Analysis - Relief for brewers as malted barley prices set to drop
Rain has hampered Russia's harvest
European malted barley prices could drop by 14% this year despite predictions of a poor quality harvest in Russia, an analyst has said.
The price per tonne in Europe could fall to EUR385 (US$510), down from an estimated EUR445 for last year's crop, Bernstein's Trevor Stirling said in a note this week. A fall would continue a drop in price that started at the end of last year because of reduced anxiety over US grain stocks, Stirling said.
However, it comes despite warnings that Russia's malted barley harvest risks a repeat of 2011, when rain disruptions produced high quantity but low quality.
Rain and high temperatures have led to pre-germination in Russian barley fields and high variation in protein content, Stirling said. Maltsers will inspect the harvest next month for a clearer picture, but the analyst said there is a “silver lining” to any bad news to come.
“If the industry has to import significant quantities of malting barley once again in 2014, at least the global spot price will be much lower than in recent years,” Stirling said.
Last month, an analyst predicted than India will become a key hub for malted barley production as demand for beer continues to grow in Asia.
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