EU: Malt market is firstly a barley market this year – analysts
This year’s malt market is firstly a barley market, H. M. Gauger GmbH said in their latest report earlier in November.
The crop year started with no carry-over of crop 2020 barley. Missing malt call-offs in the middle of the Covid-19 pandemic resulted in a slower malt production in 2020/21 and resales of maltsters’ barley stocks into the feed sector. New crop barley was needed in production extremely early after harvest.
The barley crop was good in Denmark, the U.K., and Spain, between disappointing in France and Germany, and really bad from Finland in the north to the whole barley region in the east and southeast of the EU.
Malting barley is short in the EU. Maltsters will use much compromise barley, any available two- and six-row winter barley, which, however, cannot completely fill the gap.
The large French/Belgian/Scandinavian malting groups have their own, rather safe barley supplies. All malting companies in export locations are better off, as they had good export sales books and therefore attractive barley cover early in the season. However, inland maltsters, principally in South Germany and all over Central Europe, struggle between empty barley markets und uncovered und unwilling brewers. Quite a few brewers have not bought their malt of crop 2021, respectively have not priced the barley parts of their long-term agreements (LTA’s).
As prices rose constantly since harvest time and have reached record levels by now, those maltsters could not afford to be short for barley, not long either without sales commitments. Either their brewer customers will pay the necessary prices for their malt supplies, or maltsters must shut down part of their production. There are warnings of complete closures.
One hope is import barley. Only two origins will have a surplus of malting barley: Australia and Argentina. The EU has a TRQ of 304,000 tonnes of barley with an import tariff of EUR16.00 per tonne, not enough, but possibly helpful.
So far business has not materialized, shippers and customers shy away from yet unknown new crop qualities, high freight costs and prices at destination will probably be at or above the high levels of EU barleys. Not to forget, there is still the pandemic. Beer sales are still lower than before the crisis, and a new Covid wave has started in Europe.
Regresar
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