A beginner’s guide to barley: Price, uses & market overview

Explore a thorough overview of the barley market, learn how it works in simple terms and get to grips with its significance as a popular global commodity.
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Updated: Nov 23, 2023
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On this page, we explore everything you need to know about barley. Gain insights into barley market trends, pricing mechanisms, and the environmental impact of barley. 

Read on to learn more about this popular commodity and find links to beginner friendly guides explaining how you can get involved in barley. 

What is barley?

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Barley is a cereal grain that has been cultivated for over 10,000 years. As one of the world’s oldest commodities, it’s a versatile crop that is grown mainly for use in livestock feed, malt production, and human food products. 

Its adaptable nature means barley can be grown around the world from North America and Europe to North Africa and Asia. Historically, barley was predominantly used for brewing beer and distilling spirits. In recent times, there has been a change and the majority of barley cultivation is focused on animal fees. 

Historically, much of the barley crop went to brewing beer and distilling spirits. However, over the past century, the majority of barley cultivation has focused on animal feed. 

Barley market overview

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Despite ups and downs over the past decades, the barley market has demonstrated overall growth. According to the International Grains Council, the global barley market has reached nearly 150 million tonnes in the past few years. 

The barley price has been pretty stable on the whole but it is very seasonal, with prices peaking in June and July of each year going back to 2016. More demand is coming from emerging markets in Asia in particular, but so far the supply has held up to keep prices in check.

Supply can be fragile, however. In 2012, weather disasters in Canada, Australia, and Russia – three of the biggest barley producers – damaged the crops and sent prices soaring up to $260/ton, its highest price for more than 30 years. Grain prices at that level are no good to anyone, so it quickly fell back again and has been around half that ever since.

Is barley valuable? 

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Yes, barley is a valuable commodity and there are numerous reasons why investors are attracted to the market. We have highlighted some of these key fundamentals below, explaining what they are and why they matter.

  • Barley has many uses. Barley is a widely used crop that is versatile and used in various industries. Some of these include food, beverage, agricultural feed, and biofuel. This diverse usage means that demand for barley is consistent. 
  • There is a limited supply of barley. Growing barley requires specific conditions, which means it’s only produced in certain parts of the world. This makes its price more stable than other commodities as it’s less likely to be affected by oversupply. 
  • Demand for barley is increasing. As mentioned previously, barley is used in a wide range of industries. As the global population continues to increase, demand for food, feed, and biofuel is expected to grow. This could make barely an excellent long-term investment. 
  • Barley has economic importance. Like other crops, barley is important in many regions of the world, especially North America and Europe. It has a key role in the agriculture sector, and its success is linked closely to economic success. 

How to invest in barley

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You can invest in barley by using a commodity trading platform. These platforms offer a range of commodities and are very easy to use. There are different platforms suitable for specific requirements. 

Some let you buy physical barley, others let you trade barley, and many are designed for investing in the grain. Visit our dedicated guide to discover how to invest in barley.

Barley in your investment portfolio

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A diverse investment portfolio can help protect you during market uncertainty, and the inclusion of barley can add value while allowing you to spread your money across various markets. 

Barley often moves independently to traditional investments like stocks and bonds. You can include barley in your portfolio as a hedge against potential losses. During times of economic uncertainty, investors view commodity grains such as barley as attractive options. 

Barley’s long history and the fact it is a crucial commodity for various markets including livestock feed, makes it a good long term play.

Barley vs other commodities

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Barley is part of the grains family of commodities, including wheat, corn, and rice. Each commodity is unique in its own way and offers different features for investors and traders. You can learn more about specific precious metals using our dedicated guides below. 

  • Wheat. Wheat is a grain that is grown around the world and is used for various foods. 
  • Corn. Corn is one of the most versatile commodities with many uses, including livestock feed, biofuel, oil, and food. 
  • Rice. Rice is the most popular grain commodity and a staple for half the world’s population 
  • Soybean. Soybean is a major global commodity used for livestock feed and cooking oil.

FAQs

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Risk disclaimer
Prash Raval
Financial Writer
Prash is a financial writer for Invezz covering FX, the stock market and investing. For over a decade he has traded spot FX full time while... read more.