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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Heavy rain since autumn is expected to have reduced sharply wheat planting in France, Germany and Britain, and the damp end to winter has raised doubts over whether farmers will be able to switch as much as area as anticipated to spring barley.

“We have already lost some wheat volumes in France, Germany and Britain,” Maxence Devillers, an analyst with Argus, said. “But the worst may be behind us and the weather forecast for the next two weeks could help improve things.”

Weather charts showed relatively dry conditions in the week ahead in Germany and Britain though parts of France may stay wet.

In France, spring barley sowing has hardly advanced in the past month, while for earlier-sown wheat conditions are at their worst in four years, according to farm office FranceAgriMer.

A drying out of fields could lead French farmers to extend spring barley planting beyond the optimal window that ends in mid-March, while persisting wetness would lead them to transfer some area to later-sown maize and sunflower, Devillers said.

In Britain, parts of southern England experienced their wettest February on record.

The Agriculture and Horticulture Development Board (AHDB) late last year estimated Britain’s wheat area would fall three per cent this year and spring barley area would jump 11 per cent, but the agency is doing a follow-up survey to re-assess the impact of heavy rain.

However, rain in Europe has varied within countries, with some zones are benefiting from moisture after drought in the past two years, while mild temperatures have spared crops from frost damage, according to analysts.

“Overall, the spring sowing is going pretty well in Germany nationally, with problems concentrated in some northern regions,” one German analyst said.

Weak prices for maize could favour planting of other spring crops.

“For spring sowings in Germany I would expect increased plantings of spring wheat and malting barley,” the local analyst said.

In Poland, where wet conditions may delay slightly the start of spring planting in most regions, maize could also lose out, said Wojtek Sabaranski of analysts Sparks Polska.

“Due to a deep slide in maize prices this season, the area planted to maize this spring is likely to considerably decline, in favour of such grains as oats and barley, as the supply of these grains has been tight, and prices paid high,” he said.

Elsewhere, winter rain has proved beneficial for crops by easing drought in Spain, Romania and Bulgaria, though moisture levels remained low in the east of Romania and Bulgaria, Argus’ Devillers said.

–Reporting for Reuters by Gus Trompiz in Paris, Michael Hogan in Hamburg and Nigel Hunt in London.

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Here is a more detailed look at what is happening:

Russian policy

In March, sources told Reuters that the Russian government recommended that exporters ensure prices were high enough to cover farmer production costs. Traders say the policy is also intended to limit exports and cool domestic flour prices, similar to export taxes and quotas applied in recent years.

Since then, traders say an export floor price has been increasingly apparent.

Sept. 20’s tender by Egypt, one of the world’s largest wheat buyers, showed offers of Russian wheat all at US$270 per tonne free on board before shipping costs. Traders believe this is the current minimum price sought by the Russian authorities for sales in international tenders.

Adherence to this minimum made European Union origins more competitive and Egyptian state buyer GASC booked two cargoes of Romanian wheat.

Why is the market confused?

Traders say that, while the minimum price has been applied at times, in other cases prices have fluctuated around lower levels, contributing to brisk Russian exports.

The floor price has been most visible in Egypt’s tenders, with sellers in recent weeks generally bidding at a single level.

In addition, a lower floor — about $10 a tonne f.o.b. below the minimum export price — is thought to apply in principle to Russian export sales outside international tenders, traders say.

Russia has not confirmed the existence of minimum wheat export prices and international traders say indications are given orally to exporters without formal written rules.

Russia’s agriculture ministry declined to comment.

Market sources say Russian wheat is being regularly offered for sale well below reported floor levels.

Traders said export prices from the Russian Black Sea port of Novorossiysk Sept. 25 were around $243-$245 a tonne f.o.b. for 12.5 per cent protein wheat on October shipments. Russian analysts in September reported levels on either side of $240.

Russian wheat may be used to supply part of some 600,000 tonnes thought to have been booked by Algeria in another tender in the second-last week of September, in which state buyer OAIC reportedly paid $272-$275 a tonne (cost and freight included), according to traders.

Is it a problem?

Lack of visibility over pricing in Russia, a top exporter, makes it difficult for traders and importers to take positions and anticipate trends.

With Russia having a huge surplus, shipments from war-torn Ukraine curtailed and drought reducing harvest prospects in other exporting countries, the international market looks more reliant on Russian wheat this season.

Traders cited lengthy negotiations in the September tenders held by Egypt and Algeria as a sign of tensions created by Russian price levels. Price disparities can alter the cost of orders by several million dollars. Importers, meanwhile, already face high prices and the U.S. dollar’s strength versus local currencies.

Traders and analysts are trying to understand how long the minimum price may apply and whether it may slow Russian exports after the huge volumes shipped this summer.

Analysts now expect Russia to achieve record wheat exports this season on the back of its two largest-ever harvests in 2022 and 2023.

Western traders and officials worry that the war in Ukraine has spurred Moscow to politicize grain exports, including through its offer of wheat donations to poor African states and its withdrawal from a Black Sea grain deal, which allowed shipments from Ukrainian ports.

Moscow says parts of the grain deal meant to facilitate Russian exports were not respected.

The exit of global trading firms from the Russian market this year may also reduce insight into grain prices and supply.

At the same time, Russian state intervention has been a feature of grain exports for years, with an export tax and quota regularly used.

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The outbreak on a farm in Emsland, Lower Saxony is the first in the northwest region where much of Germany’s pig sector is concentrated.

ASF, which is harmless to humans but often fatal to pigs, was first found in eastern Germany in September 2020, believed to have been spread from Poland by wild boars. This prompted China to ban imports of German pork, halting a trade that had brought in around one billion euros (C$1.34 billion) a year.

Some other major importers, including South Korea and Japan, followed suit, and rival EU producer Spain was among those able to pick up fresh business to Asia following the bans.

“This is very frightening news and if there were hopes that ASF had been confined to east Germany, and that the disease was under control, these have now been completely thrown out of the window,” said Justin Sherrard, global strategist animal protein at Rabobank.

Lower Saxony is Germany’s largest single pig production area with about 6.4 million pigs and piglets, Germany’s national statistics office says.

“With ASF cases continuing to occur in Germany no end to China’s import ban on German pork can be expected,” said Tim Koch, meat analyst at German market consultancy AMI. “Any hopes that China could lift the ban in the near future are over.”

Germany was for many years the European Union’s top pork producer but was overtaken by Spain last year after it lost access to China, the world’s largest importer of pigmeat.

Netherlands, France at risk

China’s own pig herd, the world’s largest, has also suffered heavy losses due to ASF but is beginning to recover.

“China anyway has a reduced import need for pork from Europe and it could be years before the Chinese market could be reopened to German pigmeat exports,” Koch said.

The growing number of wild boar in Germany, which can wander over long distances, means a spread of the disease had been expected despite government efforts to confine it to east Germany. Around 4,000 ASF cases in wild boar have occurred in Germany, mainly in the eastern states of Brandenburg and Saxony.

The outbreak also heightens concerns about the potential spread to neighbouring countries.

“If ASF can make a 500-km jump from east Germany to north Germany the concern is that it could move to the big pork industries in the Netherlands and France,” Sherrard said.

Without any immediate prospect of regaining access to major export markets such as China, Germany’s pig faming sector is expected to shrink further.

“Germany’s pork sector would love access to China and other markets lost since ASF entered the country,” Sherrard said. “But I think there is a realization in Germany that ASF will remain in the country for the long term and that Germany’s pork sector must adjust to a smaller customer base.”

— Reporting for Reuters by Michael Hogan in Hamburg.

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The conflict has rattled grain markets, with European wheat futures surging to a record high on Thursday, as it raised the prospect of stalled shipments from Ukraine and Russia, which together account for nearly a third of world wheat exports and almost a fifth of global corn exports.

Moscow’s military assault led Ukraine to close its ports on Thursday and they remained shut to commercial shipping on Friday.

Romania, a major grain supplier that, like Ukraine, exports through the Black Sea but outside the conflict zone, was seen as an obvious backup option for merchants.

Traders said about 400,000 to 500,000 tonnes of Romanian wheat and 200,000 to 300,000 tonnes of Romanian corn was bought since the fighting in Ukraine started, largely for immediate shipment or loading in March and April.

Ukraine is a key wheat exporter to Middle Eastern and Mediterranean importers including Egypt, Turkey, Italy and African countries.

“There was increased demand for Romanian wheat with their ports outside the war zone,” one trader said.

“It was mainly from multi-nationals seeking quick supply cover, volumes were substantial on both Thursday and Friday.”

Part of the demand was thought to cover recent sales to Algeria, a destination where Ukrainian and other Black Sea origins have been gaining market share.

Ukraine’s massive corn exports supply customers including China, Spain, the Netherlands, Iran and South Korea.

As well as Romanian corn, trading firms had booked at least several small vessels of French corn to cover nearby shipments to EU destinations like the Iberian peninsula and the Benelux countries, traders said.

There was also talk of French wheat being bought to replace Ukrainian supplies. Some traders said several hundred thousand tonnes may have been booked, although others cited smaller initial volumes for immediate needs, with availability of rival origins like Argentine wheat reducing interest in French supplies for further-away periods.

Importers had also enquired about German wheat but high prices deterred significant buying, traders added.

Some merchants were also waiting for further developments in the conflict after Thursday’s market panic.

“If there is a quick end to the fighting, ports in Ukraine are likely to reopen quickly,” another trader said.

— Reporting for Reuters by Michael Hogan in Hamburg and Gus Trompiz in Paris; additional reporting by Sybille de La Hamaide in Paris.

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Authorities in the German state of Brandenburg quarantined a 15-km area around where the boar was found to search for any more dead animals and also restricted the movement of farm animals.

South Korea, Germany’s second largest pork customer outside the European Union, announced a ban on German pork imports.

ASF is not dangerous to humans but is fatal to pigs and a massive outbreak in China, the world’s biggest pork producer, has led to hundreds of millions of pigs being culled.

Major pork importers such as China often impose bans on imports from countries where ASF has been found, even if only in wild animals.

“The attention is now on whether importing countries, especially China, impose import restrictions on German pigmeat,” said Andre Schaefer at commodity brokerage Kaackterminhandel GmbH.

“China especially is a vital customer for Germany. If import bans are imposed we could see pork prices under pressure in Germany,” he said.

German pork exports to markets including China and Japan are likely to come to a stop along with South Korea, German meat industry association VDF said.

The association said Asian importers are especially important buyers of pork products which are not popular in Europe such as feet, ears, tails and bones.

Export curbs would prevent these products being sold as food and “would have a strong influence on product flows in the pork market.”

In the first four months of 2020, Germany exported 158,000 tonnes of pork worth 424 million euros (C$658 million) to China, double the amount in the same period last year, the country’s statistics office said.

‘No reason to panic’

Agriculture Minister Julia Kloeckner said Berlin had been in contact overnight with China, adding that Germany does not have a formal agreement with China about the disease, “so therefore we are in permanent dialogue.”

Germany is stressing “the principle of regionality” in the case, she said. Regionality means buyers impose import restrictions only on parts of a country affected by a serious animal disease, she said.

Germany has built hundreds of kilometres of fencing along the Polish border in an attempt to stop the disease being spread by wild boar.

Berlin has been concerned ASF could enter the country after a number of cases were confirmed in recent months in wild boars in western Poland, with one only about 10 km from the frontier.

Cases have also been confirmed recently in about 10 other European countries, where wild boars are suspected of spreading the disease.

Kloeckner said she expected German pork exports to other European countries to continue.

The case is “no reason to panic,” Kloeckner said, adding that authorities were intensively assessing what measures needed to be taken to combat the disease and prevent it spreading to commercial pig farms.

The German farmers’ association DBV on Thursday called for a corridor free of wild boar to be created along Germany’s border with Poland.

— Reporting for Reuters by Thomas Escritt and Michael Hogan.

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