Analysis - Rain puts Russian barley harvest at risk
Fears have been raised about the quality of Russia's barley harvest this year
Hopes of a high-quality barley harvest in Russia have been put at risk by heavy rain, according to an analyst.
Until a few weeks ago, expectations of a strong Russian harvest in quantity and quality terms had been high in the country, Bernstein analyst Trevor Stirling said in a note. But “incessant rains” in Russia's Central and Volga regions have disrupted harvests in the last two weeks, he said, citing industry experts.
“Combined with high temperatures, we now believe that there is a very real risk that we could see a repeat of 2011's harvest, with pre-germination in the fields and high variation in protein content,” the note said. This will mean another harvest high in quantity but low in quality, Stirling suggested.
However, the outlook for Western European is more postive for brewers, the note said. “Although the cold spring weather has hindered crop development in some regions, the region is on track to deliver a strong surplus, albeit not quite as big as last year,” said Stirling.
He added: “With global grain prices having tumbled in the last six months, the forward price for the 2013 crop is trading well below that paid for last year's crop, implying approximately a 10% fall in the price of malt versus last year.”
Last week analysts Nomura said it was currently seeing a material drop in barley prices in most global regions as hopes for a good harvest in the northern hemisphere increased.
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