ABB announced a slight increase in its pool return estimates for 1999/2000. The pool price estimate for schooner malting no 1 barley ranged between A$160.00 and A$165.00 a tonne, up from 1998/99 standard pool prices of A$155.00-A$160.00 a tonne.

The 1999/2000 pool price estimate for feed no 1 barley was A$125.00-A$130.00 a tonne, up from A$113.00-A$118.00. Driving the price trend was growing demand for feed barley in North Africa and the Middle East, whose re-entry to the market in late 1998 had seen feed barley prices climb, Iwaniw said."Higher feed values have narrowed the gap between malting and feed barley prices," he said. "This has made the premium of malting barley over feed thelowest it has been in several years."

The area planted to barley was expected to be reduced in both Australia and Canada this year, he said. Ordinarily this would result in an improvement in world prices, but continuing large European stocks and unnecessarily high EU subsidies would to some extent offset this, he said.

Although the European Commission had recently reduced export subsidies, the combined impact of EC market intervention strategies would continue to protect EU barley growers from world price movements. EU barley plantings therefore did not look like being significantly affected, he said. Iwaniw also said beer consumption in China, the world's largest market for exported malting barley, had stabilised in the face of ongoing financial restraints."It looks stable, but this is after a fall and with very strong financial controls affecting importing companies throughout China," he said. Credit had become a major issue, with Chinese buyers requiring deferred payment up to 180 days to ease cashflow difficulties. The issuing of letters of credit by banks had also become very difficult, with all purchases now made on a hand-to-mouth basis. The board had been establishing more direct linkages with end-users and meeting stringent quality standards, enabling it to make sales to numerous Chinese malters so far this year. The board markets barley grown in Victoria and South Australia.