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June 18, 2007
The International Grains Council (IGC) held its regular
bi-annual session in London on 11 June, which was followed the
next day by the IGC Grains Conference. Earlier in the month (on
1 June), the Food Aid Committee, also administered by the IGC
Secretariat, held its regular session.
Under the chairmanship of Mr
Mohamed Elaref Soliman, Minister Plenipotentiary, Embassy of the
Arab Republic of Egypt, members of the International Grains
Council considered the outlook for grains in 2007/08 on the
basis of the latest market information. Although world
production was expected to climb by nearly 90m. tons, it was
noted that a further significant rise in consumption, triggered
by expanded biofuel use, would result in supplies remaining
unusually tight and global carry-out stocks very low. The latest
indicators showed continuing strength in prices, with markets
extremely sensitive to weather developments such as the recent
dry spell in eastern parts of Europe, Ukraine and southern
Russia. Moreover, a surge in ocean freight rates in recent
months had added to importers’ costs, with many developing
countries facing difficulties in financing their purchases.
Overall, trade in wheat and coarse grains was likely to match or
exceed the 2006/07 total but some countries might revise their
buying plans if prices stayed high.
The Council also examined the
latest developments in rice and oilseeds markets; values of most
oilseeds and vegetable oils had risen strongly in recent months,
similarly linked to global energy price developments and biofuel
needs. With regard to animal feed use of grain, this was
expected to be unchanged in 2007/08. However, if all other
ingredients are included, world feed use will continue to rise
due to greater incorporation of oil meals and distillers’ dried
grains (DDG), a major by-product of the ethanol industry.
Among individual grains, it was
noted that wheat crop prospects had recently declined and that
2007/08 carry-over stocks would likely decline further. Trade in
this grain could rise further although Black Sea feed wheat
availabilities would likely turn out lower than originally
projected.
A record US maize crop would
considerably lift the global production figure but a huge
increase in consumption for ethanol will keep US supplies very
tight. US ethanol use of maize is forecast at around 86m. tons,
representing four-fifths of global use of grains for biofuels.
High prices would likely keep the world maize trade total just
below the 2006/07 record.
The Council also considered
prospects for trade in rice in the light of IGC’s latest
forecast of import demand: a sharp rise in purchases by
Indonesia is expected to lift the world figure in calendar 2007
by some 1m. tons, to 29.4m. With respect to oilseeds, it is
likely that trade in soyabeans would climb further due to
sustained high demand in China.
Members of the Council expressed
their strong support for the work currently being undertaken to
expand coverage of the rice and oilseeds sectors. The aim is to
formally incorporate rice into the Grains Trade Convention, 1995
by the end of the year and, in view of the interrelationships
between oilseeds and grain markets, to also report on a regular
basis on developments in oilseeds and their products.
The Council reviewed the economic
work recently undertaken by the Secretariat and approved the
proposed programme for 2007/08. This will include the
examination of several specific topics, further improvements in
its dissemination of information to members, including further
website enhancements, and work connected with forthcoming
meetings and conferences. Members unanimously agreed to extend
the Grains Trade Convention, 1995 by a further two years, to 30
June 2009 and approved its budget for 2007/08. The Council
elected Ms Judith St. George, Minister-Counsellor
(Commercial-Economic), Canadian High Commission, London, as
Chairperson for 2007/08. It also thanked Mr Soliman for his
excellent leadership during the past year. Members accepted the
Government of Japan’s invitation to hold the next (26th) Session
of the Council in Tokyo on 4 December 2007, to be followed by an
international grains forum the next day.
The IGC Grains Conference 2007 was
held on 12 June at the Queen Elizabeth II Conference Centre in
London. The Conference, attended by a record number of
representatives from the international grains industry and from
IGC member countries, was opened by Lord Jeff Rooker (UK
Minister of State for Sustainable Farming and Food). Speakers
from China, France, India, Mexico, Netherlands, South Africa,
Spain, Switzerland, and the United States focused in particular
on the challenges facing the grains and oilseeds industry
because of the steeply
increasing demand for biofuels against a background of robust
human food and animal feed demand and tightening grains and
oilseed supplies. Participants were also informed of trends and
prospects in the rice economy, in malting and brewing, in the
ocean freight transportation of grain, and in the operation of
US commodity futures markets.
Members of the Food Aid Committee
met in London on 1 June under the chairmanship of Mr William
Whelan of the US Agency for International Development (USAID).
Donors reviewed the food situation in developing countries,
sharing information on current food emergencies, especially in
Africa, and on how donors and international agencies were
responding to them. Several members reported on their recent
operations, many of them focused on the food crisis in
Sudan/Darfur. The observer from the World Food Programme (WFP)
informed the Committee of its major operations in Afghanistan,
Chad, Congo (Dem Rep), Ethiopia, Kenya, Palestinian
Territories, Somalia, Sudan and regionally in southern Africa.
With to a view to better
understanding the work being done by the African Union (AU), on
behalf of food aid recipients, particularly in relation to
Pillar 3 (“Increasing food supply, reducing hunger and improving
responses to food emergency crises”) of the Comprehensive
African Agricultural Development Programme (CAADP), Dr Ibrahima
Diallo, Senior Policy Officer of the AU, was invited to make a
special presentation. He explained CAADP’s approach to food
security and the efforts being made to accelerate the
Programme’s implementation in order to achieve its goals.
On the basis of preliminary
information provided by members, it was estimated that FAC food
aid shipments in 2006/07 (July/June) would likely be somewhat
lower than the previous year’s 8.9m. tons*, but that most donors
had again significantly exceeded their annual commitments under
the Food Aid Convention,1999.
Members considered the latest
developments in the Doha negotiations on agriculture, as
communicated by the WTO Secretariat, and agreed that the
renegotiation of the Food Aid Convention would need to await the
final outcome of the WTO negotiations. It was therefore agreed
that the Food Aid Convention, 1999 would be extended by one
year, to 30 June 2008.
Members also noted with interest
the discussions which had taken place during the recent Berlin
Conference on “Food aid: exploring the challenges” and the
previous day’s presentation by the Alliance for Food Aid, an
informal group of 15 non-profit organisations that conduct
humanitarian and development programmes in 130 countries.
Dr Hedwig Wögerbauer (Director,
Federal Ministry of Agriculture, Forestry, Environment and Water
Management, Austria) was elected as the Committee’s Chairperson
for 2007/08.
Members of the Committee thanked
Mr Whelan for his inspired leadership during the past year.
For more background on the role
and activities of the International Grains Council and the Food
Aid Committee, and also the IGC Grains Conference, please see
the IGC web site: www.igc.org.uk.
*Wheat equivalent |
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