EU Malting barley is in short supply – price increase is expected

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Michael Fleischer, malting barley trader at Grainexx, Hamburg drew this conclusion today at the International malting barley seminar of research institute VLB, in Berlin. The barley harvest in the EU-27 is insufficient for the needs of the malting industry this year. The prices could increase significantly in the coming months. The chief trader and partner estimates, that the carry over of winter and summer barley from the 2010 harvest may only be about 100,000 tons each. A demand of about 10.2 million tonnes from the 2011 harvest is facing an offer of about 10.4 million tonnes. The balance would not be sufficient for already traded or planned exports AND domestic demand. Other third-country exports of around 400,000 tonnes, which would normally come from the EU, this year would need to be sourced elsewhere. On the import side some lots of old crop Argentine malting barley had already beed sold to the Netherlands and Belgium.
The reason for the scarce supply, were the difficult weather conditions during spring and in harvest time. While the west of the EU had drought conditions in spring, causing problems, in the north a rainy harvest time caused producers concerns. They complain about regionaly heavily reduced yields and poor qualities, especially what the protein content is concerned.
In the meantime, weak prices for malting barley in the EU where caused by the lack of industrial demand. The Brewers are not on the market. Should execution problems arise, because of insufficient quality, the prices will return to rise, following Fleischer.