Latin America Barley Market Revenue Forecast

Latin America Barley Market Production and Exports

Latin American countries have seen tremendous growth in barley production over the last decade rising it to one of the top global producers. The primary barley growing countries in the region include Argentina, Brazil and Chile. Argentina is currently the largest barley producer in Latin America with production reaching over 7 million tons in 2021. Brazil saw its barley output grow at a CAGR of 10% during 2015-21 to reach nearly 2.5 million tons last year. Chile has also expanded barley cultivation resulting in yearly production averaging around 500,000-600,000 tons in recent years.

Collectively, these three nations accounted for over 85% of total barley production from Latin America in 2021. Favourable weather conditions, large cultivable land and higher yields have supported increased sowing of barley across vast swathes in these countries. The Latin American barley is mainly exported to Asia and the Middle East where it is used as animal feed. Argentina alone shipped out over 4.5 million tons of barley globally in 2021, up by 15% from the previous year. Brazil exported around 1 million tons while Chile exported nearly 250,000 tons of barley last year.

Driving Factors for Growth in Latin America Barley Market

There are several factors that have contributed to the impressive growth witnessed in Latin American barley sector over the past decade. One of the primary drivers has been the high demand for animal feed from fast growing markets like China, Vietnam and some Middle Eastern nations. These countries require large volumes of corn and barley imports to meet the demand from their dairy, poultry and pork industries. The relatively lower production costs and competitive prices have made Latin American barley an attractive option for importers.

Additionally, the region benefits from ideal environmental conditions for barley cultivation. Wide variations in soil types, rainfall patterns and altitude levels across countries like Argentina, Brazil and Chile allow for production in diverse agro-climatic zones. Barley thrives well in the temperate and sub-tropical highlands found across much of these nations. Rising global commodity prices have also played a role by incentivising farmers to allocate more land for barley sowing which requires lower input costs as compared to other crops. Additionally, the adoption of high yielding barley varieties suited for Latin American conditions has boosted per hectare output.

Emergence of New Export Markets for Latin America Barley Market

While China and Vietnam remain the top export destinations, Latin American barley producers are developing supply chains to new and emerging markets. Driven by recent trade agreements and diplomatic relations, Argentina has stepped up exports to countries like Indonesia, Philippines and Bangladesh over the past 3-4 years. These nations offer lucrative opportunities due to their huge livestock feed requirements. Brazil too aims to curb its dependence on China and diversify exports by establishing contacts with buyers in Egypt, Japan and African nations which provide potential for long term off-take agreements.

Chile is eyeing increased barley shipments to destinations in West Asia and the Middle East region apart from regular client South Korea. The regional trade bloc MERCOSUR comprising Argentina, Brazil, Paraguay and Uruguay is also focusing on fostering barley trade within member countries and between partners. This will help secure sustainable export avenues and balance price fluctuations arising from dominant buyer concentration risks. Leveraging advantages of proximity and existing preferential duty structures, Latin American barley exporters are widening their global footprint and market reach.

Rising Significance of Malting Barley Production

Apart from feeding barley, Latin American farmers have begun devoting more land resources towards cultivating malting varieties which fetch higher prices in global trade. Argentina is a pioneer in this segment with several big malting plants producing beer and whisky grades. It exported over 550,000 tons of malting barley last year, primarily to customers located in Europe, North America and East Asia. Chile too has carved a niche exporting superior 2-row malting barley to breweries across different continents. Meanwhile Brazil aims to set up its domestic malting industry by boosting contracted farming of premium malting strains.

This shift highlights Latin America's potential to emerge as a strong supplier of brewing-grade barley complements along with animal feed grains. Investments in processing infrastructure, supply chain logistics and research collaborations will help build on early momentum and create long term price competitiveness for the region's malting industry. Leveraging advanced agronomic practices and diverse genetic resources, Latin American farmers seem primed to dominate the global malting barley sector apart from continuing their lead role as feed barley powerhouses.

Conclusion

To summarize, vibrant growth witnessed in Latin American barley production over the past decade underscores the region's rise as one of the largest barley cultivation and exporting bases globally. Ideal climatic factors combined with robust demand from importing nations have supported expanded sowing areas across Argentina, Brazil and Chile. While China remains the top importer, new markets are emerging across Asia and Africa boosted by preferential trade ties. The region is also making inroads into the lucrative malting barley domain traditionally dominated by select Western nations. Future prospects remain promising if recent policy support, infrastructure boosts and research collaborations bear fruit.