Barley growers will get more surety if malting barley heads to India

The export price for malting grain held up well at $367 a tonne during the second quarter of 2020

In a move that could give the surety that local malting Barley growers are seeking, the Australian Export Grains Innovation Centre (AEGIC) is engaging closely with Indian brewers and maltsters for our barley to enter the Indian market.

These talks come at a time when we expect a barley harvest of 11 million tonnes, including stock feed, 25% above last year and the highest since season 2016–17.

Favourable seasonal conditions saw growers plant 4.4 million/ha across major growing regions, particularly in New South Wales where a 3-year drought ended.

With increasing domestic production and decreasing domestic demand this is expected to result in a significant surplus of grain around Australia available for export.

The export price for malting grain did hold up well at $367 a tonne during the second quarter of 2020, but downward pressure is expected going forward.

Australian barley was effectively priced out of the Chinese market when tariffs were imposed in May 2020, exports of barley to China effectively ceased at that time.

However, overall exports of barley remained stable, as a result of an increase in exports to Japan, Qatar and Thailand.

And further opportunities are expected to open in other markets, including India.

AEGIC’s Barley Markets Manager Mary Raynes said it was important for Australian barley growers to have access to a diversity of markets to reduce reliance on a single dominant buyer.

“We are recommending that the Australian industry, supported by government, should identify alternative market opportunities,” she said.

Indian maltsters and brewers are keen to access Australian malting barley – shown here is AEGIC’s Mary Raynes (fourth from left) during an India market insight visit

More than 30 members of the Indian brewing and malting industry took part in an online seminar, hosted by AEGIC and Austrade, communicating the quality, safety and reliability of Australian malting barley.

The seminar was a collaborative effort, with participation from AEGIC, Barley Australia, Grain Trade Australia, Grains Industry Market Access Forum and the Australian Government.

“By 2030, the size of the Indian malting barley market is likely to be between 450,000 and 650,000 tonnes,” AEGIC’s Mary Raynes reveals.

“The Australian barley industry is working together to ensure Australia is well-placed to capture a strong share of this market.”

India has not been a malting barley market option for Australia for 10 years due to a technical phytosanitary restriction.

The Australian grains industry is working together with the Australian Government and Indian Government to work through technical issues and allow market access.

Behind the scenes, AEGIC has been engaging with Indian brewers and maltsters to help provide a pathway for Australian malting barley to enter the Indian market.

The pressure will be on to move the Barley mountain of 11 million tonnes expected from the 2020/21 harvest

AEGIC Barley Markets Manager Mary Raynes said there was a healthy and growing thirst for Australian malting barley in the Indian malting and brewing industry.

“Our visits to India during 2019 were very valuable, firstly to engage with Indian malting and brewing industry, and secondly to increase the Australian industry’s understanding of what India wants from Australian malting barley,” she said.

“Indian maltsters and brewers are really keen for the opportunity to access Australian malting barley, and are very eager to engage with us and provide their feedback on their preferred malting barley quality requirements.

This work will involve continued technical engagement to assist Indian maltsters and brewers in understanding the benefits of using Australian barley.

The recent Australian malting barley seminar where these issues where discussed was opened by Australia’s Minister for Trade, Tourism and Investment Simon Birmingham.

Ms Raynes gave an overview of the Australian barley industry, followed by Barley Australia’s Megan Sheehy who spoke about how Australia adds value for customers through the malt barley accreditation process.

Pat O’Shannassy, CEO of Grain Trade Australia, described Australia’s grain quality assurance system.

John Southwell, Australian High Commission Counsellor (Agriculture), gave an overview of India’s importing requirements.

Tony Russell, Executive Manager of GIMAF, hosted a dynamic and highly-engaged Q and A session.

And while AEGIC will keep working in India to capitalise on the groundwork already laid, it will need to maintain and grow its presence in other important malting markets.