Canada: Strong demand for malt barley

Barley producers in western Canada are hoping they can produce a crop that brings high quality this year, as demand for malt barley is very strong, Menafn.com reported on August, 10.

“Demand is excellent,” said Rod Green of Central Ag Marketing in Airdrie, Alberta. “I expect to see demand to continue to rise, and with very, very tight forecast carryover levels, the projection for prices is good as well.”

Proof of tighter supplies was found in the August 4 supply and demand report from Ag Canada. The government agency lowered its estimate for 2011/12 (Jul/Aug) end of year stocks to 400,000 metric tons, from 500,000 in its July estimate. End of year stocks for 2010/11 were 1 mln metric tons. Green said that stocks worldwide were also on the decline, and that has brought prices to high levels, historically speaking.

Green said once the crop begins to come off the field, traders and producers will get a better feel for the market.

“Until you’ve seen samples you can’t really tell what the quality is going to be like, but all indications are that the quality should be good,” he said. “However, at this time last year it looked like we were going to have a good crop as well, but then the rain came and quality was sharply reduced.”

Another factor that will determine where the price of malt barley goes is how the crop ends up faring in Australia, Green said.

“Australia has seen a lot of drought the last couples of years. This year, they have had some moisture, and their crop is in the ground, so their prospects are better than they’ve seen in a few years,” Green said.

12 August, 2011