Amid the ongoing war-like situation between Russia and Ukraine is likely to affect the beer lovers in India as the prices may rise due to an impact on rates and supplies of barley, which is the key ingredient in alcoholic beverages.
Russia and Ukraine, two of the world's leading producers of barley, have been at war with each other, which could lead to a worldwide shortage of barley. If the crisis escalates further, global barley prices could spike.
Russia is the largest producer of barley. The annual production of barley here is around 18 million tons. Meanwhile, Ukraine is the fourth largest producer of barley and produces about 9.5 million tons of barley. Barley production in India is around 16 to 17 lakh tonnes.
According to Motilal Oswal, Barley accounts for 30 per cent of raw material consumption, while about 18 per cent of the world's barley is exported from Ukraine. About 90 per cent of the world's malt production comes from barley. Alcoholic beverages are made from malt. Many soft drink companies buy large quantities of barley in February-March.
Ankur Jain, chief executive of beer brand Bira 91 told the Economic Times the ongoing Russia-Ukraine crisis will impact global barley prices, which have already escalated. However, this will be short to medium term.
He also stated that it will depend on the companies whether they increase prices immediately and also on the state governments, which play a decisive role in setting alcohol prices.
Already, the Russia-Ukraine conflict has led to vodka paying the price as several states in the US and Canada are boycotting Russian-made and Russian-branded spirits.
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