World: Global supply of barley increasing at CAGR of 3.05% over four years

The global supply of barley has risen at a CAGR of 3.05 percent over a period of four years, according to Beroe Inc, a procurement intelligence firm, PRNewswire reported on August 27.

The production of barley and malting barley is expected to witness minimum growth in the upcoming years due to the increase in consumption of soy and corn in feed and biofuel industries.

The key factors driving the growth of the barley and malting barley industry include the demand for feed barley from Middle Eastern countries and global demand for malting barley in brewing industries. Europe and Russia dominate the production of barley and malting barley at 41 percent and 19 percent respectively, along with Ukraine at 19 percent. These regions are the largest producers holding nearly 60 percent of the total market share.

The global supply of malt is expected to grow at a CAGR of 7 percent over the next three years. Large maltsters have been continuously expanding their capacity due to an increasing demand for the brewery market. Malt production units are running at more than 85 percent rates with increasing demand from the beer industry, and in-house malting capacities of large breweries have also been expanded in recent years.

The prices have been sharply falling down due to alternative feed availability such as corn and soy. A slight decline in the trade volumes was also observed due to the fact that China had an abundance of corn and it was considered as a cheaper alternative to barley for feed industries. With the global trade volumes of barley declining, there has also been a brief drop in the barley stocks globally.

There is no suitable malt substitute available commercially for malt, and specialty malt varieties produced from wheat and other sources are gaining attention with increasing demand from craft breweries.

Europe is the largest producer and consumer of barley. However, their major export variety is feed and they domestically consume 80 - 90 percent of the malted barley, which is used to produce beer.

The industry is dominated by the top 10 suppliers globally and has not witnessed a significant number of new entrants. Majority of top growing regions are contracted by maltsters and access to raw materials for new entrants is a huge challenge.

Feed barley prices in Canada are expected to be in low demand amongst moderate to dull supply. This is due to the U.S.'s excess supply of corn and soy, which is an alternative of feed barley.

Prices of barley determine the prices of malt, and barley prices are determined based on the wheat prices in any particular region owing to its high substitutability in feed applications.

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