By FWi Staff
FARMERS are unlikely to offer the 500,000 tonnes of barley to intervention on 2 November previously predicted.
“We are fast approaching decision time on whether barley should be offered to intervention or not,” said Robert Kerr of Glencore Grain. “However, the deluge that was initially anticipated is almost certainly out of the question.”
A substantial rise over recent weeks in the free market price is one reason that Mr Kerr put on the expected lack of interest for intervention. “What producers receive for intervention, which is likely to be paid in February or March, is not that different from spot movement prices at that time.”
The intervention price is currently £83.91/t for November, while futures prices for barley in March are at £81.00/t. “It would only take one load to be rejected at stores to make it unprofitable to move into intervention,” continued Mr Kerr.
With the possibility of a further devaluation in January, and an increment of 70p/month, intervention prices have the potential to increase by an additional third in the new year.
“However, if producers are sure of the quality they have, and with the 15% moisture derogation helping, it could be an advantageous move for some.”
It is not yet known what will happen in January, but if farmers have committed barley to intervention in November, they wouldnt be able to take advantage of any price increase on the free market, warned Mr Kerr. “Shippers do want barley, and we have already bought up a large amount that was destined for intervention.”
However, a spokesman from Banks Agriculture put the quieter week of trading down to both traders and producers waiting to see how intervention develops. “With a lack of new export business, the consequence is that suitable lots of UK feed barley should be offered to intervention in early November.”
Average prices for UK feed barley inched up 88.57p this week to £73.70/t for spot movement.