London, United Kingdom
June 17, 2009
The International Grains Council (IGC) held its biannual
Session in London on 8 June and hosted the IGC Grains Conference
on 9 June. Meeting at Canary Wharf under the chairmanship of Mr
Itumeleng Winston Makabanyane (South Africa), members assessed
the latest global grains situation, exchanged information on
national policy developments and agreed to extend the Grains
Trade Convention, 1995 by a further two years from July 2009,
when rice will be formally included in the definition of grains.
Based on the latest available information on supply and demand,
the Council considered the outlook for grains* in 2009/10. After
the current year’s record outturn, which will result in a
significant recovery in stocks, some reduction in output is
expected. While the total area will not show much change, grain
yields are expected to be lower than the 2008/09 record. It
noted the significantly stronger tone in world markets in recent
months, attributable in part to crop concerns but also closely
linked to other factors, including rises in prices of other
commodities and crude oil, some recovery in equities markets and
a weakening dollar.
World wheat production is forecast to fall by 35m. tons, to
652m., with the biggest declines in several key exporters,
including the EU, Russia, Ukraine and the US. The total is still
expected to exceed consumption, allowing some further rise in
carry-overs in 2009/10. Endseason stocks in the five majors,
however, are not expected to change much. Global trade in wheat
is expected to be lower than the 2008/09 record, as feed
purchases fall and crops improve in Near East Asia. The next
maize (corn) crop is projected at 771m. tons, some
13m. smaller than in 2008/09, with prospects having declined in
recent months, particularly in the US, by far the biggest
producer. A further rise in consumption will result in a decline
in world maize stocks in 2009/10, the biggest drop likely to
occur in the US. Consumption continues to be driven by rising
ethanol use of maize, projected at 121m. tons in 2009/10,
although the rate of increase will be less than in recent years.
While financial and economic difficulties in many countries are
affecting growth in meat consumption and therefore limiting feed
demand, total feed use of maize is expected to rise in 2009/10,
partly at the expense of wheat.
Improved supplies in Asia, especially in Bangladesh and the
Philippines, are expected to lead to the second successive fall
in trade in rice in 2009, to 29m. tons. In contrast to other
commodities, including wheat, maize and oilseeds, export
quotations for most grades remained weak in the first half of
2009, reflecting ample supplies in the main exporters. Despite
larger than anticipated sales to China, world trade in soyabeans
is expected to fall by 10% in 2008/09, to 73.5m. tons. However,
shipments of rapeseed/canola will increase to a record 11.2m.
tons. Initial indications for 2009/10 are that total trade in
oilseeds and oilseed meal will expand, with rises in soyabeans
and meal partly offset by a fall in rapeseed/canola.
The Council approved the Secretariat’s economic Work Programme
for 2009/10, which now covers a considerably expanded menu of
commodities and their products. Having recently introduced a new
weekly Rice Market Bulletin, it would further deepen its
analysis of rice supplies and demand. The Secretariat also
planned to issue a weekly Oilseeds Market Bulletin. It undertook
to examine more closely the unusual market developments in 2007
and 2008, when world prices first soared and then sharply
retreated.
The Council approved its budget for 2009/10. For the first time,
members’ trade in rice would be included when calculating their
financial contributions.
With the Grains Trade Convention, 1995 (GTC) due to expire on 30
June 2009, the Council agreed to extend the Convention by a
further two years. As decided in June 2008, the extension would
coincide with the widening of the GTC’s definition of grains to
include rice, representing another milestone in the Council’s
sixty-year history.
Mr Matthew Koval (Australia) was elected as Chairman of the
Council for 2009/10. Members thanked Mr Makabanyane for his
strong and effective leadership of the IGC in the past year. The
Council planned to meet again on 10 December 2009, when it would
also hold an informal round table with industry participants.
IGC Grains Conference: “The global economic crisis: what
impact on grains and oilseeds?”
A record number of participants from over 50 countries attended
the IGC’s Grains Conference on 9 June to consider the outlook
for grains and oilseeds and how this may be affected by the
global economic crisis. Speakers representing industry and
government from Argentina, Australia, Brazil, Egypt, the EU,
Indonesia, Nigeria, Switzerland, the UK and the US addressed
this topic and gave their views on current and likely future
challenges.
Particular attention was given to food security concerns, the
flour milling industry, the oilseeds sector, rice, futures
markets, ocean freight rates and national policy developments,
including GM issues. On the occasion of the Council’s 60th
anniversary, Mr Morton Sosland, Chairman of Sosland Publishing
Inc and Editor-in-Chief of World Grain, recalled the Council’s
first meeting in 1949 and observed the considerable changes seen
in the role of the organisation since then.
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 (FAC) which,
together with the GTC, forms part of the International Grains
Agreement, 1995 (see also FAC Press Release recirculated on 17
June).
* Wheat and coarse grains |
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