With disappointing malting barley crop results in North America (inside.beer, 23.9.2021) and Europe (inside.beer, 05.09.2021), the world faces severe problems in the supply of malt. Sellers of malting barley are currently absent from markets which creates an upward pressure for malt prices which have partly increased by more than EUR 50 per metric ton compared to last year.
Especially brewers waiting for depressed prices after the crop, see themselves trapped with the alternative to agree to a much higher and most probably not budgeted price level of their main ingredient or to bet on a reduced price level early next year. However, since beer consumption has resumed to normal levels after easing of the pandemic and most maltsters started with reduced inventory levels into the new season, availability of malt could be reduced next year. Maltsters located in top export locations like Antwerp or Hamburg already report that they are nearly sold out for next year.
Still, there is a lot of demand for malt for delivery next year, as brewers started late to cover their needs in view of rising barley and hence malt prices. “The EU barley/malt/beer situation is precarious. […] Guesses range from 20 to 50 % of the malt demand, which must still be bought,” writes Holger M. Gauger is his newest market report. “Maltsters in areas of barley deficits are expected to shut down part of their capacities during this crop year,” he adds and repeats “If nothing works, shutdowns of maltings and independent breweries could be the consequence.”
However, experience shows that the market is usually flexible enough to adapt to the needs and as in previous years, there will be no maltster left without enough barley and no brewer left without malt. But brewers are well advised not interpret this sentence as an all-clear sign. Maltsters will partly have to accept feed barley with a lower quality for malting in order to make up for the short-fall in malting barley and brewers will have to adapt their malt specifications or to pay an extra premium to receive malt in the used standard quality.