Growing geographical imbalances

Certain countries are structurally in deficit since they consume beer yet produce little or no barley. That is true of China, which in 2013 consumed approximately 4 million tons of malting barley, yet produced less than 1 million tons. Local policies do not encourage barley production and encourage production of rice, corn, and wheat. Therefore the deficit can only increase, given the growing demand — estimated at 6 million tons 10 years from now.

This situation can also be observed, on a smaller scale, in other countries such as Vietnam, where barley consumption is expected to increase from approximately 500,000 tons today to nearly 1 million tons in 10 years, with local production all but non-existent due to agronomic conditions.

Finally, among the emerging countries, other markets are experiencing strong growth in beer consumption, but setting up a malting-barley production industry there is problematic. Such is the case with India, where barley production and consumption zones are very far removed from one another and where logistics remain insufficient. It is also the case in certain African countries where the growing structures (small farms, subsistence agriculture) do not facilitate production and storage of a technical crop such as malting barley.

At the opposite extreme, other countries are structurally in surplus, producing more barley than they consume. That is true of Australia (with a production of 3.5 Mt of malting barley compared to only 1 million tons being processed) and the European Union (which produces approximately 11 Mt of malting barley yet processes only 9 million tons).

Russia and Ukraine are another case. These two countries are among the world’s largest barley producers, but climatic conditions (drought in Spring and rain at harvest time) are very unfavorable to malting barley. The result is that the zone is an exporter of barley as fodder but an importer of malting barley.

Imbalances can also exist within a single geographical zone. In North America, for example, production zones continue to move toward the Northwest, whereas beer consumption zones are concentrated with population — that is, in the southern, eastern, and western parts of the continent. Therefore the zone is self-sufficient for malting barley, but there are large internal flows, for example from Canada toward Mexico.