|
June 13, 2008
The International Grains Council (IGC) held its regular
Session in London on 9 June, hosting the IGC Grains Conference
the next day. The Food Aid Committee, also administered by the
IGC, met in the previous week, on 6 June.
Members of the Council met in London’s Canary Wharf under the
chairmanship of Ms Judith St George (Canada). Taking into
account the latest information on market and national policy
developments, representatives from the world’s exporting and
importing countries exchanged views on this year’s steep rises
in world prices of grains and other foods, their continued
volatility and the negative impact on importers, especially
developing countries.
Record ocean freight costs added to the burden. While prices of
some grains, notably wheat, had declined from earlier peaks as
market supply concerns eased, the supply outlook for maize
(corn) remained extremely tight, with prices still rising. Total
grain* supplies, while adequate, would remain finely balanced in
2008/09, with no recovery in carry-over stocks expected. Stocks
in the five major exporters would likely dip further from their
already low 2007/08 level of 84m. tons. The use of grains in
ethanol production was projected to climb by a further 29m. tons
in 2008/09, to 124m., representing over 7% of global
consumption. This would include some 117m. tons of maize;
ethanol use of other grains, while also set to expand, remained
relatively small.
The outlook for wheat was for a significant upturn in output in
2008/09, with IGC expecting production to rise by 46m. tons, to
a record 650m. There had already been a big harvest in India,
where procurements had exceeded previous highs, while prospects
were mostly favourable elsewhere. Although consumption was also
expected to rise, with animal feed use, in particular, set to
recover, world carry-over stocks in 2008/09 were projected to
rise from their very low level this year. Due to the impact of
drought in parts of Near East Asia and likely lower prices,
world trade in wheat and wheat flour was expected to increase by
around 4m. tons, to 109m. Prospects for maize (corn) were much
less favourable, especially in view of the forecast decline in
the US crop and sharply higher use in the production of ethanol,
likely to lead to a marked reduction in the US carry-over in
2008/09. World production was expected to fall from the previous
year’s record of 777m. tons, but consumption would continue to
go up, resulting in a decline in stocks. World trade in maize,
after setting a new record in 2007/08, was projected to be
sharply lower, mainly because of much-improved feed grain
supplies forecast in the European Union and the likely higher
price of this grain relative to wheat and other grains.
Members of the Council unanimously decided to add rice and its
products to the definition of grains under the Grains Trade
Convention with effect from 1 July 2009, when the Convention is
next due to be extended. This recognises the importance of this
key food grain and commits the Council to embrace it in all its
future activities. Members received an update from the
Secretariat on recent market developments, which noted that rice
prices had begun to recede from recent peaks but that these
remained very high. Mainly because of the tight situation in the
international market, world trade in rice was expected to fall
by 9% in calendar 2008, to 27.9m. tons.
The Council also adopted a
resolution to include oilseeds and their products in its regular
information activities. It expected to see a further rise in
global trade in oilseeds in 2008/09, driven by increased imports
of soyabeans by China and expanding Asian markets for soyameal.
The Council approved its budget for 2008/09 and agreed a work
programme which aims to further expand and intensify the
Secretariat’s market analysis activities, to include a number of
special topics. In the light of increased concerns about
national export measures, the Secretariat undertook to compile
more information on recent border measures with a view to
assessing their impact on trade and market prices.
The Council elected Mr Itumeleng Winston Makabanyane (South
Africa) as Chairman for 2008/09 and thanked Ms Judith St George
for her successful leadership in what had been a particularly
important year for the Council. It was agreed that the Council
would next meet on 10 December 2008, when it also planned to
hold an informal round table with industry participants to
exchange views on the role of futures markets.
IGC Grains Conference
On 10 June, a record number of participants from the
international grains industry, from governments and other
organisations attended the IGC Grains Conference 2008, held at
the Queen Elizabeth II Conference Centre in London. Under the
title: “Volatile markets – who will pay the price”, the event
aimed to achieve a better understanding of recent grain market
developments, especially the year’s huge rises in prices of food
and other commodities and freight rates, and share views about
future supply and demand prospects. The Conference was opened by
Dr Mark Keenum, United States Under Secretary of Agriculture,
with H.E. Dr Abdulfalah Hassan Al-Sudani, Minister of Trade,
Iraq and John D. Johnson, President & CEO of CHS Inc, USA,
making keynote presentations. Several other eminent speakers*,
in addition to assessing supply and demand trends and prospects,
gave their perspectives on recent developments including global
food security concerns, trade policy changes, recent volatility
in futures exchanges, the increased market role of investment
funds, developments
in biofuels, surging ocean freight markets and recent changes in
the world rice economy.
The International Grains
Council (IGC) is an intergovernmental organisation administering
the Grains Trade Convention, 1995 (GTC), the latest in a long
series of multilateral agreements in operation since 1949. It
seeks to further international cooperation in grains trade; to
promote expansion, openness and fairness in the grains sector;
to contribute to grain market stability and to enhance world
food security. These objectives are sought by improving market
transparency through information-sharing, analysis and
consultation on grain market and policy developments. The IGC
also administers the Food Aid Convention, 1999 which, together
with the GTC, forms part of the International Grains Agreement,
1995. For more information, including the latest supply and
demand forecasts, please consult
IGC’s web site or contact the Secretariat.
* Wheat and coarse grains |
|
