Breweries import barley at a premium; beer price rise on cards?

You may soon have to shell out more money for a cold one, as Indian breweries are likely to import barley this season to offset the shortfall in domestic production of the cereal.

According to a report in The Economic Times, barley production in India may take a hit, with experts suggesting that domestic production may fall about 1.92 million tonnes from the previous year.

“Looking at the barley crop arrival in the mandis (markets), we expect it to be a less crop. It can be 7-10 percent less. Also, we feel that with prices of maize and millets very high, the cattle feed industry is buying more of barley. This is leading to firm prices,” Pramil Jindal, MD of Barmalt Malting Company told the daily.

Reports suggest that Indian breweries may have to shell out up to 10 percent more for the imported barley compared to the domestic produce.

"On an average, imported barley at the company gate is being quoted at Rs 1,950-2,000 a quintal, while the Indian variety is available at Rs 1,875-1,900 a quintal," said Jindal.

The report added that 60,000 tonnes of barley has already been imported from Argentina and more contracts are in the pipeline.

“Duty-free imports are meant for actual users and imports in such high volumes is only being done by the malting industry,” said a Delhi-based grain trader Rajesh Paharia.

Apart from being an important component in brewing beer, barley is also used for making food supplements such as Bournvita and Horlicks as well as bread and animal fodder.

Major breweries including Barmalt, United Breweries, Glencore, Cofco, Louis Dreyfus among others are currently on a buying spree in barley growing states such as Haryana, Rajasthan and Madhya Pradesh.

However, trade experts suggest that five or six more vessels of 50,000-60,000 tonnes maybe contracted by Indian companies by the next quarter.