Russia export ban boosts barley as wheat market keeps calmer

AFTER Thursday's fireworks in wheat futures trading, yesterday was described by traders as a quiet day with November 2010 supplies closing at £157 per tonne, about £11 per tonne below the peak reached at mid-afternoon the previous day.

There was a flurry of activity in physical barley trading as grain businesses picked up on export markets that have suddenly become available again because of the Russian export close down, a move described by Vladimir Putin as "expedient" in keeping down food prices and maintaining cattle numbers.

Ian Keith, main Scottish barley trader for UK grain giant Frontier, said yesterday that there were opportunities of an export trade with countries throughout the world that had not existed before the Russian export ban.

These markets in Northern Africa and Europe have in recent years been supplied by barley from countries around the Black Sea that have been hungry for cash but this year they are no longer in the export market.

"We are now seeing much better feed barley values as buyers are looking for considerable tonnages."

The problem for many Scottish barley growers is that they have contracted at least part of this year's crop. Some contracts with malting buyers have been on fixed prices but others are on an open price basis which should allow the growers the benefit of the rise in market price.

Meanwhile the NFU of England and Wales has used the surge in cereal prices after the Russian export closure to back up their argument for maintaining more productive agriculture in the UK.

NFU combinable crops board chairman Ian Backhouse said it was the second time in four years that weather had led to unprecedented wheat market moves.

"This demonstrates how finely balanced global supply and demand are. It's impossible to speculate on the impact this dramatic market movement might have. But this does show how important it is to maintain and develop our own productive capacity in grain faced with unpredictable supply from overseas.

He claimed producers in the EU had a reliable record on their capacity to produce and export. "We must remember that stable production in the EU is relevant not just to our own but also to global food security.

"We have an increasing responsibility to the rest of the world to ensure we fulfil the potential we have to produce more food while impacting less on the environment."