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E-Malt.com Newsletter 33a
August 10 - August 12, 2009
Open!
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Quote of the week

" I am a firm believer in the people. If given the truth, they can be depended upon to meet any national crisis. The great point is to bring them the real facts, and beer."
Abraham Lincoln
E-Malt.com recommends:


Currency Rates
Base Currency: Euro, EUR
on 12-August-2009

1 EUR = 1.4149 USD
1 EUR = 0.8585 GBP
1 EUR = 1.5485 CAD
1 EUR = 1.6971 AUD
1 EUR = 136.595 JPY
1 EUR = 2.6206 BRL
1 EUR = 45.5117 RUB
1 EUR = 9.6851 CNY
Base Currency: US Dollar
on 12-August-2009

1 USD = 0.7068 EUR
1 USD = 0.6067 GBP
1 USD = 1.0944 CAD
1 USD = 1.1993 AUD
1 USD = 96.5385 JPY
1 USD = 1.8521 BRL
1 USD = 32.1655 RUB
1 USD = 6.845 CNY
Currency Rates Chart

Equities of the Largest Breweries

Equities of the Largest Breweries

Average Market Prices Change trend

August 12, 2009

Type Crop 2008 Crop 2009
2rs Barley nq   EUR105.0-109.0 2.73%
6rw Barley nq   EUR104.0-108.0 1.85%
2rs Malt EUR324.0-328.0 EUR307.50-311.50 1.28%
6rw Malt EUR318.5-322.5 EUR305.5-309.5 0.81%
Feed Barley nq    EUR94.0-98.0

Note: Just click on the price link and you will be led to our Market Price History. Average barley market prices are French and are estimated on FOB Creil basis. Average Malt Prices are theoretical and based FOB Antwerp being estimated on French malting barley. The changes are compared to last Newsletter's prices. Arrows indicate the direction of the change.


Top Industry News

World: Nothing is stopping us from the right acquisition – SABMiller CEO ...Click here
Belgium: AB InBev forecast to post a 3% increase in EBITDA yoy ...Click here
Japan: Suntory reports a 28% dip in H1 net profit amid merger talks with Kirin Breweries ...Click here
Mexico: Mexican beer exports fall in the second quarter but not so much as in the first ...Click here
World: Analysts modest in beer sales forecasts so far ...Click here
Japan: July beer shipments reduced by bad weather ...Click here
Russia: Beer production will drop by up to 50% if the excise tax on beer is tripled – Union of Russian Brewers ...Click here
World: Malt orders blocked for a while as brewers reduce stocks to unprecedented levels ...Click here
EU: Malt markets pressured by the abundant barley crop ...Click here
United States & Canada: Decreasing barley acreage and production may make it a specialty crop only for food and malting - analysts ...Click here
Canada: Barley area and production to decrease in 2009-10 ...Click here
United Kingdom: Barley crop of more than 2 mln tons expected to leave an export surplus of up to 800,000 tons ...Click here


More News


United Kingdom: Premium beer category has been falling long before recession - report ...More Info
Japan: Asahi’s total beer sales decline in July by 11.4% ...More Info
Zambia: SABMiller to invest $100 mln to double production at its Zambian operations ...More Info
EU: Barley harvest almost completed in most south eastern countries ...More Info
Serbia: Beer production drops by 12.5% in January - July ...More Info
Uganda: Nile Breweries doubles production capacity ...More Info
Canada & Australia: Viterra’s CEO has little doubt ABB Grain shareholders will agree to takeover ...More Info
United States: Anheuser-Busch tests world’s lightest beer in 15 select markets in the US ...More Info
Russia & Norway: Baltika beer now available in Norway ...More Info
China: China Resources Snow Breweries appoint new Chairman ...More Info
United States: Agricultural research institute hopes to revive the hop-growing tradition in Northern New York ...More Info
United States: Tibetan beer to be available nationwide by the end of the year ...More Info
Jamaica: Red Stripe beer family introduces new member ...More Info
Uganda: Nile Breweries launch their first domestically produced premium beer ...More Info
Ireland: Winter barley almost in, spring barley crop slow to date ...More Info
Go to our news database with more than 15579 articles.
Today with the possibility to be translated in 7 different languages!
DE FR SP IT PT RU CN

Brewery News

World: Nothing is stopping us from the right acquisition – SABMiller CEO

SABMiller Plc Chief Executive Officer Graham Mackay said he’s prepared to make acquisitions and forecast the beer industry will recover from the global recession at a sluggish pace, Bloomberg reported on August, 12.

The company has sufficient investor support to do a deal and enough room to take on debt, Mackay said, though it will refuse to pay a premium price given the distressed market.

“Nothing is stopping us from the right acquisition,” the CEO of the London-based brewer said. “There is money available. Even if we had to raise capital, we think our shareholders would agree with it if it was the right acquisition.”

Mackay declined to comment on how much SABMiller would be willing to spend. He said the brewer would consider buying assets in both developed countries and emerging markets, where the company gets 85 percent of its earnings and it has historically been “easier to make the numbers work” for deals.

The CEO avoided taking the world’s second-largest brewer into the round of mergers that reshaped the industry during more bullish times last year, passing on Scottish & Newcastle Plc, which was eventually broken up by Heineken NV and Carlsberg A/S for more than $15 billion. SAB’s stock was ...More Info


Belgium: AB InBev forecast to post a 3% increase in EBITDA yoy

World’s largest brewer Anheuser-Busch InBev is this week expected to showcase the wisdom of last year's $52 billion purchase of Anheuser, with benefits of cost-cutting at the U.S. unit more than offsetting flagging sales and exchange-rate losses, Dow Jones communicated on August, 11.

Analysts expect AB InBev, the world's largest brewer by sales based in Leuven, Belgium, to report earnings before interest, taxes, depreciation and amortization, adjusted for one-time items, of $3.22 billion in the second quarter, a 3% increase over the year-earlier result of $3.12 billion. The figure is closely watched by the markets because it strips out fluctuating tax rates, interest expenses and one-off costs, focusing on the company's operational performance.

The rise in core earnings is expected despite flagging beer consumption across the globe due to the weak global economy and weaker currencies in several of its key markets compared to the U.S. dollar.

Aggressive cost-cutting at AB InBev's U.S. operations as a result of the Anheuser takeover is expected to expand margins there, offsetting profit declines in every other AB InBev market.

AB InBev's executive team, led by Carlos Brito, has pledged $1 billion of cost savings from the merger in 2009 alone, and $2.25 billion in 2008-2010. They've ...More Info


Japan: Suntory reports a 28% dip in H1 net profit amid merger talks with Kirin Breweries

Japanese brewer Suntory Holdings Ltd. said that its net profit in the first half fell 28% from a year earlier, hurt by the yen's strength and higher raw materials costs, Dow Jones reported on August, 7.

The company posted a group net profit of Y8.16 billion, down from Y11.35 billion in the year-earlier period.

The decline is due to the strong yen hurting profits from its overseas business, the privately held food and beverage maker said, adding that higher costs of raw materials and packaging also pressured its bottom line.

The results came after Suntory and Kirin Holdings Co. said last month that they had entered merger talks, in a move that could create a formidable competitor to the world's leading brewer Anheuser-Busch InBev N.V.

"This is a good thing, so we'd like to proceed (with the merger talks) quickly." said Suntory's executive officer Kozo Chiji, but he added that nothing had been decided on the merger.

If the deal goes through, it would create a new food and beverage giant with combined sales of Y3.8 trillion as of 2008 figures, or about $40.9 billion, including about Y1.2 trillion in beer sales.

Suntory's interim sales grew 1.0% to Y731.00 billion in the ...More Info


Mexico: Mexican beer exports fall in the second quarter but not so much as in the first

Mexico’s total beer exports amounted to 5.59 mln hl in the second quarter of 2009, which represents a 3.4% decline as compared to the second quarter of 2008, El Semanario reported on August, 7.

Though the second quarter export volume represents one of the worst performances in 9 years, the result is still better than the 4.8% drop seen in the first quarter, it is reported.

In the June – April quarter of this year, Grupo Modelo’s export volumes shrunk by 4.6%. In contrast, Femsa’s beer exports increased by 2.4%, although its sales in Brazil dropped by 8.4%.

“The export volume contracted by 4.6% but the decrease was significantly smaller than that of the first quarter. We see a recovery in several regions and we are preparing for the summer season,” commented José Parés, Grupo Modelo’s Vice President, International Markets.

According to industry experts, Femsa lost 2.24% of the Mexican beer market to Grupo Modelo in the second quarter. At present, Modelo holds 59% of the domestic market whereas Femsa’s production accounts for the remaining 41%.


World: Analysts modest in beer sales forecasts so far

Most analysts do not foresee larger beer sales for 2010 yet, sources communicated recently.

There is, of course, some hope that the worst of the economic crisis is behind us, but the recovery will be slow, most experts believe.

However, most brewers must have used their old stocks and purchases by now so that their purchase volumes for 2010 should return to regular levels.

The Drinktec fair of Munich in September is seen as a possible turning point. And the long-term outlook has been unchanged since years: all food and also malt and beer will see a constantly rising demand. But as we have seen once again, the economy and markets do not follow a straight line.


Japan: July beer shipments reduced by bad weather

Beer shipments by Japan’s five major manufacturers hit a record low in July due largely to the cool weather, The Mainichi Daily News cited figures released by the companies on August, 12.

The five beer makers' shipments of beer, happoshu, or low-malt beer, and third-category beer posted a year-on-year decline of 11.8 percent last month to 46.18 million cases. One case represents 20 x 633-milliliter bottles.

It was the lowest figure since the industry began keeping statistics using the current method in 1992.

This is the first time that beer shipments have suffered a double-digit year-on-year decline since they fell 18.6 percent in January following a surge in demand a year earlier prior to price hikes.

In addition to the cool weather this year, the decrease in July is also attributable to a rebound from a sharp increase a year earlier as a result of sweltering weather at the time.

Beer makers are desperate to increase sales in August to make up for the decrease last month. However, they are pessimistic about their prospects because there have been fewer fine days this month than normal.

Shipments of the cheapest third-category beer increased 5.2 percent from the corresponding month of last year, while that of regular beer ...More Info


Russia: Beer production will drop by up to 50% if the excise tax on beer is tripled – Union of Russian Brewers

A government initiative to triple the excise tax on beer would be disastrous for the brewing industry, resulting in job losses and crippling smaller producers, members of the Union of Russian Brewers were quoted as saying by the Moscow Times on August, 12.

“The plan being considered by the government will cause production to drop by 40 to 50 percent, and thousands of people will lose their jobs,” said Daniil Briman, vice president of Baltika, the country’s largest brewer. “I don’t think anyone in the government seriously considered the social consequences of this initiative.”

The government proposed filling holes in its 2010 budget, which is now forecast to run a 9.3 percent deficit, with 96 billion rubles ($3 billion) of additional revenues from increased excise taxes, including 63.8 billion rubles from excise duties on beer.

The Finance Ministry plans to increase the tax by 200 percent, from 3.3 rubles per liter to 9 rubles per liter, although it has not said when the new tax would take effect. A draft of the budget was approved last month.

The industry currently employs about 50,000 people, and more than 500,000 work in adjoining sectors, according to data provided by the union.

Union officials did not say how ...More Info


Malt News

World: Malt orders blocked for a while as brewers reduce stocks to unprecedented levels

Early 2008 forecasts were still optimistic, but the crisis ended a long beer boom, experts advised in a recent research note.

While a lot of new malthouse projects were halted, a few new factories were built, providing for additional capacity, which is not needed time being.

Brewers had overly large malt stocks and large purchases in their books, which alone would have blocked new malt orders for a while; but brewers reduced their stocks to unprecedented levels, because some of them were squeezed financially by their acquisitions of other brewing companies, most others by the reduced availability and high cost of bank credits.

Lower stock markets had reduced the book value of all major brewery groups, and lower beer sales threatened their P/L and cash flow, experts reported.


EU: Malt markets pressured by the abundant barley crop

With feed barley prices largely at intervention levels (support price) the weight of the sheer size of this year’s EU barley crop has really pressured the malt markets in the last couple of weeks, eFarming reported on August, 9.

Malt prices reached new lows with increased farmer selling and slack demand.

While some weather risks remain across Germany and northern parts of Europe, the quality problems that were expected a couple of weeks ago when the harvest was being delayed by rain, have not eventuated. The favourable yields combined with limited downgrading have lead to an expansion in the expected surplus of malting barley this year in Europe, with estimates as high as 3 mln metric tons.

The higher than expected malt barley surplus may require some malt to be sold into the feed sector and this knowledge has pushed the malt barley premium back into 10 Euros, industry sources report.


Barley News

United States & Canada: Decreasing barley acreage and production may make it a specialty crop only for food and malting - analysts

US barley crop estimates range from 4.1 to 4.4 mln tons this year, analysts communicated earlier this month.

Canada’s barley production 2009-10 is forecast to reach just 8.7 mln tons.

Barley experts in the US and Canada point to the steady erosion of barley acreage over the past years. In the late 1980’s the combined acreage was 10 mln ha. This year, 5 mln ha were planted, and a further reduction to 4 mln ha is anticipated for the years to come.

Barley yields 3.2 tons/HA on average are expected in North America.

Usage of feed barley will drop fast and deep in the US, experts forecast. There is a risk that barley will become a specialty crop for food and malting, with an obvious supply risk in case of crop failures.

Barley is already a specialty crop in South America and South Africa, a similar situation in North America would leave only the EU, CIS and Australia as feed barley suppliers to the world.


Canada: Barley area and production to decrease in 2009-10

For 2009-10, Canada’s barley seeded area decreased slightly to the lowest level since 1967, Agriculture and Agri-Food Canada (AAFC) reported on August, 7.

Abandonment is expected to rise as more farmers than usual graze or cut their crops for green feed. Production is expected to fall by about 26% to 8.7 mln tons as dry growing conditions cut yields.

Canada’s total barley supply is forecast to fall by 19% to 10.84 mln tons. Domestic feed use is projected to decrease while exports are unchanged at 2.3 mln tons. Carry-out stocks are forecast to fall by 29% to 1.5 mln tons.

The off-board price for barley is forecast to fall slightly while the PRO for malting barley (Sel CW 2-Row) is C$245/t.


United Kingdom: Barley crop of more than 2 mln tons expected to leave an export surplus of up to 800,000 tons

Winter barley harvest in the U.K. advances slowly from south to north, frequently interrupted by rains. The harvest of spring barley has not started yet, industry sources report.

English analysts estimate receivals of up to 600,000 tons of winter barley and 2 mln tons of spring barley, leaving an export surplus of up to 800,000 tons. It is essential, though, that the weather improves to allow combines in the fields, experts comment.

Scientific Digest

Measurement of Barley Grain Rheology for the Quality Selection of Breeding Material

B.G. Osborne, G.P. Fox, A.M. Kelly and R.J. Henry

Abstract:
J. Inst. Brew. 113(2), 135–141, 2007 The Single-Kernel Characterization System (SKCS) 4100 was used to test whole grain barley from a replicated breeding trial across two environments and two seasons. Hardness was calculated from a crush response profile of the resistance to shell and endosperm crushing as a function of time. This rheological data recovered was averaged over 300 grains for each sample then partitioned into genetic, environmental and error components in order to calculate the genetic components and heritability. The results demonstrated a high level of genetic variance for all rheological parameters at all sites and years. In addition, the heritability was also moderate to high (68% to 90%) for the SKCS hardness and the rheological parameters that had been previously shown to provide information about endosperm modification during malting. Since the rheological information is recovered for individual grains within a sample, the SKCS 4100 may provide a new tool for screening breeding material for uniformity of quality. Key words: Barley, grain rheology, malting quality, plant breeding, SKCS Load full article, 7 pages, 715 kb , PDF file

Barley Prices

French Malting Barley Prices. Nominal prices
EURO = USD 1.4149 August 12, 2009 
 Crop year   2008   2009 
 Parity   FOB Creil   FOB Creil 
 Position   July 2008   July 2009 
Type   Variety  EURO  USD  EURO  USD 
2RS  Scarlett  nq nq 109.00  154.50 
2RS  Prestige  nq nq 108.00  153.00 
2RS  Cellar  nq nq 107.00  151.50 
2RS  Sebastien  nq nq 106.00  150.00 
2RS  Tipple  nq nq 106.00  150.00 
2RS  Henley  nq nq 106.00  150.00 
6RW  Esterel   nq nq 106.00  150.00 

French Feed Barley Prices. Nominal prices
EURO = USD 1.4149 August 12,2009
Crop year 2009
Parity FOB Creil
Position July 2009
Type EURO USD
Feed Barley 96.00 135.83


Theoretical Malt Prices

EURO = USD 1.4149 August 12,2009 
Crop year  2008 
Parity  FOB Antwerp 
Position  Aug 2009 - Sept 2009 
Conditioning  Bulk   In bags  Bulk containers Bags, containers
Malting barley variety  EURO USD EURO  USD EURO USD  EURO  USD
2RS  Scarlett  328.50  465.00  360.00  509.00  352.00  498.00  366.50  518.50 
2RS  Prestige  327.50  463.00  358.50  507.50  351.00  496.50  365.00  516.50 
2RS  Cellar  326.00  461.50  357.50  505.50  349.50  494.50  364.00  514.50 
2RS  Sebastien  325.00  459.50  356.00  503.50  348.50  493.00  362.50  513.00 
2RS  Tipple  325.00  459.50  356.00  503.50  348.50  493.00  362.50  513.00 
2RS  Henley  325.00  459.50  356.00  503.50  348.50  493.00  362.50  513.00 
2RS   Average price  326.00  461.50  357.50  505.50  349.50  494.50  364.00  514.50 
6RW  Esterel   320.50  454.50  352.50  498.50  344.50  487.50  359.00  508.00 
Asia Malt 70/30  324.50  459.50  356.00  503.50  348.00  492.50  362.50  512.50 
**  Asia Malt 50/50  323.50  458.00  355.00  502.00  347.50  491.00  361.50  511.50 


EURO = USD 1.4149 August 12, 2009
Crop year 2009
Parity FOB Antwerp
Position Oct 2009 - Sep 2010
Conditioning Bulk In bags Bulk containers Bags, containers
Malting barley variety EURO USD EURO USD EURO USD EURO USD
2RS  Scarlett  312.00  441.50  343.50  485.50  335.50  475.00  350.00  495.00 
2RS  Prestige  311.00  440.00  342.00  484.00  334.50  473.00  348.50  493.50 
2RS  Cellar  309.50  438.00  341.00  482.50  333.50  471.50  347.50  491.50 
2RS  Sebastien  308.50  436.50  339.50  480.50  332.00  469.50  346.00  489.50 
2RS  Tipple  308.50  436.50  339.50  480.50  332.00  469.50  346.00  489.50 
2RS  Henley  308.50  436.50  339.50  480.50  332.00  469.50  346.00  489.50 
2RS   Average price  309.50  438.00  341.00  482.50  333.50  471.50  347.50  491.50 
6RW  Esterel   307.50  436.50  339.50  480.50  332.00  469.50  346.00  489.50 
Asia Malt 70/30  309.50  437.50  340.50  481.50  333.00  471.00  347.00  491.00 
**  Asia Malt 50/50  309.00  437.50  340.50  481.50  332.50  470.50  347.00  490.50 

NB: Prices published are theoretical malt prices including financial cost, THC (for bulk and bags container) and all administrative costs. This prices may fluctuate according to the quantity per delivery and technical specifications.

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

Prices Evolution

Prices evolution

Table of the Week

Japan Brewers Market Share, January-June 2009

Company %
Kirin Brewery Co Ltd 37.5
Asahi Breweries Ltd 36.9
Suntory Holdings 12.7
Sapporo Breweries Ltd 12.1
Orion Breweries 0.8
Graph of the Week



These Days in Business History
August 10
1500 Diego Diaz discovers Madagascar
1961 England applies for membership in the European Common Market
1981 Coca-Cola Bottling Co agrees to pump $34 million into black business
1988 UN estimates Asia's population hit 3 billion

August 11
1909 SOS 1st used by an American ship, Arapahoe, off Cape Hatteras, NC
1950 Steve Wozniak, future co-inventor of the Apple computer, is born.
1992 The world's largest shopping center, the US$650-million, 4.2-million-square-foot Mall of America, opens in Bloomington, Minnesota.

August 12
1856 Anthony Fass patents accordion
1877 Thomas Edison invents Edisonphone, a sound recording device
1960 Echo 1, 1st communications satellite, is launched
Agenda