow because China has large wheat inventories.

“China is well self-sufficient in feed grains this crop year with heavy stocks,” said Rod Baker, an analyst at Australian Crop Forecasters in Perth, adding that faltering economic growth in China was also depressing demand for grains.

Speculation of Canadian wheat sales to China has been rumbling around Winnipeg, Canada’s grain industry capital, but with few details, according to traders.

Barley also booked

Chinese importers also booked a large amount of barley, according to traders.

Some said that six panamax bulk carriers carrying around 360,000 tons of French or Ukrainian new-crop barley had been sold for delivery in July or August, with others putting the volume much higher at around 1 million tons, also for shipment this summer.

“Chinese wheat and barley import buying has been very quiet in the past year and these are the first major deals I have seen in many months,” a German trader said.

Feed barley purchases with optional origin were from Ukraine or France. The deals were done at a price of around US$250-$254 a tonne delivered to China, one trader said.

— Reporting by Michael Hogan in Hamburg, Peter Hobson in Canberra, Gus Trompiz in Paris, and Ed White in Winnipeg. Additional reporting by Ella Cao in Beijing.

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Egypt’s state grains buyer GASC bought 290,000 metric tons of wheat in an international tender on Monday. The purchase included 120,000 tons from Ukraine as well as 120,000 tons from Romania and 50,000 tons from Bulgaria.

Russia, the world’s top wheat exporter and Egypt’s most important supplier, was kept out of the sale due to unofficial policies to prevent a price spike at home as the country seeks to combat inflation partly fuelled by military spending.

The restrictions, mostly not officially announced, include a minimum export price, export taxes and limiting sales of Russian grain by foreign trading houses.

“Had Russian exporters been allowed to offer realistic market prices, which would be much lower, I think they would have pretty much wiped up the Egyptian sale,” one trader said.

“The Russian moves are making Ukrainian supplies look more attractive, especially to importers in a difficult financial state like Egypt,” the trader added.

Russia’s agriculture ministry did not immediately respond to a request for comment on whether government grain export policies had led to the loss of business to Ukraine at this week’s Egyptian tender.

A trader in Ukraine said the Russian restrictions had provided more opportunites although the country had already realized about 60 per cent of its potential sales this year.

“The cheapest supplier is leaving, so it’s probably not who wins but who loses,” the trader said, referring to how Russian policies could raise the cost of wheat for importers.

Hesham Soliman, a trader in Egypt, said Russia was holding off waiting for prices to rise and profitability to increase.

“This isn’t just about Russian export restrictions. Russia knows it controls the market and is acting accordingly,” he said, adding Egypt’s state buyer had pushed back by purchasing Black Sea wheat from other sources.

Noamany Nasr, a former adviser to Egypt’s supply ministry, said Russia frequently introduced subtle barriers to curb its own exports, whether to raise prices or for internal reasons.

“Ironically, this benefits Russia’s competitors.”

Egypt’s supply ministry said on Tuesday that after the purchase it now has strategic reserves for five months of consumption although traders expect it will need to secure additional supplies in coming months.

“There’s still supply in Romania where farmers have been holding onto a lot of their crop,” another European trader said.

“In Bulgaria, supply is gradually getting tighter. In Ukraine, there’s not a huge amount left, though they haven’t been shipping as vigorously as the Russians.”

— Additional reporting by Pavel Polityuk in Kyiv, Gus Trompiz in Paris and Olga Popova in Moscow

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Chinese firms have asked for an anti-dumping probe into pork imports from the European Union, state-backed Chinese media reported on Friday, escalating tensions after the bloc imposed anti-subsidy duties on Chinese-made electric vehicles.

China imported $6 billion worth of pork, including offal, in 2023 and more than half came from the EU, Chinese customs data showed. Ending those orders would result in a huge loss of business for Europe’s meat industry.

“The full suspension of EU pork exports to China would be a potential nightmare scenario for the pork supply chain, with implications across the EU,” said Justin Sherrard, global strategist animal protein at Rabobank.

Sherrard added that the disruption would be felt across pork supply chains in Europe, resulting in lower prices and profit margins on unwanted stock produced by the region’s farmers.

China buys pig meat including ears, noses and feet, for which there is little demand from European customers. The ability to export those parts of the animal helps generate a higher value for the whole carcass, analysts say.

“It would take time, but may be possible for EU exporters to find alternative markets for the pork muscle meat cuts that are currently shipped to China,” Sherrard said. “However, I doubt alternative markets could be found for EU pork ‘variety meat’ exports that are currently shipped to China.

‘Painful’

Germany’s pork industry has already suffered an import ban by China since 2020 after the disease swine fever was found in Germany.

Its largest meat processor Toennies expects pork prices to fall if exporters such as Spain seek new markets for lost Chinese sales resulting in a “painful loss of income”.

“If EU exporters, particularly Spain, cannot sell pork to China, some sales would have to be made within Europe and downward pressure on EU pork prices can be expected,” said Toennies spokesperson Thomas Dosch.

After finding themselves unable to sell pork to China following the swine fever ban, Germany’s pork producers sought alternative uses for unwanted pig parts including as ingredients in sausages, pet food and industrial fats.

“While alternative uses can be found, they are not as profitable as selling directly to China,” said Dosch.

South America could benefit if China seeks alternative supplies, experts say.

“This would especially be expected to involve extra sales from Brazil to China, which has been expanding its export capability in past years,” said Tim Koch, meat analyst at German market consultancy AMI.

Top pork exporters to China (graphic)

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