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IHGC meeting in Paris 
March 2 - 3, 1998 

Place of the meeting:
Hotel Novotel,
8, Place Marguerite-de-Navarre,
F-75001 Paris, France
Tel.  ++ 33 1 42 21 31 31
Fax: ++ 33 1 40 26 05 79

IHGC Web information:
Summary reports
- JTC/EC
- Table
- Technical Commission Meeting

 

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Time table of the meeting: 

Monday,  2nd  March 1998  (13.00)
 
Meeting of the IHGC Economic Commission and the Joint Trade Commission (IHGC/European Hop Merchants’ Association - EHMA)

Monday,  2nd  March 1998  (16.00)

Meeting of the IHGC-Technical Commission

Tuesday, 3rd  March 1998 (9.00 AM)

Meeting of the IHGC Executive Committee

M E M O R A N D U M
Meeting of the Joint Trade Commission IHGC/EUH
2nd March, 1998, Paris - France

Chairmanship: Mr. Frantisek Chvalovsky – President

The meeting of the Joint Trade Commission took place at the same time as the meeting of the Economic Commission of the IHGC.

Participants EUH: Mr. Jaroslav Kares, President – EUH
Mr. Johannes M. Raiser – Germany and
Mr. Josef Grauvogl, Secretary - EUH.

 

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TOPIC 1: Countries‘ reports

The French delegation gave the participants a résumé of the harvest reports from the IHGC member countries. These individual reports were found to be laid out in a very clear, informative manner and therefore very suitable for analysis. The following comments were made on the reports from the individual countries:

Australia: The report showed the status as at December, 1997, the new crop (springtime) has not been included in the figures yet. From the acreage there was seen to be a slight increase. On being questioned, Mr. Raiser explained that according to the information he had, the weather conditions during the course of the new 1998 crop had been atypical and would have negative effects on the size of the crop. According to the information issued the acreage should have been reduced by approx. 25 – 30% so that the 1998 crop should turn out correspondingly smaller. Prices are not known at the moment.
Belgium: Compared with the previous year the acreage has again been reduced by approx. 10%. At the oment it cannot be estimated with certainty whether there will be a change in acreage in the future too; to make a forecast it is conceivable that 40 hectares of hops will be closed down.
Bulgaria: The available figures pertaining to the 1998 forward contracts are not in accord with the figures on the unsold production from the 1997 crop. It is doubtful whether the figures are correct
Czech Republic: It was reported that more areas under hops are being closed down and that the 1998 acreage will probably be around 6,500 hectares. Compared with the figures from previous years it can be seen that the Czech Republic has made an approximately 35% reduction in acreage.
FR Germany: The hop-growers reported that the pool is sold out. The present remaining quantity available is around 1,000 metric cwts. Regarding the reduction in acreage it is estimated that in 1998 a reduction of between 1,500-2,000 hectares can be expected. The reduction in acreage will then take effect quicker, the sooner the EU Commission makes known its decision on retaining the subsidy. It is essential that this decision is made by the end of March, 1998 at the latest. From the forward contract figures for 1998 it can be seen that even with a reduction in acreage there is still a considerable quantity of unsold hops available. How and whether these hops can be marketed, remains unanswered on the part of the growers despite corresponding demand. On hopsters‘ side it was added that also the hops from the 1997 crop should be sold out except for small remaining stocks. It was pointed out that due to sales to the breweries here for 1998 and also 1999, there are large or even very large quantities of stocks. This must be taken into consideration early on during the coming 1998 market and shows how urgently acreage must be reduced.
France: Only a small reduction in acreage is to be expected here.
Poland: Based on a cautious estimate a reduction of around 400 hectares in acreage is to be expected in Poland.
Slovenia: A further reduction in acreage of around 165 hectares down to 2,000 hectares is to be expected. The sales figures for the 1997 crop must be updated by the sales which have taken place in the meantime. The unsold production is just 15%. The last sales contracts were at spot-market prices of somewhat more than 100 DM/metric cwt. 
United Kingdom: It was pointed out that there is a relatively high proportion of still unsold hops from the 1997 crop. The basic attitude of the English growers is that better prices must be awaited. The reduction in acreage in 1998 will possibly be about 15-20%.
USA: It was reported from the USA that there will be a total reduction in acreage of up to approx. 2,600 hectares. This corresponds to a reduction of 15%. However, due to the structure of the American producers no binding statement can be made in this respect.
Ukraine: The forward contract figures will be viewed critically. They are not in accord with the total production in 1997. Probably an error has occurred when putting the figures together.

 

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TOPIC 2: State of the Market and Future of the Hop Industry

President Chvalovsky summed up the result of the crop reports and ascertained that the figures were rather disappointing. Every hop-producing country is definitely aware of the existing situation regarding overproduction. An appeal should be made to all producing countries to observe at all events the figures or forecasts given to reduce acreage in order to avoid a further drop-off in prices. He addressed the request to the hopsters that they show more responsibility when selling to the breweries also bearing in mind that the hop-growers‘ livelihood must be safeguarded.

Mr. Raiser referred to the considerable overproduction which has been known for a long time now. A massive reduction in the world acreage by up to 30% seems to be urgently needed at the present time. This is the best way to achieve the market’s recovery. He put the question to the growers as to whether they are maybe in a position to set up a sort of ”Hop OPEC” with the purpose of controlling the market volume. At the present time this is not possible due to the competitive situation, which can be observed between the individual producing countries.

President Kares stressed the necessity for further cooperation between hop-growers and hopsters in the future. The figures developed by Mr. Feldmann and his colleagues constitute an significant contribution. It would be desirable to have these figures analysed even further (e.g. development of alpha-acid, shift in proportions of aroma/bitter compounds etc.).

When first studying the figures it becomes particularly clear that the forward contract situation tends to be declining. From the figures available there can be seen to be very small amounts of forward contracts even as early as 2001. It is to be feared that the hop market will come under further pressure.

Mr. Norman Batt The present situation has been found to be even worse than it was last year (1996/1997 season). With an eye to the 1998 crop it is not difficult to imagine that there may be an extremely negative market situation again.
It is expected that in 1998 an even greater amount of spot hops and therefore alpha-acid will be available. It is a task for the trade organizations to ”educate” the hop-growers affected in their own countries by pointing out this difficult situation. The growers must be enlightened precisely and comprehensively about the overproduction as well as its negative economic consequences, so that they can draw their conclusions and attain a reduction in acreage.

Mr. Schrag remarked that despite the reduction in acreage to be expected in 1998, probably the same alpha quantity as 1997 will be produced with all the negative consequences resulting from this for the hop market.

Mr. Grauvogl pointed out that the participants have gained their knowledge as experts in the field of hops, but that up to now there has been no sound basic research on the subject of overproduction and future development (e.g. brewing industry’s requirements). In reviewing the whole situation the behaviour of the brewing industry and its future should also be included. A market analysis could/should be drawn up by an independent third party with appropriate perspectives for a period over the next 10 years and then the results of this analysis could be put into effect.

Mr. McEwan-Cargill referred to the free forces in the market and the self-regulation resulting from them. He does not consider it necessary to have basic research carried out by a third party.

Mr. Schrag pointed out that the FRG has taken the first steps necessary to reduce acreage. This was also the result of numerous and various attempts to obtain support in Brussels at the EU Commission. Due to the readiness of the EU Commission to continue to grant the subsidy also for closed-down hop areas one important objective in reducing acreage has been reached.

 

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TOPIC 3: Proposals/Summing up

Mr. Raiser made it clear that based on the present figures available worldwide in effect a total acreage of 20,000 hectares must be cleared in the long run. The present reduction in acreage of altogether approx. 6,000 hectares is far too little and will to a great extent put pressure on the hop market as early as 1998. A definite threat is that the 1998 market will again take a very negative course.

Mr. Schrag explained, that the FRG sees no possibility at the present time to make recommendations to the hop-growers other than to advise them to close down areas under hops (temporary shut-down).

Over the past months in Germany the hop-growers have already been advised not to work any hops in 1998 for which no contract exists.

Mr. Raiser put forward the proposal that certain amounts of hops be taken completely off the market, if necessary, in order to reduce the expected quantity considerably and therefore adjust the hop supply to the brewing industry‘s demands.

Mr. Kares added that an urgent recommendation should be made to all hop-producing countries, even those outside the European Union, that they reduce their hop acreage considerably. Under no circumstances should their hop production be increased. All the hop-producing countries must be urgently warned against this.

Mr. McEwan-Cargill also supported the proposal that the hop producers should only work their hop yards when they have the corresponding forward contracts for the sale of their production.

Mr. Ingwiller posed the question, whether the hop-trade also has additional means of influencing the hop-producing countries outside the European Union and outside the USA. The support of the hop-trade would be useful here, so that at all events there is a reduction in acreage in these producing countries.

Mr. Schrag supplemented his proposal that the brewing industry should also be enlightened as to the existing overproduction. Here it could be specified that no hops should be trained without a contract and maybe when the 1998 crop is ready, no hops should be harvested for which no contract exists. In addition to this the individual producing countries should first work on today’s result of the discussion internally. Then the discussion can be continued at the International Hop Industry Congress in the USA.

At the end of the meeting Mr. Chvalovsky passed the chairmanship of the Joint Trade Commission in turn onto Mr. Jaroslav Kares.

 

End of the Meeting approx. 5 p.m.
Paris, 02.03.1998

Josef Grauvogl
- Secretary -

 


International Hop Growers’ Convention
IHGC - Economic Commission: Paris,, march. 2d ,1998
IHB-Wirtschaftskommission: Paris, den 2 3. 1998
CICH - Comité Economique: Paris, le 2. mars 1998

Country/ Land

Hop acreage (ha) 1996 Hopfenanbaufläche (ha) 1996

Hop production 1996 (Ztr.) Hopfenproduktion 1996 (Ztr.)

ALPHA PROD.

Hop acreage 1997 (ha) Hopfenanbaufläche 1997 (ha)

Production. 1997 (Ztr.)  Produktion. 1997 (Ztr.)

AROMA

ALPHA

TOTAL

NEW-NEUE

AROMA

ALPHA

TOTAL

in 103 kg (= t)

AROMA

ALPHA

TOTAL

NEW-NEUE

AROMA

ALPHA

TOTAL

Australia

84

933

1 017

 

3 360

55 120

58 480

305,2

90

963

1 053

 

1 800

49 100

50 900

Belgium

81

260

341

43

1 901

9 776

11 677

53,5

91

212

303

12,5

3 234

10 422

13 656

Bulgaria

150

355

505

 

2 085

6 215

8300

30,2

105

280

385

 

1 428

4 820

6 248

Czech rep.

9 355

 

9 355

40

202 520

 

202 520

405,0

7 036

 

7 036

430

148 244

 

148 244

FR Germany

12 641

7 226

19 867

1 945

479 899

310 325

790 224

2 914,0

12 874

6 912

19 786

1 594

425 000

255 000

680 000

France

591

75

666

48

19 882

3 005

22 887

37,7

627

63

690

84,5

20 592

2 421

23 013

New Zealand

90

265

355

 

3 373

13 294

16 667

105,0

106

248

354

 

3 881

11 499

15 380

Poland

2 047

453

2 500

99

51 688

16 312

68 000

206,8

1 880

600

2 480

 

45 000

18 500

63 500

Russia

2 440

348

2 788

12

43 542

6 166

49 708

102,4

1 357

340

1 697

 

13 676

3 264

16 940

Slovakia

1 000

 

1 000

 

16 500

 

16 500

33,0

800

 

800

 

16 000

 

16 000

Slovenia

2 142

84

2 226

138

67 890

3 030

70 920

209,0

2 087

78

2 165

 

69 500 

3 500

73 000

Spain  

570

570

363

 

23 803

23 803

88,1

 

518

518

325

 

26 000

26 000

UK - England

1 790

1 211

3 001

279

51 154

45 657

96 811

465,6

1 947

955

2 902

240

53 308

32 265

85 573

Ukraine

3 200

345

3 545

80

25 920

3 150

29 070

56,6

1 500

400

1 900

85

9 200

5 600

14 800

USA

6 287

11 584

17 871

 

181 773

498 353

680 126

3 354,8

6 434

11 090

17 524

 

201 948

477 280

679 228

Yugoslavia

182,4

401,6

584

 

2 918

9 638

12 556

26,2

182,4

401,6

584

 

2 256

9 638

11 894

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IHGC total

42 080,4

24 110,6

66 191

3 048

1 154 405

1 003 844

2 158 249

8 384,1

37 116,4

23 060,6

60 177

2 771

1 015 067

909 309

1 924 376

IHGC 95/96

42 795

25 425

68 220

2 011

1 078 252

973 983

2 052 235

6 963,0

42 080,4

24 110,6

66 191

3 048

1 154 405

1 003 844

2 158 249

Difference. 1996 - 1995 

Difference. 1997 - 1996

Index 96 / 95 (N-1) - (N-2)

- 714,6

- 1 314,4

- 2 029

+ 1 037

+ 76 153

+ 29 861

+ 106 014

+ 1 421,1

- 4 964

- 1 050

- 6 014

- 277

- 139 338

- 94 535

- 233 873

+/- (%)

- 1,6

- 5,5

- 3

+ 51,6

+ 7

+ 3

+ 5

+ 20,4

- 11,8

- 4,4

- 9,1

- 9,1

- 12,1

- 9,4

- 10,8

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Report on the Technical Commission Meeting
Novotel, Paris, France Monday, March 2, 1998

 

1. The Chairman reported briefly on the Prague Technical Commission and advised that a number of favorable comments had been received.
2. For the 1998 Congress in Yakima one definite contribution had been received and accepted. This is a paper from Slovenia discussing the use of hop essential oil analysis coupled with organoleptic evaluations in the determination of hop quality and for varietal identification.

The Chairman was instructed to investigate the following areas for additional papers for the 1998 Congress:
- report on a hop moisture measuring device now being used in the USA
- a report from UK dwarf hop growers on their experiences to date
- reports from US pesticide registration authorities concerning international harmonization of pesticides
- discussion about the experiences of members countries with idling hop fields for several years and then resuming normal production

There was no other business for discussion
 
 

 Dr. Gregory K. Lewis
Chairman - Technical Commission