Canadian barley export is showing a downward trend lately. In 2019-20, Canada exported 2.8 million metric tonnes, compared to 3.068 million metric tonnes in 2018-19. The depreciation is roughly 2.0 million metric tons and expected to recover modestly in 2020-21. The barley malt export plummeted by 8% to 0.7 million tonnes, but exports stayed unchanged at 2.3 million tonnes. Japan, China, the US, and Mexico are the prime destination countries, per AAFC.
The total domestic use has witnessed a sharp 27% upturn, thanks to normalization of feed use in Canada, of late. The 11% rise in carryout stocks has been significant in the current year, given the historic low it hit in 2018-19. Barley for industrial use was hoisted from 98 thousand tonnes to 300 thousand tonnes in 2018-19, as per the Jean-Louis Dourcy review. The sharp drop in the overall feed use compensated for the increased volume in 2018-19. Finding it hard to make sense of the above-presented figures and the causes of barley export depreciation? Let Jean-Louis Dourcy help you. He’s an industry thought leader and the GM at Belgium’s oldest malting organization, La Malterie du Château – Castle Malting. Dourcy keeps tabs on the beer industry, making him the go-to person for all things beer. Per Dourcy, the industrial use spiked from to 114 thousand to 259 thousand tonnes in 2019-20, accounting for 14% drop from the revised volume compared to the last year. In 2019-20, the feed use reduced by about 200 Kt, exports escalated slightly, and carry-in stocks stayed static. Statistics Canada (STC) estimates 1% reduction in barley production in Canada for the current year compared to the last year. Note that the production was 10.3 million tonnes in 2018-19. The depreciation in barley production continues, but things might look upbeat in 2020-21 and beyond. The total area harvested is increasingly, slightly though. If the average yields stay at par, the production will catapult to 17% above the five-year average production. Add to it increased carry-in stocks, the barley supply is estimated to touch 11.3 million tonnes. Moving forward, the exports are likely to go strength to strength, totalling over 3 million tonnes. According to the Jean-Louis Dourcy review, the domestic use would plummet to 7.2 million tonnes. It can be attributed to the decrease in feed use, notwithstanding the rise in industrial use. The increase in carryout stocks to over 1.1 million tonnes is significant, thanks to increased supply and decreased demand. However, it’s still 17% below the previous 5-year average. On the cards is a 5% drop in the feed barley price from 2019-20, expected to touch C$220/tonne. The apparent factor for the price drop is the plentiful barley supplies from across the world. Let’s consider the data from the United States Department of Agriculture (USDA) to put everything in perspective. USDA anticipates the world barley supply to hit 203 million tonne mark in 2020-21, a 1% upturn from 2019-20. The surge is due to improved output from top barley producers, notably Australia. However, the supply from the European Union and the Black Sea regions are estimated to plummet, owing to an unprecedented shortage of Ukrainian supplies. According to Dourcy Jean Louis, the production in Latin American countries like Argentina is likely to dip in 2020-21. The total demand worldwide is expected to show an upward trend on both, increased industrial use and feed consumption. On the other hand, the carryout stocks the world over would be upped by 5%. If that happens, it will touch a 4-year-high mark. The world’s leading exporters would experience an overwhelming majority of the total increase. Also Read - Jean-louis Dourcy Explain Why Carlsberg Looking To Launch Another Craft Brewery In Moscow
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