12 May 2000

Malting barley looks to world market

By Mike Gutsell

MARKETING prospects for malting barley depend increasingly on supply and demand across the world as EU prices become more aligned with, and, therefore, affected by, the wider world market price.

Winter barley demand will rely largely on domestic use for UK brewing, where a "flat" market is expected to continue. Imports from the Continent, tough drink-drive laws and increasing wine consumption mean UK brewers have struggled to increase output.

Bearing in mind a small rise in winter sowings, premiums at harvest are likely to be modest. Growers closest to maltings will have an advantage. But it is difficult to forecast prices until a market becomes established.

In past years when maltsters have been in the market early and values have fallen they have been caught out. Therefore, they are less keen to do forward business.

For growers without a local home, the export market should be viewed as an alternative.

While some business has already been done for the period August through to January, this may mean keeping barley longer while markets develop.

Demand out of EU countries, chiefly France and Denmark, to eastern Europe or even China has a knock-on effect on the UK market. And if our winter barley can compete against Canadian and Australian supplies it can also fill a gap.

Spring barley is likely to be in steady demand for malt exports, yet slightly down for distilling use. At the same time, there is good potential for the export of spring malting barley, although, again, this will depend on Canadian and Australian crops.

Prices have risen from their "low" and will be subject to volatility of world trends as prospects of harvest 2000 are evaluated. Markets will need close attention. &#42