PRINTABLE VERSION   EMAIL TO A FRIEND   RSS FEEDS 19:00 UK, 11th Apr 2014, by Agrimoney.com
Malting barley price 'anomaly' to disappear

The relatively cheap price of malting barley left from last year's harvest appears anomalous, despite the large stocks still left to use, Evergrain said, as it nudged higher its forecast for the 2014 harvest.

Old crop malting barley is trading - at E205 a tonne in the benchmark French export Moselle market, and at about £195 a tonne in the UK at discounts of some E20 and £17-20 a tonne respectively to values being offered for grain from the 2014 harvest.

The gap appears a reflection of the large supplies left over from the last harvest, when EU production, at 9.33m tonnes, represented a surplus of 1.38m tonnes over demand, on Evergrain estimates.

"There is still plenty of malting barley from last year available," said Matthias Wree, managing partner at the Swiss-based malting barley trading house.

'Prices will converge'

However, this surplus may find willing buyers, thanks to its strong specifications, as well as its price discount to new crop.

"Last year's crop is of very good quality. Maltsters would prefer to use it for the next five years if they could," Mr Wree told Agrimoney.com.

Indeed, they may stick with old crop supplies for a few weeks longer than normal, rather than switching to grain from the 2014 harvest with "unknown" specifications.

The result will likely be "that prices of old crop malting barley and new crop converge", he said

Bigger surplus

The comments came as Evergrain doubled to 822,000 tonnes its forecast for the EU's malting barley output surplus for 2014-15.

The upgrade reflected in part a nudge higher by 58,000 tonnes to 8.35m tonnes in the bloc's production of the grain.

However, it was mostly down to a reduced expectation for consumption of this year's crop, as maltsters stick with old crop supplies by some two-to-four weeks longer than usual.

Thanks to this effect, EU demand for new crop malting barley will fall by some 5% year on year to 7.52m tonnes.

Crop prospects

Evergrain's production estimates factor in 5-year average figures for variables such as yield.

EU spring barley crops are reckoned to have got off to a broadly favourable start, albeit with sown areas depressed in many countries thanks to a benign winter which, in meaning low levels of frost damage to autumn-sown crops, has limited the need for replanting with spring grains.

FranceAgrimer on Friday pegged at 80% the proportion of spring barley rated "good" or "excellent", down one point week on week, but up two points year on year.

Malting barley consultancy RMI Analytics said last week that "rather warm temperatures and a lack of rain has led to rising concerns" over crops in southern and eastern Germany, Poland, Austria and the Czech Republic, where winter precipitation was "scarce".

"The situation for the spring crop is not overly-critical yet, but will have to be well-monitored."

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