A recent report by RMI Analytics indicates that despite a decrease in the 2023 crop, the harvest of malting barley remains sufficient to meet the demands of beer and whiskey producers. The reduced crop is anticipated to coincide with a significant decline in beer consumption compared to 2022, alongside decreased demand for feed barley due to increased availability of inexpensive corn.
Global Production and Supply Dynamics
World barley production for the 2023/24 marketing year experienced a decline of nearly 10 million tons compared to the previous season. Despite this reduction, ending stocks decreased by only 2.2% due to decreased consumption. The supply of quality malting barley is expected to adequately fulfill the requirements of brewers and whiskey producers until the 2024 harvest.
Market Trends and Price Outlook
Following several years of robust harvests from 2019 to 2022, barley demand has reached a 10-year low, resulting in a 10% reduction in barley exports from Europe in 2023 compared to 2022, and a 4% decrease compared to 2021. Analysts predict a continued downward trend in malting barley prices in the near future, with premiums for malt quality expected to significantly decrease for the 2024 harvest.
Regional Outlook
Optimistic prospects for the 2024 harvest in Europe are forecasted, with winter temperatures exceeding normal levels. However, heavy rainfall may lead to delays in the sowing of spring barley. In Ukraine, reduced export demand for malt and malting barley has resulted in decreased demand and lowered prices, with the Slavut malt plant undergoing repairs and other factories reducing purchases. Consequently, malting barley prices have dropped from €150-175/ton FCA at the beginning of the season to €125-137.5/ton FCA in February, aligning closely with fodder barley price levels.
Amidst changing market dynamics and regional challenges, the malting barley industry navigates uncertainties while adjusting to shifts in demand and supply. Analysts advise vigilance regarding quality concerns and market fluctuations as stakeholders prepare for the upcoming harvest season.
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