Russia's biggest brewery, Baltika, announced on September 27th that its first-half net sales rose 16.1 percent to 776.1 million euros ($985.7 million) after factoring in its merger with three smaller companies, according to Reuters. Baltika said its first-half EBITDA profit margin increased by 3.5 percentage points to 31.1 percent.

Baltika said on the Web site of one of its owners, Carlsberg, that its earnings before interest, taxation, depreciation and amortisation in the six months rose 31 percent to 241.7 million euros. It did not provide a net profit figure.

In an internal merger, Baltika is uniting with smaller breweries Pikra, Vena and Yarpivo. The merger, scheduled to be completed by the end of the year, will save $60-80 million in distribution costs.

Baltika, also owned by Scottish&Newcastle, said on Tuesday that the merger, including a restructuring of its distribution system, helped it increase its July-August sales by 16 percent while the market had grown 14 percent.

A stronger than anticipated profit performance in one of Greencore's key divisions, ingredients, has compensated for a continued weakness in EU malt markets, a weakness compounded in the case of Greencore Malt by nearly Euro 4 million of energy price increases, according to details in a trading update issued by the company on September 27th.

Greencore said that despite significant cost pressures, including an energy bill inflated to the tune of €5m, its convenience foods business will deliver annual profit growth of 5pc and that operating profits for the division will be in line with market forecasts of about €68.6m.

"We expect strong second- half trading to compensate for lower profit growth reported in the first half. To date, second-half trading has delivered revenue growth of more than 7pc and operating margin levels that are broadly in line with the prior year," it said.

The second major division, which includes ingredients, agribusiness and related property, is expected to chip in with a further €25.2m in operating profits. This includes the sugar business, which performed ahead of expectations and compensated for a poorer performance by the malt business, where once again the energy bill was a problem, soaring by €4m.

2006 world barley production is estimated by IGC (International Grains Council) to rise to 143 million tonnes (140 mln t in 2005), 1 million tonnes less than forecast in August, IGC posted in its Grain Market Report on September 28th.

Continued drought in Australia resulted in a cut of over 1 million tonnes in the forecast crop, to 6.5 million tonnes. There were also reductions in Europe, where the high protein content has reduced the percentage of malting quality barley.

IGC’s forecast for global barley consumption is unchanged from last month at 148 million tonnes. Feed use of barley in the EU will reach a ten-year high as feed wheat availabilities tighten, and ample supplies will promote more barley feeding in Ukraine.

Projected by IGC barley trade in 2006/07 is unchanged at 17.6 million tonnes, with Saudi Arabia’s feed barley needs to remain large. The forecast of EU shipments has been lowered to reflect relatively high prices and sharply reduced availabilities of malting quality barley. Australia’s barley exports will be limited by its smaller crop, but the export forecasts for Russia and Ukraine are raised from last month, the IGC said.

Barley malting market is deadlocked as farmers refuse sell to the merchants/coops. Single conclusions in 2nd hand regime, H. ABILDSTROEM & Co. ApS commented in its report published on September 21. Malsters gradually accepting lower gradings of barley, giving in on Germination (min 93%), Protein (upto 12.5%) and varieties. Even germinative 2 row spring barley with no variety mentioned is finding buyers. Fully sellers` market and after several attempts to seek a figure, the EU 25 balance sheet with a minus of about 500,000 tonnes 12% protein became fuel on the fire.

The distance to next crop is looking vast. For a while sellers had practically disappeared mainly because of farmerheld longs. Recently sellers are back for minor quantities but at levels 10-12 € higher than 10 days ago and preferably for 2006 delivery. Million € question is: when will farmer commence selling?

The most successful Danish micro breweries now even exporting minor lots to our neighboring countries. Hedegaard Agro made result before taxes of 23.3 mio DKK against 25.4 mio last year. Turnover is up from 843 to 851.6 mio DKK but avian flu hit the departments Rose Poultry and Dan-Hatch.