Australian company based in Adelaide, ABB Grain Ltd., the world's biggest malting barley exporter, said prices for the grain might fall 4.3 % more than it forecasted in March because bigger European and Canadian crops would add to growing world supplies. The European Union pegged its barley crop at 50.5 million tonnes, a 5.2 % increase from a year ago, ABB Grain said in a newsletter to farmers. Canada’s production is expected to more than double to 13 million tonnes this year.

Lower barley prices would cut the cost of malt, used by Foster's Group, Tsingtao Brewery and other brewers, to make beer. Australian prices last year rose to a record after the nation's worst drought in 100 years slashed supplies. ABB Grain supplies buyers in 30 countries, including Tsingtao.

"The increased supply expected to be available around the world this season will cause prices to come down from the historically high prices witnessed in Australia as a result of the drought," said the newsletter, which was filed with the Australian Stock Exchange.

Shares of ABB Grain, which has a monopoly on South Australian barley exports, gained 4c to $3.40 yesterday. Farmers in South Australia, the nation's biggest barley-producing state, might see prices for the grain fall by as much as 40 per cent next harvest, ABB Grain said.

03 July, 2003