Demand from distilleries strengthens barley prices

Demand from the distilleries and malt industries is likely to pull up the barley market from the bear grip. According to the traders, the grain commodity is getting support from the rising rates of other grains such as maize, jowar, bajra and guarseed.

In the major mandis of Rajasthan (the dominant state in barley production), the spot rates are trading at around Rs 880 a quintal, which, upon adding other expenses, is available at Rs 930 a quintal. A fortnight back barley was trading at around Rs 800 a quintal.

Out of the total output, around 70 per cent goes to the malt industries which use it for beer making. The rest is used mostly as cattle feed. Major malt industries are located in and around the National Capital Territory (Delhi) in Haryana, Uttar Pradesh and Rajasthan.

Suresh Vashistha, a Srimadhopur-based (Rajasthan) barley trader, said, “Presently, demand is coming from the malt industries in the North. Distillation process is at its peak during this time. It is less likely that prices of barley will come down.”

Besides Rajasthan, Haryana, Punjab, Uttar Pradesh and Madhya Pradesh are the other states which produce barley.

The factories of major companies like UB, Barmalt, The Malt and Imperial Malt are based in the North and reports suggest that they are intensifying their procurement.

This season, since winter did not remain for long with temperature rising, demand for beer did not rise much and so was the impact on the malt. Resultant impact was seen on the barley market which went into the slump.

According to Abhishek Agarwal, a Jaipur-based trader, barley market may touch the mark of Rs 1000 a quintal.

“The prices have jumped by around Rs 50 a quintal as demand has set in from the domestic market,” he added.

However, from the export market fresh queries are not being made so far. Traders said that Ukraine and Uzbekistan (the main competitors of India in barley production) are available at cheaper rates. West Asia is the major export market for barley.

Another factor, which may contribute in rise of barley prices is the higher rates of molasses from the sugarcane industry. “This is expected to strengthen the demand for malt which will support barley market,” said Vashistha.