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IGC Conference 2015 International Grains Council Conference Review

by Nathan Kemp, International Grains Council, UK

“The International Grains Council’s 24th annual conference, held in London on 9 June 2015, brought together some 300 traders, policymakers and other industry professionals. Meeting under the theme “Building on success, responding to challenges,” delegates from 48 countries gathered to assess the recent shifts in market fundamentals, which has seen global grains and oilseeds inventories build to near-record levels, with prices dropping to multi-year lows. ”

74 | Milling and Grain

The International Grains Council’s 24th annual conference, held in London on 9 June 2015, brought together some 300 traders, policymakers and other industry professionals. Meeting under the theme “Building on success, responding to challenges,” delegates from 48 countries gathered to assess the recent shifts in market fundamentals, which has seen global grains and oilseeds inventories build to near-record levels, with prices dropping to multi-year lows. As well as being a key forum for the exchange of views, the conference provided a valuable networking opportunity, bringing together a unique mix of participants from private and public sectors. The International Grains Council (IGC) is an inter-governmental organisation established in 1949 to help promote stability in the global grains market through information sharing and analysis. Administered by a London-based Secretariat, the IGC 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. The conference began with opening remarks by Etsuo Kitahara, Executive Director of the IGC and continued with four theme-based sessions and two special presentations, which included briefings from twelve expert speakers and was interspersed with interactive panel discussions. Setting the scene for the days’ discussions, Mr Kitahara provided an overview of the current market situation, highlighting abundant supplies of wheat, maize (corn) and soyabeans. The IGC Grain and Oilseeds Index (GOI), a trade-weighted index of the world’s main export prices, available for free public download on the IGC’s homepage (www.igc.int), was down by a quarter over the past year and languishing close to its lowest since July 2010. While price weakness was broad-based across most cereals and oilseeds, recent declines were driven by a particularly sharp slump in soyabean prices. Despite seemingly comfortable exportable supplies, the Executive Director cautioned that a number of macroeconomic, political and environmental uncertainties needed to be monitored. Mr Abdolreza Abbassian, Senior Economist (Trade and Markets Division) at the Food and Agriculture Organization of the United Nations (FAO) updated delegates on the Agricultural Market Information System (AMIS), an inter-Agency Platform established at the request of the Agriculture Ministers of the G20 in 2011. As part of efforts to enhance transparency, AMIS seeks to strengthen collaboration and dialogue among the main wheat, maize, soyabean and rice producers, exporters and importers. Mr Abbassian, who also serves as the Secretary of AMIS, outlined the organisation’s structure and functions, in part carried out by a Secretariat consisting of ten international and inter-governmental organisations (including the IGC) and highlighted the regular Market Monitor publication as a particularly useful tool for policymakers. Summarising the stable market outlook for wheat, he noted that the world stocks-to-use ratio was at a healthy level and that forecasts between the various main agencies were broadly similar. Partly reflecting different methodologies, estimates for world maize production and stocks showed more variation between organisations. However, most forecasters were in general agreement that maize supplies were also comfortable, even if unknown stock levels in China provided an extra layer of uncertainty. Mr Stefan Vogel, Head of Agri Commodity Markets Research at Rabobank provided further insight into the supply and demand situation. Noting that agricultural commodity prices were being pressured by record 2014/15 harvests and stocks, he cautioned that the world is now entering a period of weather market volatility, which may be amplified by an El Nino weather event this year. Mr Vogel highlighted the impact of recent movements in currency markets on grains and oilseeds prices, with gains in the value of the US dollar adding to the recent downside. Given the relative strength of the dollar, US wheat exporters were finding it particularly hard to compete, with the EU benefitting accordingly. However, both the EU and US were expected to face heightened competition from Black Sea exporters during 2015/16, with combined wheat shipments by Russia, Ukraine and Kazakhstan predicted to increase slightly compared to the

Jul 2015 - Milling and Grain magazine  

The July 2015 edition of Milling and Grain magazine

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