The most recent estimate of global grain production from the International Grains Council (IGC) shows a net drawdown of stocks as a result of the continuous reduction in output forecasts. The gap between production and consumption was estimated at a 20m tonne (mt) surplus last June but this has been gradually reduced and is now a 2mt production deficit for the 2020/21 marketing year.

Back in June, total grain production was estimated at 2,237mt. Now that figure stands at 2,219mt. Of those tonnes, 767.6mt were to be wheat and this is now put at at 765mt. At its peak, maize production was 1,171.6mt last June, but now this looks more like 1,146mt.

Barley is small by comaprison

Of the total grain, global barley production is a mere 140mt to 160mt. The IGC November estimate was 156.4mt, virtually the same as the previous year at 156.3mt.

Europe (EU plus the former Soviet states) is by far the biggest barley growing region in the world (see Figure 1). Within Europe’s 64.2mt total, the EU is the major player with 54.5mt. Within the EU, the three major players are France, Germany and Spain, with more than 10mt each this year. At these production levels, France is lower than normal, Germany is about normal and Spain is above average.

In the former Soviet states, Russia and Ukraine are the major producers, accounting for 20.5mt and 8.0mt, respectively, of the block total (CIS) of 36.4mt this year. Of the North and Central American production, Canada is the main player with 10.3mt. Turkey and Iran are moderate-sized producers and Australia is expected to account for 11.8mt of the 12.1mt forecast for Oceania this year.

Malting is about 21% of barley

Malting barley is an important segment of global barley production, which is put at 21% of the total, according to the Food and Agriculture Organisation. This equates to just under 33mt going for malting annually. However, the overall trade in malt is much lower and accounts for between 7.2mt and 7.7mt annually, according to a recent report by the IGC.

That IGC report on the world trade in barley malt indicated that the malt market had contracted by 7% last year but this is expected to increase slightly in the 2020-21 marketing year, to 7.3mt of grain equivalent. This forecast assumes that the hospitality trade will be less affected by renewed COVID-19 lockdown measures than the initial one.

The report indicates that shutdowns of malt processing facilities have been largely reversed, according to the brewing industry. It also indicates that a large proportion of the “pub” sales of beer has been offset by increased home consumption. Indeed, it indicates that a number of breweries have announced capacity expansion, and that there is also strong demand in the whiskey distilling sector.

Any expansion in the trade for barley malt is partly driven by demand from Far East Asia.

Demand is also expected in remain solid in North and Central America, while there may also be a rebound in Africa. However, it seems inevitable that malt supply from the key exporters will be more than adequate to meet this demand.

International trade in barley malt

While the quantity of barley used to produce malt is sizeable at 33mt, only about 7.3mt is expected to be traded this year. The EU is a major exporter of barley malt (see Figure 2), with other important exporters being Australia, Canada, Argentina, Uruguay, China and the US. These are the suppliers or the exporters, so who are the buyers?

The main buyers of barley malt are in far east Asia (see Figure 3), and countries such as Japan, Vietnam and Thailand, in particular. Then comes South America, where Brazil is by far the biggest importer. After that comes North and Central America, where Mexico and the US are the biggest importers.

Then we have Africa, where importation is spread across a number of countries, with Nigeria being the biggest at 155,000t.

There has been some change in export trading patterns over the past decade.

The IGC report pointed out that selected exporters such as Argentina, Australia and Canada have become less dominant while the US, China and Uruguay now claim a greater share of the global export trade.

However, the latter three still remain lower than the initial three and this situation seems to be largely levelling off. But all of these countries are insignificant relative to the EU’s dominance but most of them are physically closer to where the market is showing expansion.

In short

  • Overall global grain production is now estimated to be lower than consumption for the 2020/21 marketing year, resulting in a slight reduction in global grain stocks.
  • Barley production is expected to be similar to last season but an increase in stock level is forecast.
  • An estimated 21% of global barley production is used for malt production each year.
  • The EU is by far the biggest exporter of malt in the world.