As China Halts Imports, India's Craft Beer Craze May Rescue Aussie Barley

Business Standard As China halts imports, India's craft beer craze may rescue Aussie barley

With India's population growing by 15 million per year, the industry will need to make an additional 2 million hectoliters between 2019-24 -- or 80 Olympic swimming pools worth, Bloomberg Intelligence.

Australian barley growers could soon be raising a glass to India’s swelling cohort of beer drinkers, who are being eyed as a potential market for some of the country’s excess stocks of the grain, after its biggest buyer China all but halted imports this year.

While India’s beer market was only worth about $7.4 billion last year -- a fraction of the U.S.’s $105.4 trillion market, according to Euromonitor research -- the sheer pace of population growth there, coupled with an increasing thirst for craft beer among younger and wealthier cohorts, means it has the potential to grow into one of the world’s largest consumers of the beverage.

Operations at the Great State Ale Works Craft Brewery as India's Taste for Beer Gives Australia’s Barley Growers Hope A brewer tests beer at the Great State Ale Works craft brewery in Pune, on Nov. 27.

“There’s a lot of business interest in the beer industry. There’s a lot of investment coming in slowly,” said Nakul Bhonsle, owner of Great State Aleworks, a microbrewery based in Pune, in India’s west. “As the younger generation grows older, there’s a drastic shift from hard liquor to beer and wine. So that shift will help us.”

With India’s population growing by 15 million per year, the industry will need to make an additional 2 million hectoliters between 2019-24 -- or 80 Olympic swimming pools worth, Bloomberg Intelligence predicts.

Any additional demand from brewers would be a boon for Australian barley prices, which slumped to among the cheapest in the world following China’s decision to apply 80% tariffs as trade tensions between the two countries escalated. Without the China demand, exporters have been forced to price their premium grain at levels similar to lower-quality barley used in animal feed to remain competitive.