* Barley part of rising Chinese imports driving grain markets
* China’s tariff on Australian barley favours other suppliers
* French, Canadian new-crop feed barley already sold -traders
* Forward deals on top of big shipments in current season (Adds details on food inflation, grain prices and French barley sowing)
PARIS, Feb 3 (Reuters) - China is scooping up millions of tonnes of barley from France and Canada that have yet to be harvested, as its appetite for animal feed grain spills over into orders for next year’s crop.
China has bought huge volumes of foreign crops to feed a pig herd that is rebuilding after the deadly African Swine Fever epidemic led to the culling of hundreds of millions of hogs.
Chinese buying has contributed to higher prices for key crops and to food inflation worldwide as concerns about food security during the COVID-19 pandemic drive governments and industry to stock up. Benchmark corn prices recently hit their highest level in 7-1/2 years.
Beijing is aiming to plug a gap in supply after diplomatic tensions with Canberra led to the imposition of a trade-sapping 80.5% tariff on Australian barley.
A large amount of Canada’s 2021 barley crop has already been booked by Chinese buyers, traders said, with one citing at least 1 million tonnes.
That would be in line with at least 1 million tonnes of new-crop European barley thought to have been sold so far, traders said.
Some said France would supply the European volume, with one trader putting French sales at up to 2 million tonnes, although others said the sales were on an optional basis and could be sourced partly from Ukraine.
Shipment would be mainly over July-September, traders added.
Barley export premiums for this summer’s French crop surged last week as traders said exporters covered some of their hefty advance sales made to China since late 2020. This has put feed barley prices unusually well above bread wheat.
“The focus has really switched to the new crop,” Brent Atthill, head of consultancy RMI Analytics, said. “That is validating the idea that Chinese demand is not short-term.”
Early sales of the 2021 barley crop were for livestock feed, according to traders and analysts.
China also imports malting barley to make beer ingredient malt.
Barley from Europe and Canada next summer will contribute to feed supply as China awaits its next corn harvest and maintains a steep tariff on Australian barley, said Helene Duflot, analyst at Strategie Grains.
“The fact there have already been new-crop purchases from France and Ukraine, probably, shows that China is not about to change its mind on Australia,” she said.
Adding to tension on the French market was a sharp expected drop in upcoming spring barley sowing, after a high level last year, Duflot added. France produces both winter and spring barley.
China’s tariff has slashed Australian barley shipments, handing opportunities to other, more remote suppliers. For the European Union, collectively the world’s top barley exporter, that has meant France, as the only EU country fully accepted to supply barley to China.
Booming Chinese feed grain use and high domestic prices could bring record barley imports this season, as is the case with other grains, Duflot said, projecting that barley imports will top 10 million tonnes for the first time.
Forecasts vary considerably, reflecting uncertainty about the level of Chinese grain stockpiles. The International Grains Council sees 2020/21 Chinese barley imports of 5.8 million tonnes and the U.S. Department of Agriculture 7.0 million tonnes, levels that would keep China behind Saudi Arabia in imports.
French barley shipments to China in the 2020/21 marketing year to June have already reached 1.8 million tonnes after a busy January of loadings, surpassing a total 1.5 million tonnes in 2019/20.
Although a lull is expected around this month’s Lunar New Year, recent sales cited by traders for the end of this season are expected to bring French full-year exports to China above 2 million tonnes, with Strategie Grains anticipating a near-record 2.8 million.
Barley may also eclipse much-discussed French wheat exports to China.
After 1.5 million tonnes shipped in the first half of the season, French wheat sales in the rest of 2020/21 were looking limited and no new-crop deals were confirmed, according to traders, who say signs China is taking in some Australian wheat may have curbed interest in French supplies.
Canada, meanwhile, shipped 1.5 million tonnes of barley to China in August-December, already matching last season’s total volume, official data showed. (Reporting by Gus Trompiz in Paris, Hallie Gu in Beijing, Michael Hogan in Hamburg and Rod Nickel in Winnipeg, Manitoba Editing by Veronica Brown and Matthew Lewis)
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