Canada barley trade losing ground to Argentina

Mon Apr 9, 2012 4:33pm EDT
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By Rod Nickel

WINNIPEG, Manitoba (Reuters) - Canada's barley exports have dwindled to a fraction of their former might, as Argentina muscles in on trade and domestic cattle feedlots offer farmers better prices than exporters.

Through March 25, Canada was on pace for exports of 1.3 million tonnes in 2011/12 (Aug/July), similar to the past two marketing years, according to Canadian Grain Commission data. Those three years have recorded the lowest Canadian barley exports in at least the last three decades, except for the 2002/03 drought year.

"Over the long term, (the decline) is about just far more competitors coming into the market," said John Pauch, coarse grains analyst for Agriculture and Agri-Food Canada, the federal farm department.

Two years ago, Australia overtook Canada as the top shipper of malting barley, used in brewing, according to International Grains Council data. In total barley trade, Canada looks to slip behind Argentina this year to sixth place.

Argentina's rising stature in barley trading is largely due to growers' disillusion with their government's tight controls on wheat exports, but is also evidence of South America's clout in world grain trading, as productivity increases and more land enters production.

Argentina's barley output rose 38 percent to 4.1 million tonnes in the 2011/12 harvest that finished in January.

More than half of that total is destined for export, with Argentina expected to ship 2.5 million tonnes this year, more than double Canada's total, according to IGC.

While Argentina has made inroads in Saudi Arabia - the world's biggest barley buyer - Canada's barley exports there are down 50 percent from August through January and look to fall far short of the five-year average, Statistics Canada data shows.   Continued...

The moon raises over two grain elevators and a barley field on the Canadian prairies near Vulcan, Alberta, September 7, 2011. REUTERS/Todd Korol