Bumper barley crop helps brewers, but not drinkers (IHT)

Reuters
Thursday, October 30, 2008
HAMBURG: A bumper barley crop has caused a sharp fall in prices for brewing malt and, while breweries are benefiting, beer drinkers will have little to cheer, analysts said Wednesday.
The European Union harvest of spring barley, which is used to make malt, rose by two million tons this summer after poor weather cut the 2007 crop.
As a result, malting barley prices have tumbled, cutting costs for beer makers. In Germany, malting barley is quoted around Euros160, or $207, a ton, compared with about €300 a ton before the harvest this summer.
"This price reduction provides a certain amount of relief on brewers' costs and could be positive for earnings," said Reiner Klinz at the consultancy KPMG, said. "But a beer retail price cut is not to be expected." He said brewers already had swallowed higher prices for raw materials, energy, glass and logistics, which had not been passed to consumers, and the commodity price reduction would help to reduce pressure on the sector.
The brewing giant SABMiller this month warned of an uncertain year ahead, despite the group's decision to raise prices to offset higher commodity costs and other input costs. Although prices for barley, aluminum and glass had fallen, the company said it would not see a big effect in the current year ending in March 2009 because of the company's forward hedging policy.








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