The industry amended construction plans for new malting factories. Analysts commented that new factories usually go together with closures of old facilities, therefore the net increases will be less than the figures shown below: EU 315,000 tonnes net, Russia 300,000 tonnes, South America 140 tonnes, possibly 230,000 tonnes, Australia 180,000 tonnes, China (rough estimate) 1 Million tonnes. All this will not yet lead to an overcapacity, assuming that the good beer sales will continue.

Russia and Ukraine talk of an import deficit of 3 – 500,000 tonnes together. A hypothetical European balance shows a large deficit altogether:
-- EU 300 – 350,000 tonnes
-- Russia/Ukraine 300 – 500,000 tonnes
-- Balkans/Turkey/N.Africa 100,000 tonnes
TOTAL 700 – 950,000 tonnes

Imports from overseas would give a welcome relief, but crops in Australia and Argentina are not harvested yet, and in any case FOB prices and ocean freight will result in CIF levels well above US$ 400,- per ton.

Barley markets are very tight because of low carry–over stocks from the crop of 2006, poor 2007 crops in the EU, Russia, Ukraine, government actions and withholding of barley from markets, particularly by farmers.

The EU has a small crop, virtually no carry-over from last year, no intervention stocks. On basis of a production of 56.5 Million tonnes and a feed use of 37 million tonnes (3 Million tonnes less than last year) the EU can export about 3.0 – 3.5 Million tonnes to world markets. But it is quite possible that the feed use will shrink further, because Brazilian maize and sorghum, soymeal and manioc calculate better in feed mixes. Exports of around 5 Million tonnes are thinkable, and exporters booked already 1.02 Million tonnes of licences in the first two months of the grain year.

Russia is considering imposing limits on barley exports because of the rise in grain prices on world markets, Grain Union President Arkady Zlochevsky told Interfax News Agency, September 4.

"It is possible to limit exports. The Agriculture Ministry has formed a special working group, which is holding the relevant consultations," he said.

No specific decisions have yet been made, he said.

"It would be inexpedient to limit exports during harvesting, and we shall see what happens when the harvest is over," he added.

The possibility of grain interventions, which are inevitably accompanied with an export duty, is also under consideration, he said.

"Export duties on certain types of grain, primarily barley, may be imposed before the interventions," Zlochevsky said.

Russia exported 150,000 tonnes of barley this July compared with 100,000 tonnes a year before.
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US weather conditions have also been generally conducive for a good crop. But also the US has suffered from strong rain and hail storms. In early July, a short but severe hail storm hit the Northern Idaho growing region resulting in estimated crop losses of approx. 50% on several 100 hectares, Joh. Barth & Sohn GmbH & Co. KG commented in its Hop Market Telegram of August 2007.

Prolonged rains in Oregon in the middle of August caused the collapse of more than 100 ha of hop trellis. The estimated losses from these storms are likely to exceed 1 million lbs (450 mt) of hops. The estimate of the US crop based the official USDA acreage survey and visual appearance is 27.850 mt compared to 26.166 mt in 2006 and 24.001 mt in 2005.