Tighter global barley stocks force Saudi Arabia to pay 12% more

Saudi Arabia bought 960,000 mt of feed barley over the weekend at tender, paying 12.3% more than it did at its previous tender a month ago as tightening global supply pushes prices higher still, market sources said Monday.

SAGO, Saudi Arabia’s state-owned grain procurement agency, paid an average price of $243.47/mt CFR for 16 vessels of 60,000 mt for delivery between April and May.

Delivered prices ranged from $230/mt CIF Jeddah from an unnamed LLC trading house to $251.84/mt CIF Dammam from Glencore.

SAGO barley buying now stands at 6.3 million mt since the start of the 2017/18 marketing year, with typical annual imports coming to more than 8 million mt according to IGC data.

Saudi Arabia, which traditionally buys feed barley rather than competing feedstocks, uses the cereal as a feed for its goat, camel and sheep populations.

Saudi Arabia previously ran a costly irrigation programme to grow its own cereal crops but abandoned the scheme in the late 2000s and instead turned to the global market.