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UK: Barley prices down as malting slows in the UK
Since President Trump announced his raft of tariffs which came into force at the beginning of April there has been chaos with decisions being changed on a regular basis, some rates have been altered and some tariffs delayed for several months, The Scottish Farmer reported on April 20.
Last week Trump announced a temporary suspension of tariff increases for most countries, while stepping up pressure on China which pushed Chicago futures for soybeans and wheat higher. Price volatility of cereals and oilseeds has increased since the announcement of the tariffs, due to uncertainties around global demand, particularly from China who are the world’s biggest buyer.
Oilseeds have taken the biggest hit, largely because a bigger share of global production is exported, and China is the main buyer of soybeans. President Trump appears to have ignored the rules of international trade as the World Trade organization of which the US is a member along with 165 other countries covering 98% of world trade, exists to lower barriers to trade for the economic benefit of all members.
These WTO agreements are negotiated and signed by a large majority of the world’s trading economies and form the legal foundation for global trade. One area where the US tariffs could impact the UK industry and growers is in the malting barley markets as the US is the top export destination, by value, for Scotch whisky.
The Scotch Whisky Association reports the value of Scotch whisky exports to the US stood at £971m in 2024 or 18% of the total value of whisky exports. The US was also the third largest destination by volume behind India and France in 2024. Further increased costs for US consumers due to increased tariffs pose a further risk to export levels which could reduce domestic malting demand, which is already under pressure.
Information from AHDB shows that in February 2025 Brewers Maltsters and Distillers used just 135,600t of barley which is 10% lower than in February 2024 and the lowest monthly total since February 2022. From July 2024 -February 2025 usage is down 9% on the same period last season and demand is under pressure due to the cost of living impacting spending within the UK and trends for younger people to drink less alcohol.
This decline in consumption and slow malting barley demand in Europe is why malting premiums have fallen sharply this season. Earlier in the month sterling reached an almost five-month high against the US dollar in response to the tariff announcement due to concerns about how global trade, which is dominated by the US dollar, could be impacted.
Sterling fell by 3.5% against the euro as the euro was considerably up against the US dollar and these rises make sterling and euro-priced goods more expensive in the global market which often trades in US dollars.
As a result, domestic and European prices may need to be reduced to maintain export demand in a global market. The UK’s main exports to the US include machinery, cars, pharmaceuticals, and electronics and includes a 25% tariff on foreign made cars. UK exports also include £2.9m fresh and frozen beef, £23m pork and £68m of cheese.
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