<article><p class="lead">China has significantly increased its barley purchases from Ukraine in the 2020-21 marketing year (July-June), with continued strong demand from Chinese buyers becoming crucial for Ukraine's new season product exports, which are forecast to increase by about 1mn t on the year. </p><p>China became the largest importer of Ukrainian barley in 2020-21, having put the lid on long-standing dominance of Saudi Arabia in Ukraine's export barley market, with the Middle Eastern country having shifted to purchases of Russian and Australian supplies.</p><p>Ukraine has exported 2.8mn t of barley to China so far this season. This accounts for 69pc of the country's total 2020-21 barley exports of the product and is around 1.9mn t, or 250pc, higher compared with Chinese purchases of Ukrainian product in the 2019-20 marketing year. </p><p>This significant increase in this season's barley shipments from Ukraine to China resulted from strong growth of domestic feed grain consumption in the Asian country, following recovery of its pig herd from African swine fever. China's total feed barley imports are estimated to increase by about 40pc to 8.3mn t in 2020-21, according to the US Department of Agricultural (USDA), with the country having imported 6.9mn t of the product so far.</p><p>Trade tensions between China and Australia, which used to cover about 70pc of Chinese total barley imports in previous years, also contributed to the surge of Ukrainian supplies to the Asian country. China has refused to purchase Australian barley this season, with Canadian, French and Ukrainian suppliers benefiting the most from that move.</p><p>The competition for Chinese share between the three barley exporters is expected to remain strong in the new marketing season, but, unlike France and Canada, Ukraine depends heavily on China's imports, as the country produces mainly feed grade barley, which restricts the number of potential buyers on the global market. This means that any decrease in Chinese purchases of Ukrainian product in the next season will strongly affect the country's total barley exports, which are forecast at a near record-high level.</p><p>Ukraine is projected to produce 9.2mn t of barley in the 2021-22 marketing year, up by 18pc year on year, according to the economy ministry, with exports expected to rise to about 5mn t from an estimated 4mn t in the current marketing season. </p><p>China has booked about 2mn-2.5mn t of new barley crop from Ukraine, market participants said, with French sales of 2021-22 crop product to China already standing at about 2mn t so far. Canadian barley exports to China could also maintain their strong pace in 2021-22, having reached 2mn t in July-February 2020-21.</p><p>This means that Ukrainian exporters could face difficulties in selling bumper barley supplies globally in the 2021-22 marketing season, if an 18pc year-on-year increase in production is realised, given tough competition in the Chinese import barley market combined with a sharp drop in Saudi demand for Ukrainian barley.</p><p class="bylines">By Alexey Yeromin</p><p><div class="picture"><div><span class="pic_title">Ukraine barley exports</span> <span class="units">mn t</span></div><img src="https://argus-public-assets-us.s3.amazonaws.com/2021/04/07/ukrainebarleyexports07042021014048.jpg"></div></p></article>
