Chennai, April 10 Barley prices are ruling lower by at least Rs 200 a quintal in various markets across the country on lower export demand and recovery in global production. In some markets, the prices have dropped to below the minimum support price of Rs 680 a quintal.
Currently, barley in various Agricultural Produce Marketing Committee (APMC) mandis is quoting below Rs 800 a quintal. During the same time last year, the prices ruled above Rs 1,000.
In Ahmedabad, wholesale traders quoted barley at Rs 900 a quintal against Rs 1,300 a year ago.
“Prices are lower since there is absolutely no demand for export this year,” said Mr Mohan Bishnoi, an exporter, in Ahmedabad. “At this time last year, we had good demand, even in the domestic market,” he said.
Export of barley, which was zero till 2005-06, increased to 3.75 lakh tonnes (lt) during 2007-08 (June-May) from 1.31 lt during 2006-07. During 2008-09, exports are projected at 50,000 tonnes by the US Department of Agriculture (USDA).
Volumes drop
Barley production in the country, on the other hand, is seen dropping to 12.3 lt this season ending June against 13.3 lt last year. Annual demand is estimated at around 14 lt. If prices are declining despite lower production, it is due to higher global production.
Global output this year to May is seen at a 11-year high of 153.8 million tonnes (mt). According to USDA, global exports are likely to lower at 18.4 mt against 18.6 mt a year ago, while carryover stocks are seen 50 per cent higher at 30.1 mt (20.2 mt).
USDA, in its grain report, said South Asia production this year would be lower at 16.37 lt against 19.35 last year, while demand would be 14.07 lt against 16.05 lt, leaving a carryover stock of 61,000 tonnnes (31,000 tonnes).
Trade sources said apart from export demand, prices were higher last year in view of uncertainty over the wheat crop. “After a clear picture emerged on the wheat crop, prices began to decline,” they said.
Price tab
The trend seems to follow this year too, as some of the APMC mandis have begun to report prices lower than MSP. For example, at Pataudi in Haryana, 330.5 tonnes of barley were sold on April 3 at Rs 640 a quintal. The next day, 366 tonnes were sold at Rs 670.
In Kesarisinghpur, Rajasthan, 1,925 tonnes of barley were sold at Rs 635 a quintal on April 4, while on April 3 4,189 tonnes were sold at Rs 620 a quintal. In Gajsinghpur (Rajasthan), 2,011 tonnes of barley were sold at Rs 675 a quintal on Wednesday.
Prices have looked up a little this week as rains in Punjab and Uttar Pradesh have caused some damage to standing wheat crops.
The additional global supplies along with lack of export demand are likely to keep the prices under pressure. A clear picture on the price behaviour is likely to emerge once a firm estimate of the wheat crop is made.
Source : Business Line