EU: Barley markets depressed by large enough malting barley crop and uncertain malt and beer demand
A large enough crop of malting barley and an uncertain malt and beer demand during the corona crisis depressed markets in the weeks following harvest, H. M. Gauger GmbH said in their December report earlier this month.
It misled trade and industries to only see safe supplies and keep waiting for lower markets. Large short positions, particularly against long-term agreements of brewing groups, remained uncovered.
Prices of malting barley indeed dropped to to only a few euros above feed barley. No surprise, much quality barley disappeared in the feed sector, industry sources report.
The UK dropped out as a supplier, not only due to Brexit, but also because of quality problems in England reduced their role in EU malting barley supplies to almost nihil.
In the meantime France shipped 1.1 mln tonnes of barley, mostly feed, but also 300,000 – 400,000 tonnes of malting barley, to China. There are further quantities of old crop and by now also 1 mln tonnes of new crop feed barley in the books for China. Surprisingly, France also sold 90,000 tonnes of malting barley to Mexico and large quantities to short distance destinations inside the EU.
Danish farmers have been very slow sellers since harvest, it is uncertain how much Danish barley can still come to the market.
Markets rose steadily, and eventually brewers had to cover their (LTA and other) shorts in 2020 barley. Industries and trade seem to hold little hope for a turn-around of markets and started to purchase crop 2021 barley, in some cases even 2022 barley at insignificantly lower prices than for old crop barley. Most forecasts are for stable or even firmer markets; and typical for bull markets, there is a certain nervousness that old crop supplies may be running out.
Wstecz
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