The International Grains Council and the Food Aid Committee held their regular sessions on 13 June and 15 June 2006, respectively. The IGC Grains Conference took place during the same week.

Members of the International Grains Council (IGC), under the chairmanship of Mr Russell Mildon (European Commission), examined the global grain market situation and the outlook for 2006/07. The total grains harvest was expected to be lower than in 2005, but consumption was set to rise to a new record, almost entirely due to fast-rising industrial use of grain, particularly for ethanol. As a result, carry-over stocks of grain, having risen in 2004/05 following a record US maize (corn) crop, are expected to fall for the second successive year. At this stage, only a moderate rise in trade in grain was foreseen in 2006/07, mainly due to increases in wheat and maize shipments.

Wheat production was set to decline, with crops in some northern hemisphere exporting countries, notably Russia, Ukraine and the United States, likely to be reduced, while India’s harvest had turned out smaller than anticipated. Although world wheat consumption would likely dip as a result of a cut in feed use, carry-over stocks in 2006/07 were forecast to fall. However, supplies were expected to be adequate in relation to import needs in 2006/07, with the trade total lifted by India’s efforts to rebuild stocks.

With respect to coarse grains, the Council noted that maize output would likely be similar to last year’s, although remaining below the 2004 record. While prospects in the United States had improved recently, production there was forecast to fall. Strong demand for industrial uses was expected to lift global maize consumption to a new record, with use for ethanol in the US set to rise by 15m. tons, to 55m. A recovery in poultry production after recent avian influenza outbreaks in Pacific Asia is likely to boost feed maize demand, contributing to a somewhat higher level of world trade, with US exports expected to reach an 11-year peak. World carry-over stocks of maize in 2006/07 are forecast to dip, mainly because of the forecast fall in the United States.

The delegate from Japan made a presentation setting out the country’s latest grain policy developments, especially with regard to wheat and barley. The Council examined progress with the Secretariat’s economic work programme, in particular the response to the Secretariat’s questionnaire to members on its information services. It was agreed that, as a key part of its 2006/07 work programme, the Secretariat should further expand its information on rice and oilseeds. Work would continue on several other topics, including wheat flour production, industrial uses of grain, notably biofuels, and factors potentially affecting grain demand and trade such as the avian influenza outbreaks. Under the agenda item dealing with the Council’s membership, the Executive Director
outlined the latest position regarding the recruitment of new members.

The Council elected Mr Mohamed Elaref Soliman, Minister Plenipotentiary, Embassy of the Arab Republic of Egypt, London as Chairman for 2006/07. The Vice-Chairman will be Ms Judith St. George, designate Minister (Commercial-Economic), Canadian High Commission, London. The Council was pleased to accept the kind invitation of the Government of Egypt to hold its next Session in Sharm El Sheikh, Egypt on 6 December 2006. A special grains conference would be organised for the following day.

Immediately following the Council Session members attended a Round Table discussion on ethanol. A panel of industry and other experts from China, Japan, the European Community and the United States exchanged views on recent developments in the grain-based biofuels sector, also touching on some of the challenges for the
future. The IGC Grains Conference, held on 14 June, again attracted a large number of participants. The keynote speaker was His Excellency Rachid Mohamed Rachid, Minister of Trade and Industry, Egypt. Other eminent speakers were from Brazil, China, India, Iraq, Italy, Japan, Nigeria, and the United States. Among the featured topics were developments in the global flour milling industry and the grain-based biofuels sector. The next IGC Grains Conference is scheduled to be held in London on 12 June 2007.

The Food Aid Committee held its 94th Session, under the chairmanship of Mr Friedrich Brand (Switzerland). Members of the Committee reviewed the current and prospective food situation and reported on the response by donors to recent food emergencies, notably in eastern and southern Africa. Observers from FAO and WFP informed the Committee of work being done to improve food aid needs assessments and how the challenges were being addressed. With regard to deliveries of food aid under the FAC in the year ending June 2006, it was estimated, based on preliminary data, that some 8.2m. tons* of aid would be shipped, compared with 8.8m. tons* in 2004/05. The Committee received a report from the World Trade Organisation (WTO) Secretariat on
progress with the agriculture negotiations, in particular concerning the issue of food aid.

The Chairman of the Food Aid Committee in 2006/07 will be Mr William Whelan, Senior Food Security Adviser, US Agency for International Development (USAID).

* in wheat equivalent