European Union malting barley exporters are starting to wine and dine customers for the all-important booming beer market of China.
They’ve started to buff up a tarnished reputation for inconsistent quality.
Some of the top Chinese importers spent two months in Europe this past year as guests of the industry, said Michael Brophy of the Canadian Wheat Board.
And the market development work is starting to pay off, he said.
The EU has sold a couple of shipments of varietal-pure malting barley to China in the past year, and there’s possibly more on the way.
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In 1997-98, the EU increased malting barley shipments by a whopping 75 percent to 700,000 tonnes, from 400,000 tonnes the previous year.
“That’s something that’s a little bit of a worry for all of us,” Brophy told researchers, producers, maltsters and brewers at the triennial barley improvement meeting held here last week.
“We cannot rest on our laurels.”
EU exporters can also sell at a significantly lower price because of subsidies, he said.
This past year, Australia was hit hardest by the EU efforts, exporting only 1.3 million tonnes of barley, down from two million tonnes in 1996-97.
Canada sold 100,000 tonnes more, rising to 1.5 million tonnes.
That’s because of strong demand for six-row barley from the United States, where the wheat board sold about 800,000 tonnes in the past year, said Brophy.
He noted the gap between two-row and six-row prices has narrowed considerably. In 1996-97, two-row malting barley was worth $34 a tonne more. In 1997-98, the difference narrowed to $20 per tonne. In pool return outlooks so far this year, it has dropped to $15 per tonne.
American maltsters want to make sure Canadian growers keep planting six-row varieties, said Brophy, so they’ve offered strong prices.
By 2008, Brophy expects the world malting barley market to increase about 15 percent to 4.6 million tonnes.
The wheat board predicts the EU will grab more market share, rising to four percent from three percent. Australian market share will drop to 39 percent from 42 percent.
Brophy said Canada should hold on to its current market share of 34 percent, meaning the wheat board will be able to sell 1.6 million tonnes compared to the current 1.4 to 1.5 million tonnes.
While prairie farmers grow nine million tonnes of malting barley varieties, Brophy noted only two to 2.5 million tonnes are selected for malting.
If Canada had more varieties that could withstand weather and meet customer demand, increasing selection to three million tonnes, then Canada could increase its market share, he said.
Erin Armstrong, who works with ConAgra-owned maltsters, said the industry needs a “portfolio” of varieties, including European types, to accommodate all customers.
Bryan Harvey, a breeder at the University of Saskatchewan, noted it usually takes about 15 years from the time a cross is made until it is commercially available.
“We better not sit on our butts or we’ll get our butts kicked right through the chair,” Harvey said.
