Picture: 123RF/JAKUB GODJA
Picture: 123RF/JAKUB GODJA

SA barley farmers are bracing for a tough market ahead as demand for the grain used to make beer falls and stockpiles grow after the ban on the sale of alcohol was reinstated as the country battles a surge in Covid-19 cases.

In late December, the government enforced its third ban on alcohol sales since the outbreak of the coronavirus to alleviate pressure on strained health-care facilities after a rise in infections.

Unused stocks of barley, which is mainly planted for malting purpose in SA, stood at about 719,307 tonnes by December 2020, 49% higher than a year earlier, according to data from the SA Grain Information Service.

Farmers say the ban is further hurting a sector still reeling from the effects of drought conditions in 2019.

“The biggest impact will be on [the upcoming] year’s mandate to supply malt barley for the industry,” said Jose De Kock, chair of Barley Industry Committee, referencing the 2021/2022 season for which plantings are due to start in about April.

“With the carry-over that is already in the pipeline, [farmers] are going to limit the mandate for next year, that is the fear,” he said.

Farmers could plant other crops, but De Kock said this may not be a complete solution with some of them in a crop rotation as part of disease and weed control measures. “You can juggle a bit to the one side or the other side, but you cannot not plant barley,” he said.

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.

“There is the possibility that we will have to reduce the mandate further should the ban continue,” AB InBev’s director of agricultural development in Africa, Josh Hammann, said.

This may force farmers to sell excess barley as animal feed, which can be between 40% and 50% lower than the price of malting barley, said Abrie Rautenbach, head of Absa’s agribusiness.

SAB, part of AB InBev, is challenging the alcohol ban in court. 

Reuters

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