Scots malting barley firmer
Scots malting barley firmer
PRICES for Scottish malting barley should firm this year, and prospects for the following five years are good as demand increases, according to Iain McLean, commercial manager with Pauls Malt.
In the past decade, whisky consumption worldwide has increased by an average 2%/year, with annual sales worth some £2.1bn.
Despite the constant increase in consumption, Scotch whisky production has fallen in recent years as manufacturers try to match supplies with demand.
"It is a very cyclical industry," says Mr McLean. "We saw production peaks in 1990/1991 and then in 1997/1998, followed by four or five years afterwards of reduced production as manufacturers tried to correct their stocks. "We are currently at the bottom of the low-demand trough," Mr McLean says.
He believes]
that better prices for farmers should start feeding in for this harvest. "Winter sowings have increased this season, so we anticipate a reduction in spring barley acreage in Scotland," he says.
The estimate of barley available for malting from the 2002 Scottish harvest is about 858,000t. And, with 845,000t tonnes going in to distilling or brewing in Scotland last year, supply and demand will, at best, be in balance, says Mr McLean.
That compares with 2001 when maltsters knew they had more than 100,000 tonnes spare barley in the market.
"If the weather goes against us, we buyers may well be short," Mr McLean says. "I dont believe we will ever get back to prices of £120/t or beyond, but I think we could see prices up at least £5/t this year, with better prices after that as demand increases," he adds.
"Keep an eye on things," Mr McLean advises. "The requirement in the coming years will be more and more for sub-1.6% nitrogen barleys to satisfy this demand." *