Base Currency: Euro, EUR on 06-August-2004 1 EUR = 1.2062 USD 1 EUR = 0.6613 GBP 1 EUR = 1.5901 CAD 1 EUR = 1.7134 AUD 1 EUR = 134.76 JPY 1 EUR = 3.7030 BRL 1 EUR = 35.221 RUB	Base Currency: US Dollar on 06-August-2004 1 USD = 0.8293 EUR 1 USD = 0.5482 GBP 1 USD = 1.3183 CAD 1 USD = 1.4205 AUD 1 USD = 111.74 JPY 1 USD = 3.07 BRL 1 USD = 29.2 RUB
EUR/USD Chart

Chile's largest brewer CCU reported on Wednesday, August 4, a sharp improvement in its second-quarter earnings compared with a year earlier due to higher sales volumes and prices despite increased financial expenses. CCU trimmed its net loss in the April-June period to $0.1 million from $1.5 million a year earlier. Stronger sales growth in soft drinks and beer in Chile and Argentina plus growth in the Chilean wine segment boosted CCU's revenue by 8.3 percent to $132.1 million. Operating profit -- earnings before interest, taxes, amortization and non-cash financial items -- soared 274.7 % despite a slight increase in operating costs. "During this period, the Chilean and Argentine beer businesses -- as well as soft drinks, mineral water and nectars -- had a very positive performance," CCU said in a report. The company, controlled by a holding company owned by Chile's Quinenco and Dutch brewer Heineken NV, sells beer in Chile and Argentina and also produces soft drinks, mineral water, wine, juice, liquor and candy. The gains were partly offset by a decrease in financial income caused by lower interest rates, greater debt and a depreciation of the Chilean peso. Earlier on Wednesday, CCU said its January-June net profit plunged 48.7 percent against a year earlier to 16.460 billion pesos due to the absence of the gain generated in the first quarter of last year from the sale of Croatian assets. CCU previously said its overall sales volume rose 4.4 % in the first first six months of the year and its second-quarter volumes were up 3.4 percent...more info

Japan: Asahi Breweries Ltd., Japan's top brewer, posted an 87 % jump in first-half profit to its highest ever on Friday, August 6 on cost cuts that offset a drop in beer sales, and it raised its full-year forecast. The brewer, known for its "Super Dry" beer, posted a consolidated net profit of 15.46 billion yen ($138 million) for the January-June period, up from 8.25 billion yen a year earlier, on sales of 648.11 billion yen. Its first-half net, operating and recurring profits were the highest in the company's history. It now expects a 28 billion yen net profit for the full year, up 7.7 percent from its previous forecast and also a new record. The company said it would pay a 15 yen dividend for the year to December, up from an earlier forecast of 13 yen, raising its dividend yield to 1.3 percent. Last month Asahi announced a 3.4 % drop in its beer sales during the first half against a year earlier. Alternative alcoholic drinks such as Sapporo Holdings Ltd.'s low-cost, beer-like "Draft One" and those based on shochu, a distilled alcohol made from raw materials like sweet potatoes, have gained in popularity in Japan. Asahi has added more low-malt beers, or happoshu, to its line-up and sales in this sector increased 7.1 percent in the period, but sales of beer and happoshu combined dropped 0.6 percent. Happoshu is much cheaper than regular beer because its raw materials are taxed less. Against that, sales of shochu-based drinks and canned cocktails jumped 27 percent. "It is a fact that the beer market is shrinking," Asahi Managing Director Yoshihiro Goto told a news conference. "We are going to cut costs to be efficient in the market, but hopefully sales will grow too via the introduction of products that suit customers' tastes...more info

Russia: The Associated Press Beer ads would be banned for most of the day on television and their content strictly limited under a measure passed Thursday by the State Duma. The measure, which now goes to the Federation Council for widely expected approval before becoming law, puts tight restrictions on advertising on one of the most booming segments of the consumer economy and could sharply reduce broadcasters' revenue. It could also severely undermine brewers' sponsorship of sports events. The measure bans all beer ads on radio and television between 7 a.m. and 10 p.m. In other hours, the ads must conform to content restrictions, including not using images of people or animals, or using animated cartoons. In addition, the ads must not "create the impression that using beer has significance for reaching social or sporting success," Itar-Tass reported. Beer's popularity has soared in recent years and local breweries have rushed to expand operations to meet demand. Beer is widely consumed both in bars and by pedestrians and subway riders. Brewers also have become financially crucial to the country's sports, sponsoring an array of teams and tournaments. Now "it will be unprofitable for sponsors to render assistance to sports events," an official of the Union of Russian Brewers told Itar-Tass.

China: The Danish brewery group Carlsberg A/S announced on August 5 that the company has signed a contract with Lanzhou Huanghe Brewery (LHB) to establish four subsidiaries. LHB has been operating three breweries and holds a 36 percent market share in Gansu Province in Western China. In details, Lanzhou Huanghe Enterprises Co., Ltd., the parent company of LHB, agreed to invest beer brewery assets and facilities valued at CNY 150 million (US$18.1 million) to set four subsidiaries in Lanzhou City, Tianshui City, and Jiuquan City and Qinghai Province respectively, cooperated with Carlsberggroup and the Danish Industrialization Fund for Developing Countries (IFU) that will jointly invest CNY 150 million in the four joint ventures. The Chinese investor and foreign investors will hold a 50 percent stake respectively in the four joint ventures that are scheduled to reach a combined annual output of 300,000 tons after the first phase construction finished.

Brazil: The Belgian brewer Interbrew is to seek shareholder approval for its merger with the Latin American beer maker AmBev in an extraordinary shareholders meeting at the end of August. “It’s a vote on closing the deal,” spokesman Axel Gietz said. The deal, which will create the world’s largest brewer by volume, was announced in March. AmBev, Brazil's largest brewer called on 28 July 2004 an extraordinary shareholders meeting for 27 August. The meeting will discuss several items, including approving the company’s pending merger with the Labatt Holding unit of Interbrew. In a statement, AmBev said that other agenda items would include modifying the company's authorized limit for increasing capital to 70 billion shares from the current 45 billion. The meeting will be held at the company’s headquarters in Sao Paulo, Brazil.

Malt News

In July Heineken concluded malt purchases for their European breweries. The Continental EU breweries' cover for 2005 is virtually finished. Export business was reported to Russia, Japan and Central Africa. There are inquiries in the market from South Africa and Southeast Asia. Especially Asia and Latin America still have to buy a large part of their demand for next year. It is feared that Russia will buy less malt than in past years, as several new maltings are operational now or will come on stream during the crop year.

Barley News

Development of new frost tolerant Australian malting and feed barley varieties looks promising and should significantly lower the risk and cost of frost damage. Frost tolerant traits have been discovered in a diverse collection of barley lines from other countries, prompting the South Australian Barley Improvement Program to undertake an aggressive breeding strategy to incorporate frost tolerance into commercial barley varieties, Ezigrain posted on August 6. Several Japanese varieties have recorded particularly low rates of frost induced sterility compared with Australian commercial varieties. Haruna Nijo and Amagi Nijo, for example, had frost induced sterility at rates of 4.5 per cent and 5.4 per cent respectively, compared with the Australian malting variety Schooner at 79.1 %. As the more frost tolerant varieties are poorly adapted to Australian frost-prone production areas, frost tolerance must be incorporated in commercially relevant germplasm. Genetic control of frost tolerance has now been characterised by University of Adelaide researchers, allowing breeders to 'fast track' the incorporation of frost genes into Australian germplasm. The first potential new varieties are on track to enter preliminary field evaluation next season. The Crop Doctor is GRDC Managing Director, Peter Reading.

“We cannot be sure that the EU Commission will not grant export restitutions for feed barley destination later in the grain year, although the WTO agreement to dismantle subsidies in the future makes such a decision difficult,” market analysts have recently posted. Their problem will be the threatening large barley surplus. It is, however, fairly safe to say that there will be no export refunds for malt and for barley to those countries that import malting barley. EU malting barley quotes of crop 2004 are not competitive in the world except in captive markets: Two-row spring barley FOB France or Denmark US$ 155- US$ 160 FOB U.K. ports US$ 150 - US$ 152.

Germany: 30 – 40 % of the spring crop is harvested by now. Favorable dry weather and light winds have enabled farmers to advance combining rapidly. The Southwest is practically finished, analysts said; screenings are between 85 and 95 %, proteins well below 11 %. As the combines are moving further East and into the higher altitudes, proteins may average 11 % but the overall picture still is very good, especially as the yields are well over expectations (5 – 6mt/ha). First cuts in Lower Saxony, Saxony and Thuringia look promising as well. Prices dropped to about EUR 125per ton, ex harvest, fca malting factories.

Theoretical malt prices.

* - 70/30 = 70% Average two Rows Spring and 30% Six Rows Winter
** - 50/50 = 50% Average two Rows Spring and 50% Six Rows Winter

Theoretical malt prices for crop 2003 are not quoted this time.

Malting barley prices. French barley prices.

Nominal prices.

EURO = USD 1.2062 August 06, 2004
Crop year		2003		2004
Parity		FOB Creil		FOB Creil
Position		July 2003		July 2004
Type	Variety	EURO	USD	EURO	USD
2RS	Scarlett	nq	nq	116.00	140.00
2RS	Prestige	nq	nq	115.00	139.00
2RS	Cellar	nq	nq	115.50	139.50
2RS	Aspen	nq	nq	114.50	138.50
2RS	Optic	nq	nq	114.50	138.50
2RS	Astoria	nq	nq	114.00	137.50
2RS	Cork	nq	nq	114.00	137.50
6RW	Esterel	nq	nq	103.00	124.50

nq - Not quoted

Prices for Danish and UK malting barley are available on site www.e-malt.com/MarketPrices

French Malting Barley Price Evolution

	Maximum average price* for 2RS Barley: 148.50 EUR/tonne - in November 2002
	Minimum average price* for 2RS Barley: 110.79 EUR/tonne - in July 2004
	Maximum average price* for 6RW Barley: 140.00 EUR/tonne - in December 2003
	Minimum average price* for 6RW Barley: 105.00 EUR/tonne - in July 2004
*	without increment

Graph of the week

Agenda

August 2004:
Great British Beer Festival;
Worcester Beer and Cider Festival;
BeerTek China Beer and Brewing Technology Exhibition;
Peterborough Beer Festival 2004;
FOODWORLD Food and Beverage Exhibition;
TecnoBebida Latin America International Exhibition of Technologies for the Beverage Industry;

September 2004:
6th BELGIAN BEER WEEKEND;
China Brew 2004 / China Beverage 2004;
International Brewery and Soft Drinks Industry Exhibition;
FOOD & BEVERAGE PROCESSING & PACKAGING INDONESIA 2004;
Pivoindustria International Beer Industry Exhibition;
National Beer Wholesalers Show 2004;
PAN ASIAN FOOD & BEVERAGE TRADE SHOW 2004;
Barley Malt Quality Evaluation Short Course;
EUROMALT BARLEY SEMINAR 2004;
bevex Beverage Trade Fair;
InterBev 2004;
YUGOSLAVIA INTERNATIONAL FAIR OF FOOD & BEVERAGES 2004;
BevExpo 2004;
Great American Beer Festival;

October 2004:
Great American Beer Festival;
bevex Beverage Trade Fair. Germany;
Great Welsh Beer & Cider Festival;
ST. PETERSBURG FOOD SALON 2004;
Beer Fair. Spain;
Expo Bebidas Beverage Exhibition. Mexico;
EXPOALIMENTOS Y BEBIDAS 2004. Panama;
Fall Eastern PA Breweriana;
Knoxville Brewer's Jam - A Memorial to Tom Rutledge;
INTERPRODTECH Food and Beverages Processing Exhibition. Russia;
Alko and Drinks Show Alcoholic Beverages and Non-alcoholic Drinks Exhibition. Russia;
WORLD FOOD KAZAKHSTAN 2004;
PAN ASIAN FOOD & BEVERAGE TRADE SHOW 2004. Canada;

More events are available on site e-malt.com