India: Demand for feed and malting barley increases across India

Malt whiskey manufacturers from United Breweries to Barmalt are on a barley procurement spree across Rajasthan and Haryana, The Economic Times reported on April, 13.

With a negligible carryover stock this year, exporters and multinational companies such as Olam and Cargill are also making their presence felt across local markets.

"We see a bumper production this year and prices are to remain stable," said Barmalt India MD Pramil Jindal. He added that prices which were ruling at `1,200 a quintal in February and March have now come down to `950 a quintal. One of the largest malt and malt extract manufacturers in India, the company has a capacity to produce approximately 1.40 lakh tonne of malt a year (lakh = a hundred thousand).

A grain trader of a multinational company said companies were studying the market. "Quota restrictions in Ukraine, which is the largest exporter of barley to the Middle East for camel feed, might ensure an increase in order for Indian traders. Further, we see a push from the domestic market with malting companies making purchases. The prices have touched the bottom and it is safe to enter the market now," he said.

Traders say prices were likely to further fall by `20 to `30 a quintal with augmented supplies by April end. Barley harvesting across Rajasthan, Haryana, Punjab and Madhya Pradesh will continue till May.

At the Chandpol mandi of Jaipur, export broker Girish Khandelwal said enquiries were being made by multinational houses such as Olam India, Cargill and Louis Dreyfus. "On the export front, barley prices are currently ruling at $289 per tonne FOB compared to $275 per tonne FOB a fortnight ago. Orders are coming from Dubai, Muscat, Doha and Vietnam," he said.

Baran-based broker Shagun Tapdiwal said that with no carryover stock compared to 3-3.5 lakh tonne in the previous year, prices will not see a major fluctuation. "If demand from the Middle East for cattle feed goes up and if manufacturing companies start aggressive buying, we may see a slight increase."

In Punjab and Haryana, farmers who have taken up contract farming for United Breweries were likely to get `1,000 per quintal compared to the minimum support price of `780 offered by the Centre, said officials of Punjab State Cooperative Supply and Marketing Federation and Haryana State Cooperative Supply & Marketing Federation. The procurement will begin from 15 April.

On the NCDEX, barley for May delivery declined by 0.55% to `1,202 per quintal whereas barley for June delivery shed by 0.97% to `1,241 per quintal.

13 April, 2011