Canada Taps China Barley Demand As U. S. Imports Sag

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U. S. barley imports from Canada have plunged 62 per cent to 179,000 tonnes, after American farmers produced a big, high-quality crop in 2009.

China’s thirst for beer has driven up its barley imports from Canada by 86 per cent, but weaker U. S. demand more than offsets those gains.

From August through January, China has replaced the United States as Canada’s top barley export market by importing nearly 208,000 tonnes, according to Statistics Canada.

The surge reflects China’s steadily rising beer consumption over the past decade due to improving incomes, said Bob Cuthbert, senior manager for barley at the Canadian Wheat Board. Quality concerns about last year’s barley crops in China and Australia directed much of that growing demand to Canada.

“It’s given us a chance to really increase our market share to China and our crops the last two years have been really good quality,” he said. “The overall demand, I think, is sustainable and will grow steadily.”

Overall Chinese malting barley imports peaked around 2.2 million tonnes in the mid-2000s before slipping to 1.2 million tonnes last year due to high prices. The Wheat Board projects China will import 1.6 million to 1.7 million tonnes this year.

China has limited potential for increasing its domestic barley acreage because growing areas are far from the big coastal malting plants, Cuthbert said. A limited amount of arable land also means that China prioritizes acres for food grains like rice, wheat and beans.

Canada is the world’s top malting barley exporter, mainly through the Wheat Board’s marketing monopoly on Western Canadian wheat and barley. China is the top malting barley importer.

China imports only malting barley from Canada, used mainly in brewing beer, not lower-quality barley for animal feed.

Low freight rates have also made Canadian barley more competitive in China, but European barley has a greater edge because of its sagging euro, Cuthbert said.

Despite China’s higher demand, Canada’s overall barley export volume was down nearly seven per cent through the first half of Canada’s crop year because of sharply lower U. S. imports.

U. S. barley imports from Canada have plunged 62 per cent to 179,000 tonnes, after American farmers produced a big, high-quality crop in 2009, said Steve Edwardson, executive director of the North Dakota Barley Council.

As a result, U. S. maltsters, who convert barley into malt for use in brewing, look well-supplied for the next 12-18 months, Edwardson said.

Demand for lower-quality barley for use as livestock feed is also down because of big supplies of feed rival corn, he said.

Japan has doubled its Canadian barley imports through the first half of the year, buying nearly 150,000 tonnes. The higher imports are due to strong demand for barley food products, alcohol and barley tea, Cuthbert said.

The Wheat Board expects flat Canadian barley production this year due mainly to weak feed barley prices.

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