South African barley farmers are bracing for a tough market ahead as demand for the grain used to make beer falls and stockpiles grow after a ban on the sale of alcohol was reinstated as the country battles a surge in COVID-19 cases. Unutilised stocks of barley, which is mainly planted for malting purpose in South Africa, stood at around 719,307 tonnes by December, 49% higher than a year ago, according to data from the South African Grain Information Service. Farmers say the ban is further hurting a sector still reeling from effects of drought conditions in 2019. Anheuser-Busch InBev (AB InBev), which uses malting barley in beer making, lowered its mandate for the 2020/2021 season to 380,000 tonnes from 475,000 tonnes in the previous season. This may force farmers to sell excess barley as animal feed which can be between 40 to 50% lower than the price of malting barley, said Abrie Rautenbach, head of ABSA’s AgriBusiness. South African Breweries, part of AB InBev, is challenging the alcohol ban in court.
SOURCE: REUTERS