AT a laboratory in downtown Winnipeg, Peter Watts samples a golden pale ale, admiring the silky foam top and smooth, slightly grain-tinged taste.

A new variety of barley grown in Canada’s Prairies helped flavor this beer, and brewers anticipate that the kernels will one day end up in shipments to meet China’s increasing thirst for premium ales and lagers.

“We saw a real uptick in the last couple of years” in China’s demand, said Watts, managing director of the Canadian Malting Barley Technical Center, a research facility funded by some of the nation’s malting firms, exporters, brewers and farmers. “We think that’s because they’re producing more premium beer.”

As brewers target discerning drinkers, the center is helping to fuel research of new malt-barley varieties that produce a richer mouthfeel, color and flavor than lower-quality grain.

Canada, the second-largest malt-barley exporter to China, is trying to gain a bigger slice of the burgeoning market from Australia, the top shipper.

China is the world’s largest beer market, and consumers are increasingly shifting to premium and foreign brews from mass-market brands amid rising incomes. The market share of premium lager in the five years ended 2017 more than doubled, according to data from Passport.

Canada’s barley has higher protein than crops from nations including Australia. That quality helps in fermentation to give the final product more body and foam retention. Acreage in the North American nation jumped 13 percent in 2018, and output is poised to climb to 8.2 million metric tons, government data show. Planting had declined 30 percent in the past decade as farmers opted for more-profitable crops such as lentils and peas.

Adverse weather that delayed barley harvests in parts of the Prairies, reduced the supply of quality crops suitable to be turned into malt. Exports to China are still expected to top 1 million tons, the second-highest ever, Watts said.

Malt-barley shipments to China reached a record 1.4 million tons in 2017, surpassing the amount used in the domestic market for the first time, he said.

Demand remains strong amid tight supplies as global barley stockpiles are poised to tumble to a 35-year low after dry conditions cut production from Europe to Australia, boosting costs for brewers and distillers.

The shortfall has pushed up the cost of feed barley in places including Germany by more than 30 percent since April and spot prices in Saskatchewan gained as much as 10 percent this year.

Firm prices may spur farmers to plant additional acres in 2019, said Jerry Klassen, a manager of Canadian operations and trading at Gap SA Grains & Produits in Winnipeg. (SD-Agencies)