There is export interest for both the 2010 and 2011 malting barley crops, in contrast to a lack of immediate demand from UK maltsters.
However, while growers preferred to sell a single delivery month, export buyers wanted to buy on a spread of months, calling for the grain at any time during the contract period, said Openfield’s group sales and trading director David Dowty.
On these terms, spring malting barley was worth £165/t ex farm for October-December 2010 and £170/t for January-March 2011. For harvest 2011, price indications are £140/t ex farm for winter malting barley and £150/t for springs. Further forward, spring malting barley was £155/t ex farm for October- December 2011 and £160/t for January-March 2012.
High feed barley prices have seen malting barley from the 2010 crop sold away from its traditional UK customers, who are carrying high stocks of malt. In turn there is little interest from brewers in a mature market where the UK has the second highest duty rate on beer in the EU and UK drinkers are consuming 13% less alcohol now than in 2004.
The huge carryover had created a real blockage, with no UK customers wanting malting barley before December, said Mr Dowty at Openfield’s annual harvest review and new season outlook meeting this week.
The lack of contracts, confidence and direction meant that for 2011, the UK winter barley area was likely to be up to 5% lower than 2010 and the spring area could drop by between 5 and 10%, although that depended on the progress of winter wheat plantings. These reductions come on top of a 13% fall in the 2010 winter barley area and a 26% reduction in the spring crop.
One bright spot in the market was the development of southern hemisphere demand, which continued to grow but this trade would be very much price based, said Mr Dowty.