Hamburg, Oct 16 - Germany is facing a shortage of barley for malt because of the poor barley harvest this summer which could hit malt production, the chief executive of the German malt industry association said.
Some German malt producers face cutting production or even going out of business as the industry cannot find enough high quality barley after this summer's disastrous crop, said Michael Lerch of association Deutscher Maelzerbund.
Beer brewers may have to accept lower quality malt, he said. Germany may also have to raise imports of French and Danish spring barley and malt, traders added.
"The position is dramatic," Lerch said. "There is a gap in our supplies of about one million tonnes."
The association has held initial talks with representatives of Germany's brewing industry urging them to accept lower quality malt made from poorer grade animal feed barley which would not normally be used for malt production.
"We have had to explain that brewers may have to make the compromise and accept malt with lower specifications," Lerch said. "This is because the malt industry cannot deliver malt of the normal quality because we cannot get enough barley of sufficient quality."
German malt producers need about 2.2 million tonnes of spring barley each year, he said. But bad weather this summer has cut the country's crop to about one to 1.2 million tonnes from 1.6 million tonnes last year.
Larger volumes of poorer grade barley were available to produce malt which could be used for beer production, he said.
"It is technically possible to use this. German brewers have higher malt specifications than most other European countries. But if they insist on this quality, the malt industry will not be able to produce it."
Higher barley prices are likely to generate 30 to 40 million euros of additional costs this season for Germany's malt industry, he said.
"It is certainly possible that some malt producers will not be able to survive in the coming year," he said.
Grain traders said malting barley is currently being quoted in Germany at between 180 to 200 euros a tonne for October-December delivery.
"This is up by about 50 euros a tonne in the last two months," one trader said. "Alternative supplies are available in France and Denmark, which had relatively good harvests."
"But there are very few sellers currently in the market as they hope prices will rise even further. It is one of the most difficult markets I can remember."