Preparing for the International Market: Trade in Malt and Malting Barley

The Canadian malting industry is small, but with significant export markets. However, the varieties of Canadian malting barley traditionally grown, 6-rowed, blue aleurone, have limited the export market, since brewers require consistent malt types to produce consistent beer, and mich of the world uses 2-rowed white aleurone varieties. However, Canadian farmers ahve begun to grow 2-rowed, blue aleurone varieties, for which there is greater international demand. A high yielding 2-rowed or 6-rowed white aleurone variety might also expand Canadian malt and malting barley markets. Another factor affecting the Canadian export markets could be the higher protein levels in Canadian barley. A relatively small and protected domestic market, with an oligopolistic market structure at both the malting and brewing industry levels, coupled with extensive regulation of the input and output markets by the Canadian Wheat Board (CWB) and provincial liquor boards, has both hindered and helped the domestic malting industry. The opening up of the Canadian market to be more liberalized trade through the Free Trade Agreement or other means could provide opportunities for Canadian maltsters, but largely throught the restructuring it may improse on the domestic brewing and malting industries. The potential of the international market for growth will be a function of rising incoems and population in areas such as Asian and Latin America. Intense price competition from subsidized European and American barley is a negative factor for Canadian exports. However, the ability of the CWB and Canadian maltsters to develop markets for their malting barley and malt. with its distinctive characteristics is also important. The extent to which Canadian malting barley or more imporantly, malt, is a differentiated product on the world market, and cost factors will determine the future of the Canadian malting barley and malt imdustries.