The malting barley market was very challenging last year. While we remain optimistic about long-term global whisky sales growth, we are far more cautious about short-term demand. Realistically, that weaker demand is likely to weigh on prices this year, next year, and potentially even beyond.
Last year's grain was stored on-farm well into the winter in many places. At the same time, significant volumes remain in merchant and maltster stores. Quite simply, there is too much grain sitting across the supply chain to put any meaningful upward pressure on prices.
Shifting this grain requires merchants to unlock more demand. And Aberdeen Port now presents an opportunity to do just that – specifically in North African feed markets. This would represent a different outlet from our traditional malting routes and could help relieve some of the current oversupply. But, of course, supplying this market has to work for merchants.
This opportunity has arisen because Aberdeen now benefits from a deep water port. This set-up can now facilitate grain exports to new markets in new destinations. Bigger vessels can now be brought in to ship large volumes of grain at relatively low cost. In practical terms, this opens doors to destinations that were previously harder to access from the North East.
However, the port will only organise vessels if there is clear appetite from the trade. Without firm commitment from merchants, the opportunity will not materialise.
If sentiment is strong and farmers and merchants are keen, a market could potentially be found for grain. The price won't necessarily be very high, but in a congested market, creating movement is valuable in itself. Clearing stores ahead of harvest could ease pressure across the system.
Spring isn't that far away, and planting decisions will have to be made soon. Do you think there will be enough interest from growers and merchants to seriously explore supplying this market?
We will be holding a Combinable Crops meeting on Thursday, 26 February at 6.30pm at Aberdeen Port to explore this opportunity in more detail. This will be an opportunity to hear directly from port representatives, discuss logistics and costs and gauge appetite from across the supply chain. If you think it’s worth exploring this further, or if you are interested in coming along, then get in touch with Lorna Paterson or David Michie at NFU Scotland.
David Michie