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4-2017

Global hop market

A local alternative to mass beer suggested by independent brewers has been successful and is now altering the global market. Beer is becoming more diversified, so transnational companies have to accept the new game rules and to switch focus to young and fast growing markets. All these processes increased the demand for aroma and bitter hop as well as their acreage expansion on two continents. However now there appeared a downward trend of alcohol consumption in the world, so even special sorts can soon turn to be sufficient. In this connection the dynamic American hop market is already facing some problems. EU hop producers have become more cautious, they are not racing to exceed the demand and look forward with more confidence, judging by the contract terms. 

Hop Market in Russia

Germany still dominates the Russian market, yet over the recent two years one has been able observe a continuous success of Czech hop suppliers. Their expansion and growing popularity of hops from the United States became the drivers of supplies growth in 2016 despite the preceding modest harvest crop in the EU, as well as the factor of relative stability in 2017. In this connection, in 2017, the ratio of the varieties continued to shift towards the aroma ones, and the supplies of Magnum hop and other alpha varieties were reduced. However, the import of bitter hop pellets is partially replaced by extracts, especially from the major beer manufacturers. Total volumes of alpha acid supplies, according to our estimation, decreased by approximately 5% and returned to the level of 2015. Barth Haas Group continues dominating the hop products market; HVG also increased its weight. At the same time, Morris Hanbury significantly reduced the supplies in 2017.

Malting barley at current levels supported by a stable feed barley market

Despite the very tight supply with normal and good quality malting barley in the EU, the EU malting barley prices fell sharply in recent weeks. Now, they have probably reached a level at which, given the scarcity, one can no longer talk of a reasonable price level compared to feed barley prices. The lack of industry demand for malting barley was indicated as the main reason for the weakness, which was not the case for feed barley. A stable demand of feed barley importers and traders and the reduced availability made feed barley prices drop much less, than wheat and malting barley prices in the same period.

A rise in malt and malting barley demand could quickly lead to higher malting barley prices and premiums over feed barley, whereas the possibility of falling prices is limited. Only if feed barley prices also fell, malting barley prices could see further significant losses.

3 Oct. 2011

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