Offers slow for barley intervention
BARLEY intervention opened on Monday – to a trickle of offers. Just 36,000t was earmarked by the middle of this week, compared with the 500,000t on day one predicted by the trade at harvest.
While prices remain near £75/t ex-farm, intervention will fail to attract much interest, says Robert Kerr of Glencore Grain. "At harvest, barley was worth £60-65/t off the combine. November delivery was worth £70/t. Intervention at the time was worth £81.41 delivered, about £76/t ex farm. It was the best market by far."
Since then two green £ devaluations have pushed the intervention value up by £2.50/t, but the ex-farm price has outstripped it. "Ex-farm prices near ports are at parity. And farmers can be paid in 28 days for free market barley, rather than three months." However, from January, intervention could be more attractive. Payments will be converted from euros into sterling using the daily market exchange rate.
The UK green rate is currently below the market rate. Sterling values will rise if it remains there and the new system is introduced as expected, says the HGCA.
Over the past month, the benefit has varied from 10p to £2/t. *