Canberra, Jan. 17 - The eastern Australian malting barley market is tight, driven by strong demand from China, where it is used to make beer, The Land farm weekly newspaper reported Thursday, citing a GrainCorp Ltd. market report.
Indeed, despite the annual Australian harvest having only recently finished, "we still believe there will be a shortage of grain on the east coast," marketing and logistics concern GrainCorp said.
The shortage of grain will continue to be driven by the aggressive pace of container exports to China, it said.
Australia could export more than 500,000 metric tons of malt barley in containers this year, "an extraordinary amount of grain in a drought year," GrainCorp said.
GrainCorp said world malting barley prices could drop A$50/ton from July onwards from around A$380 now as supply from northern hemisphere crops becomes more certain.
It isn't clear how much malting barley was produced from the Australian crop harvested late in 2007 or how much was classified feed grade.
Total national barley production was estimated at 5.55 million tons, up from an actual harvest of 3.72 million tons from the crop harvested late in 2006, but both numbers are well down from a longer term annual average of 7.97 million tons, according to the government's Australian Bureau of Agricultural and Resource Economics, or Abare.
Of the latest crop, Abare estimated production in Western Australia at 2.03 million tons and production in South Australia at 1.55 million tons, suggesting almost 2.0 million tons were produced in the three eastern states.
Production from the east coast is mostly consumed domestically, and the production estimate falls below the average total Australian barley consumption of 2.62 million tons a year in the five years ended 2006-07, Abare reported.