Hamburg, Oct 23 - Better times are brewing for the German beer industry after the country's larger barley crop this year, the head of Germany's malt producers association said on Thursday.
Brewers faced tight and expensive supplies of malt in the past year, produced from malting barley, after bad weather sharply cut Germany's 2007 grain harvest.
But this year's malting barley crop is much larger and prices are falling, Michael Lerch, chief executive of the Association of German Malt Producers, said.
The association estimates this year's German harvest of malting barley at 1,555,000 tonnes, up from 1,138,000 tonnes in 2007.
Malting barley prices are now around 180 euros a tonne against 280 euros a tonne offered before the harvest and peaks of 300 euros a tonne earlier in the year.
"The malt market is now returning to normal levels after the tightness following the poor crop in 2007," he said. "Overall we are satisfied with the harvest and the picture is looking considerably better than this time last year."
German malting barley imports were likely to be reduced to a normal level of about 500,000 to 600,000 tonnes.
Last season the import requirement was several hundred thousand tonnes higher but poor harvests in most other European countries meant purchasing supplies abroad was difficult.
Instead, producers had to compromise and use lower grades of barley generally used for animal feed to make malt.
Talks then had to be undertaken with beer brewers to ask them to accept the malt produced.
"I do not think that we will have any need for compromise contracts this year," Lerch said. "The quality of this year's crop is overall reasonably good."
Malt companies were also still selling malt produced with barley bought at higher prices than now, so it would take time before the benefits of the lower prices would be seen, he said.
He said it was too early to say whether beer prices could fall.
"I think it unlikely as malt makes up a relatively small part of the cost of beer," he said.
"When you pay two euros for a beer in a bar you are only paying five cents for the malt."