“There is a great chance that malting barley prices [and hence malt prices] will increase substantially over the next months,” predicts Holger M. Gauger in his latest market report that was published today.
During the pandemic many EU maltsters have slowed down malt production to adjust to smaller call-offs by brewers. With vaccination in many countries are now increasing, it is hoped for that the worst of the pandemic will soon be over and pubs, bars and restaurants can can reopen to get life back to normal.
This will not only help to boost beer consumption but will also have the effect that breweries need to fill distribution channels again which have run dry during the pandemic.
“If the hoped for demand explosion happens in late spring/early summer, there is neither the malting capacity nor sufficient old crop malting barley to accomodate such demand,” says Gauger.
“Brewers malt stocks are close to zero, anyway. In any case, the industry will enter the new season without the usual carry-over stocks, the barley crop 2021 must provide the malt for the next 12 or better 15 months,” he says.
“Provided the pandemic is under control and beer consumption goes back to normal, malt supplies will remain tight all season. There is also a great chance that malting barley prices will increase substantially over the next months, in sympathy with bullish world grain markets, with a larger feed barley demand and a rather small crop of malting barley in the EU,” he concludes.