EU: Malting industry: optimistic prospects to face rough production statistics

EU malt exporters booked malt export licences for 1.978 million t from July 1, 2005, until May 30, 2006. That number is still 60,000 tons less than the bookings on the same date last year. If fixations continue at the average pace of the crop year, we would achieve total exports of 2.140 million t in 2005/06. This figure is larger than anticipated. It means that the drop in exports to Russia has almost been compensated by shipments to other destinations, which gives hope for continuous exports in future years. Of course, risks are also numerous, new capacities in Argentina, the expansion of Mercosur, FTA’s between Australia and S.E. Asian countries.

Analysts have adjusted their balance of malt S/D in the EU as follows:

EU malt capacity on June 1, 2006:

Usage for beer production 5.32 million t
Usage for whisky 450,000 t
Usage for food 200,000 t
Malt export 2.2 million t
Total: 8.17 million t

In theory it means that 93.1 % of existing capacity will be used. The reality will be different. Production statistics show that France, Germany and the U.K. have produced less malt than total capacity. In France and the U.K. further closures are rumoured. Two Hungarian maltings have not worked since half a year.

Experts have reported often that malting margins were far too low since a few years and would lead to crises of malting companies. 2005 was a bad year, 2006 will be worse for maltsters’ balance sheets. It was a shock, but hopefully also a wake-up signal that a financially sound traditional malting company of excellent reputation – Grandes Malteries Modernes – decided to shut down its operation in France.

Meantime the insolvency of Weissheimer was lifted after an investment by the Russian banker maltster Russky Solod. The uncertainty of Alba Domu in Hungary continues, and the future form of the whole enterprise remains unclear.

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