Rising prices for malting barley and malt

In 2024, from January to December, prices for malted barley increased by 48%, and the cost of malted barley malt increased by 37%. These figures significantly exceed the official inflation rate of 9.5%, which indicates the presence of specific factors affecting the market. Market participants cite a decrease in yields due to adverse weather conditions, an increase in the key rate of the Central Bank of the Russian Federation, which in turn severely limited the availability of borrowed funds, rising prices for fertilizers and fuel, and an increase in transportation costs as the main reason for the increase in barley prices. Additional pressure is exerted by the growing demand caused by a 9.9% year-on-year increase in beer production.The more modest increase in malt prices at this stage is explained by the time lag between the purchase of barley and the sale of malt. Due to this, prices are restrained for a while. However, the malt industry’s dependence on malting barley makes it vulnerable to further price increases. Moreover, market experts believe that the equilibrium point has not yet been reached and the malt price has the potential to increase further.
The long-term stability of the market directly depends on the restoration of yields and the planning of production costs. If these problems remain unresolved, price increases may continue, affecting more and more end users.