(Reuters) - Inflation is curbing short-term demand for malt, but demand looks to rebound soon for the beer ingredient made from barley after brewers depleted stocks, France-based producer Malteurop said on Wednesday.
Malteurop is one of three French-owned malt manufacturers, along with Malteries Soufflet and Boortmalt, that are among the largest global suppliers of the product used in beer and whisky. Beer giants like Heineken (AS:HEIN) have reported flagging volumes due to inflation as drinkers balked at price increases.
Malt demand has fallen below the long-term trend of just under 2% annual growth, but sales look to recover soon due to tight supplies, Olivier Hautin, Malteurop's CEO said in an interview. He did not give a timeline.
Hautin was speaking from Mexico where Malteurop opened in summer its first malt plant in the country.
The plant will serve a nearby Heineken brewery as well as others in the Mexican beer industry that Hautin said has relied on imports to meet malt requirements.
The 112 million-euro plant in the northern Mexican state of Chihuahua has annual capacity to produce 120,000 metric tons of malt, raising the group's global capacity to 2.3 million tons.
Malteurop is working with 500 local farmers to produce barley for its Mexican facility, part of an increasing emphasis in the beer sector on sustainable and local supply chains, Hautin said. Most water used in the Mexican malt plant would be recycled.