EU: Malting barley prices are to grow strongly

Relying on average yields and qualities, analysts display a general concern over the malting barley situation in EU. Experts estimate EU surplus of spring malting barley will decrease by nearly 500,000 tones. Reports say the situation is to remain difficult even if US dollar weakness attenuates the competitiveness of exports to non-European countries (China, Russia, and Colombia). Besides, sowing of the spring yield has been delayed because of bad weather conditions.

Eastern Europe is demonstrating growing appetite for Western Europe malting barley. Combined to that, the likely unstable European continental climate may lead to a superior Eastern Europe countries demand for imports from their Western neighbours, which are currently the only eventual supplier for this region.

A closer look to the global grain market evolution in the forthcoming years, including the market for malting barley, conducts to an important general revaluation. Accordingly, there are some conflicting trends which directly or subsequently act over the global grain market evolution. Among them: the evidence of fast growing world population, the extension of cultivable areas which are turned over to the fast-growing market in energy-crops (biethanol, biogas, biodiesel), high energy costs and subsidies given to industries which provide renewable energy sources. In result, large areas are being pulled out from their initial food production use.

This progress will practically apply to all major grain producing areas of the world. This situation will tighten grain supplies, EU intervention prices probably will get overtaken by specific price raises driving up as well the price of malting barley. Thus, the common trend of decreasing malting barley prices will likely be abolished.

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