Initial reports indicated a 24 per cent increase in the area sown to barley in Australia while forecast production of 5.4 million tonnes (mt) was up from 4.24 mt last year, managing director Michael Iwaniw said in a statement.The figures are the same as those issued by the Australian bureau of agricultural and resource economics (ABARE).

Good conditions for the Australian barley crop were marred only by some delays in seeding in Western Australia, ABB said. World barley prices could be affected by a recent decree by the King of Saudi Arabia that a ceiling price now applied to sales of barley, with the Saudi Government paying the shortfall between the ceiling and the world price.

"The impact on world barley prices by the decision is difficult to determine but, as with the European subsidy system, it will cause a distortion of the market place which we will be watching closely," he said.