Despite reasonable crop prospects, supplies of grain and especially malting barley remains comfortable and prices are depressed. This year, the limiting factor is not supply but demand, which is much lower than in former years because of the COVID19 pandemic.
The barley crop in Europe, namely in Spain, France, Germany, Benelux, The Czech Republic but also in parts of Scandinavia and the UK is already finished and shows overall satisfying quality and average yield. However, brewers are reluctant with their raw material purchases for the coming year as they cannot foresee the consequences of the ongoing pandemic which will have again a major impact on beer sales.
Most maltsters suffer from depressed beer and hence malt sales but call-offs of existing malt contracts have improved lately. However, the sale of specialty malt continues to be problematic as craft brewers who count for the majority of the sales have not totally recovered from the COVID-19 shutdown and some will even never open again. Some specialty maltsters have temporarily closed down production to adjust supply and demand.
International malt sales have also suffered. The International Grain Council reports a 11 % decline of world malt trade in 2019/20, and forecasts a rebound of 3 % to 7,2 million tons grain equivalent in 2020/21, reported H.M. Gauger earlier this month.
Market observers expect that depressed malting barley prices will cause farmers to sell their excess malting barley to the feed market which could lead to a shorter supply later in the season in case beer sales and malt needs will pick up again.