China is likely to purchase malting barley on the world market soon, German grain trading house Toepfer International said. "Demand is expected from China in the near term," it said in a market report. "Demand from China is expected to concentrate on malting barley of lower quality from Australia and Canada plus European brewing barley." In the European Union, old crop malting barley is in over supply, it said. This could have an impact on the new crop as farmers in France and Germany were now deciding what spring grains to plant.

The EU's new wheat export subsidy programme has failed to support EU wheat prices, it said.

Subsidy awards of up to six euros ($7.84) a tonne have until now "simply be used for previously completed business", the report said.

"Without significantly higher refunds (subsidies), further volumes cannot be sold on world markets," it said.

Feed barley prices have risen recently because of separate EU export subsidies, but were again on the defensive because of the small tonnages actually awarded subsidies by Brussels recently, it said.

Generally high feed barley prices meant animal feed makers were using barley only when absolutely necessary.

EU maize prices were low and not expected to recover in coming weeks, partly because of EU approval for imports from third countries at reduced customs levies into Spain and Portugal.

Copyright Reuters, 2005