Analysis - Europe barley surplus shrinks, but price set to fall for brewers
This year's harvest is "positive"
Western Europe's 2013 malting barley harvest will be good news for brewers with prices expected to fall to 6% below last year's, an analyst has predicted.
Bernstein analyst Trevor Stirling said today (28 May) that the region should see a 1.5m tonne surplus, compared to 2.1m tonnes last year, with malting barley selling for US$415 per tonne. "Much could happen between now and harvest, but the outlook is positive for brewers," Stirling said.
The surplus should help global stocks recover from 2010's harvest, which was badly damaged by heat waves and fires in Eastern Europe.
A lessening of fears over the US crop has also pushed down prices, Stirling said. Last year, droughts in the US led to record crop failures but the analyst added that prices this year will likely be marginally down on 2012.
In Russia, prices are also expected to be down on last year's. However, costs should still be higher than for a “normal” Russian crop, Stirling said.
The EU accounts for about 45% of the global barley harvest and a higher percentage of the malting barley harvest. Malting barley, used by brewers, is of a higher quality than feed barley and is normally converted into malt before it can be used to brew beer.
Stirling said that Western Europe's malting barley prices could drop further still if corn prices continue to fall. A low corn price would make the grain more attractive to feed buyers and take demand away from barley, Stirling said.
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