The Philippines: Malted Barley Demand Growing Fast
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The Philippine brewing industry relies on malted Barley imports, importing roughly 80,000 tons on average from 2009–19. The quantities of imported malt are variable through this period, with a high of nearly 150,000 tons in 2018 but a low of just under 60,000 tons in 2014. Rice and sometimes corn is used as an adjunct to malted Barley in the brewing process partly to reduce costs and enhance flavors. Comparing estimated beer production and malted Barley imports for 2013–15, there appears to be a discrepancy, where malted Barley imports reduced, though beer production was held constant. High malt prices during this period may encouraged higher use of adjuncts in some years.
Barley is used effectively in feed rations in North America, Europe, Australia, and China. Chinese feed manufacturers understand the relative value and potential of Barley versus corn in the feed rations for pigs and poultry and therefore import Australian, as well as French and Ukrainian, Barley to replace some of the corn rations in their feed formulations. However, while familiarity may create new demand, further use of Barley in animal feed rations in the Philippines (and other South East Asian countries) must be competitive with locally grown corn and imported feed wheat to gain market share.
Production of beer in the Philippines has grown steadily since 2007 increasing from 1,360,000kl to 1,780,000kl in 2017, a 31% increase. This compares with production in many other countries with either stagnating or declining production and puts the Philippines in the group of robust growth markets worldwide. The Philippines, however, still falls well behind it’s South East Asian neighbor, Vietnam, has more than doubled its beer production over the same period.
In 2007, Philippines’ total beer consumption was estimated at 1,342,000kl, or 15l per person annually, and increased to 1,980,000kl in 2017, or 19l per person annually. These per capita amounts are very low by world standards, where, for example Japan (which sits 50th on the world rankings) consumed 40l per person annually in 2017.
Beer in the Philippines is mainly produced by the two large breweries, with one being dominant. San Miguel Corporation has market share of around 90%, and it produces San Miguel Pale Pilsen. The other company, Asia Brewery, only has a market share of about 7%. These two large producers are now being joined by a small but growing number of microbreweries opening up across the nation.
The Philippines’ Barley Import
The Philippines has little or no malting capacity within the country and therefore relies on malt imports to supply its brewing industry. There is also little import of Barley for feed into the Philippines, with total imports ranging from 3,000 to 6,000 tons over the last ten years, Australia is the leading supplier. Given the continued expansion of the feed industry in the Philippines, new demand for Australian Barley may be created if feed manufacturers become more familiar with its use.
Australia has been the supplier of malted Barley, with approximately 44% of the market share over the last years. China is the next highest at 28%, while France provided 17%. A recent trend indicates an increasing reliance on China as the origin for malt imports, providing just over half of the imported malt for 2018.
According to AgFlow data, the country imported 280,000 tons of Barley from Australia last year. In 2020, the Philippines imported Barley worth $3.55 million, becoming the 64th largest importer of Barley in the world. The same year, Barley was the 835th most imported product in the Philippines. The Philippines imports Barley primarily from: Australia ($3.47 million), Singapore ($55.3k), the United States ($12.8k), New Zealand ($10.5k), and South Korea ($903).
Other sources: AEGIC
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