EU: Malt of barley crop 2022 virtually sold out

There is no “malt market”. During past week quotes were reported – for crop 2023 - in the range of EUR 700 to EUR780 ex works and well above EUR800 FOB seaport, in bulk in container, but with the remarks “nominal” and often also “sold out”, H. M. Gauger GmbH said in their early October report.

The price and supply uncertainties – barley, energy, transport, inflation – make calculations difficult and risky, long-term validity of offers impossible, industry experts said.

Malt of barley crop 2022, delivery 2023, is virtually sold out in the EU, in long-term agreements (LTAs) and fixed price contracts. Most barley cover against LTAs is also done. While maltsters do not dispose of unsold capacities, brewers’ malt stocks are considered very tight until Sept/Oct 2023, when new crop malt will become available. The large international brewing groups cover a very large part of their annual demand by LTAs, therefore the large Belgian and French maltsters have sold at least 70 – 80% of their capacities for 2024. In Germany brewers use LTAs to a smaller extent, so far malt sales incl. LTAs cover only 30 – 40% of the brewer’s 2024 malt demand. One notes caution on the brewers’ side, there are too many signs of inflation, recession and therefore the risk of lesser beer sales.

Malting factories are running at full capacity since months. Even announced shutdowns, e.g. in Slovakia, have not realized. Worldwide estimates (Rabobank) are that the malting capacity is short of 1.5 mln tonnes. There is a constant, but unusable surplus in inland locations in China. At present Ukraine cannot use their full capacities, Russian malt is not acceptable for many brewers in the world. Large and medium brewers in Europe, America and Australia try to persuade their suppliers to add to their malting capacities.

Conclusion: the malting industry will change and grow, malt will remain an attractive item for years to come. Regrettably disturbances, war, recession, inflation prevent a clear trendline, the analysts said.

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