July 19, 2018 / 2:35 PM / a month ago

France to the rescue as drought hits EU barley crop

* German, Polish, UK barley crop damaged by dryness

* Tighter supplies for feed, brewers

* Decent French crop could provide supplies

HAMBURG, July 19 (Reuters) - Drought has seriously damaged barley harvests in north Europe, potentially tightening supplies of animal feed and malt for beer brewing, but a decent crop in France could save the day, experts said on Thursday.

“There are painful crop losses in Germany, Poland, Britain and Scandinavia,” one German trader said. “The volume of animal feed barley will be cut and I think there could be an-EU shortage of about 500,000 tonnes of malting barley.”

“But it looks like France will ride to the rescue with an overall good crop,” he said. “Malt may have to be produced using lower quality winter barley and more EU imports are also likely from South America.”

Germany’s farming association cut its forecast of the country’s 2018 winter barley harvest to 7.3 million tonnes, down 18.8 percent on 2017, with worries about crop quality after drought.

Poland’s winter barley crop is likely to fall about 6 percent on 2017 to around 3.4 million tonnes, said Wojtek Sabaranski of analysts Sparks Polska.

“The market is quite concerned about the size of this year’s malting barley harvest,” Sabaranski said. “Malting barley fields in the central and northern regions of the country are in a very poor shape.”

Many spring barley crops in Britain appear in poor condition following a prolonged period of dryness. Winter barley is less widely grown in Britain.

“Springs (spring barley) are not coping terribly well in quite a lot of the country,” said analyst Peter Collier of Britain’s Agriculture and Horticulture Development Board, adding the picture varies with some crops in reasonable shape.

Quality is also a concern.

“Malting barley is almost at a 50 pound premium to feed barley so it is anticipated that (malting) quality is going to be hard to source,” Collier said.

But France’s barley harvest is showing reasonable results so far, which could put France in a strong position if drought in northern Europe slashes malting barley supplies.

“France could fare quite well in this tight context and malting premiums (prices) have potential to rise further,” one French trader said.

France produces a significant amount of malting barley from winter as well as spring varieties.

Winter barley harvesting is almost over in France, with traders assessing average yields and quality.

The farm ministry forecast France’s total barley crop at 12.1 million tonnes, unchanged on 2017.

But some doubt remains, with analysts Strategie Grains cutting its estimate of the French crop to 11.5 million tonnes from 12.1 million, and some traders even estimating 10.5-11 million tonnes. (Reporting by Michael Hogan, Valerie Parent and Nigel Hunt, editing by Alexandra Hudson)

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