Europe: Dry weather leaves brewers with malting barley supply crisis

on 31/05/11 at 9:00 am

Beer

A dry spring in much of Europe has sent malting barley prices shooting upwards – adding to the woes of brewers already under pressure from weak beer demand, according to analysts.

In the UK, one of the four leading European producers along with France, Germany and Denmark, spring barley prices for the coming 2011 harvest have risen from £183 a metric tonne last November to £235 in May.

Brewers spark recent jump

The dry start to the year, in the UK and France especially, has triggered this price hike, creating major uncertainty in the market. Stuart Shand, sales director at agriculture merchants Gleadell, said the market has “exploded” as one or two brewers have finally stepped in realising that “drought conditions were in fact real and ongoing”.

In recent times brewers have been holding off purchases because declining beer demand has made it difficult to predict future needs, HGCA analyst Jack Watts told this publication.

Such last minute buying practices could force some brewers to pay inflated prices in the current uncertain climate. Watts added that it is not just a question of quantity and price – the dry conditions may have compromised quality as well. Most buyers are therefore holding back if they can.

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