Developments and challenges in commodity markets: current situation and outlook- Agricultural Commodities

Transcription

1 Multi-year Expert Meeting on COMMODITIES AND DEVELOPMENT March 211, Geneva Developments and challenges in commodity markets: current situation and outlook- Agricultural Commodities by Mr. Etsuo Kitahara, Executive Director, International Grains Council "The views expressed are those of the author and do not necessarily reflect the views of UNCTAD"

2 IGC 211 United Nations Conference on Trade and Development Expert Meeting on Commodities and Development Geneva, March 211 Developments and challenges in commodity markets: current situation and outlook Agricultural Commodities Etsuo Kitahara Executive Director International Grains Council

3 IGC 211 Grain prices: return to close to 28 peaks $/ton fob US soyabeans, fob Gulf US HRW wheat, fob Gulf EU (France) feed barley, fob Rouen US maize, fob Gulf Soyabeans Y-Y Y-Y Y-Y Y-Y % change since one year ago + 41% Wheat Other + 6% Barley + 11% Maize + 77% Mar-1 Mar-2 Mar-3 Mar-4 Mar-5 Mar-6 Mar-7 Mar-8 Mar-9 Mar-1 Mar-11

4 IGC 211 IGC Grains & Oilseeds Prices Index (GOI) 7 January 2 18 March Jan 2 = 1 35 GOI Peak reached on 27 Jun Mar 211: Jan- Jan-1 Jan-2 Jan-3 Jan-4 Jan-5 Jan-6 Jan-7 Jan-8 Jan-9 Jan-1 Jan-11

5 IGC 211 IGC Grains & Oilseeds Prices Index (GOI) GOI and Components Export quotations included Commodity No. of Country Variety Shipment location Quotations Wheat 9 Argentina Trigo Pan fob Up River Australia ASW fob Eastern States Canada No. 1 CWRS, 13.5% fob St. Lawrence Canada No. 1 CWRS, 13.5% fob Vancouver EU (France) Standard Grade 1 fob Rouen US No. 2 HRW (Ordinary) fob Gulf US No. 2 SRW fob Gulf US No. 2 DNS, 14% fob PNW US No. 2 SW fob PNW Maize 2 Argentina fob Rosario (Up River) US No.3 Yellow fob Gulf Barley 2 EU (France) Feed fob Rouen EU (Germany) Feed fob Hamburg Sorghum 1 US No.2 Yellow fob Gulf Rice 3 Vietnam 5% Broken fob Ho Chi Minh Thailand 5% Broken fob Bangkok Thailand 1 % B fob Bangkok Soyabeans/ 3 Argentina fob Rosario (Up River) Soyameal Brazil fob Paranagua USA No.2 Yellow fob Gulf Canola 1 Canada Canola fob Vancouver

6 IGC 211 IGC Grains & Oilseeds Prices Index (GOI) GOI and Components Weightings (%) Commodity Weighting (%) Wheat 3 Maize 22 Barley 4 Sorghum 2 Rice 8 Soybeans & Soyameal 32 Rapeseed/Canola 2 TOTAL 1

7 IGC 211 The impact of currency movements 36 GOI, Jan 2 = 1 1$ = euro per $ GOI.7 Mar- Mar-1 Mar-2 Mar-3 Mar-4 Mar-5 Mar-6 Mar-7 Mar-8 Mar-9 Mar-1 Mar-11.6

8 IGC 211 The CFS Food Price Volatility Portal...to provide information that will help to monitor the food price situation and provide links to useful tools for policy makers. Resources for monitoring food price trends: World Food Situation FAO The Market Monitor WFP Volatility in Agricultural Markets FAO Grain Market Information and Indices IGC Global Information and Early Warning System on Food and Agriculture FAO

9 IGC 211 Heightened day-to-day volatility... especially during the past year 6 5 HV 2 *, monthly averages MGE Wheat CME Wheat KCBT Wheat Volatility in wheat market peaks in August 21 August 21 peak HV 2 *, monthly averages 6 CME Soyabeans 5 CME Corn while trends for corn and soyabeans also higher Increased day-to-day price swings on unrest in N Africa & N E Asia and Japan concerns Jan 1 Feb-1 Mar 1 Apr 1 May 1 Jun 1 Jul 1 Aug 1 Sep 1 Oct 1 Nov 1 Dec 1 Jan 11 Feb 11 Mar 11 Jan 1 Feb 1 Mar 1 Apr 1 May 1 Jun 1 Jul 1 Aug 1 Sep 1 Oct 1 Nov 1 Dec 1 Jan 11 Feb 11 Mar 11 Note: March average based on the measure of HV 2 up to and including 18 March

10 IGC 211 Wheat area set to be largest in 13 years but yields may not match trend m. 25 Production (m. tons) Production Trend Harvested Area (m. ha) Area (m.ha) yr ave. Yield Trend Yield (tons/ha) Yield (tons/ha)

11 IGC 211 Wheat: supplies rise, but matched by consumption 9 m. tons 8 7 Opening Stocks Consumption Production /2 2/3 3/4 4/5 5/6 6/7 7/8 8/9 9/1 1/11 11/12

12 IGC 211 Wheat: world trade to expand m. tons Durum Wheat Flour Feed Wheat Milling Wheat Up 4m. Tons, to 127m. m. tons including more feed trade 1 1 China 8 8 Others Thailand 6 6 Philippines Japan 4 4 Indonesia S Korea Israel 2 2 EU 2/3 3/4 4/5 5/6 6/7 7/8 8/9 9/1 1/11 11/12 2/3 3/4 4/5 5/6 6/7 7/8 8/9 9/1 1/11 11/12

13 IGC 211 US maize (corn): big rise in area required but also good yields 35 Production (m. tons) Harvested area (m. ha) 36 3 Production Harvested area / 32 3 Yield (tons/ha) / 1 1 Yield 26 / /

14 IGC 211 US maize (corn): stocks to remain tight next year 35 Despite a projected record crop and below-average consumption growth m. tons 6 m. tons US supplies are likely to remain tight in 211/12 Production Exports Consumption 4/5 5/6 6/7 7/8 8/9 9/1 1/11 f'cast 11/12 proj. 1 Ending stocks 4/5 5/6 6/7 7/8 8/9 9/1 1/11 f'cast 11/12 proj.

15 IGC 211 US maize: supply and demand scenario for 211/12 21/11? 211/12 * Planted (m. ha) (+4%) Harvested (m. ha) Yield (tons/ha) Production (m. tons) Carry-in (m. tons) Total Supply (m. tons) Feed/Residual (m. tons) Ethanol (m. tons) Other (m. tons) Total Domestic Use (m. tons) Exports (m. tons) 5 51 Carry-out (m. tons) 17 (5%**) 22 * Based on USDA Agricultural Outlook Forum As at 25 th February 211. ** Carry out as a percentage of total use

16 IGC 211 China s imports of US maize increase on wider domestic-us import price spread 45 4 $/ton US maize fob (Gulf) plus freight China domestic maize (Dalian) 35 Imported 1.5m. tons US maize in Jun-Sep 21, owing to wider China-US import price spread Mar-8 Sep-8 Mar-9 Sep-9 Mar-1 Sep-1 Mar-11

17 IGC 211 US DDG exports expand rapidly, including large sales to China 1 m. tons 8 Others 6 4 South Korea EU-27 Canada Mexico 2 China 24/5 25/6 26/7 27/8 28/9 29/1 21/11 21/11* Imports - 2.5m. Tons (maize equivalent 7.4m.) *Sep/Aug

18 IGC 211 Global 1/11 rice carryover to climb on improved outturn World production to again exceed use, albeit slightly, in 21/11 m. tons (milled basis) Production Consumption allowing a further increase in inventories, but remaining well below the /1 record m. tons (milled basis) Stocks/Use, % Other China A record 5 Stocks to Use /1 2/3 4/5 6/7 8/9 1/11 f'cast /1 2/3 4/5 6/7 8/9 1/11 f'cast

19 IGC 211 US soyabeans: tight supplies to constrain further export growth in 211/12 1 m. tons Production expected to be near unchanged... 2 m. tons US stocks to remain tight. 9 Production Exports Consumption Ending stocks 4/5 5/6 6/7 7/8 8/9 9/1 1/11 f'cast 11/12 proj. 4/5 5/6 6/7 7/8 8/9 9/1 1/11 f'cast 11/12 proj. * Based on USDA Agricultural Outlook Forum As at 25th February 211.

20 IGC 211 Ocean freight rates: with surplus tonnage still a factor, higher grains exports prompt recent rate increases 14 US to Japan, Brazil to EU US$/ton GFI, BDI 14, 12 12, 1 1, 8 US Gulf to Japan Heavy Grain 8, IGC Grain Freight Index GFI 6 6, 4 4, 2 Brazil to EU Heavy Grain 2, Baltic Dry Index BDI Jun 7 Sep 7 Dec 7 Mar 8 Jun 8 Sep 8 Dec 8 Mar 9 Jun 9 Sep 9 Dec 9 Mar 1 Jun 1 Sep 1 Dec 1 Mar 11

21 IGC 211 Market factors for Grains and Oilseeds Global grains & oilseeds supply outlook remains tight. as is also the case for several other commodities Recent world events add to concerns and heightened day-day-day price swings Nervousness about 211/12 crop prospects will likely add to volatility Wheat supplies in 211/12 should remain adequate, despite high feed use & limited upturn in Black Sea region exports. but quality will be important Import duties being lowered or removed to lessen world price impact US winter wheat condition & corn plantings will be closely watched If US corn supplies do tighten further, will this affect ethanol policy? South American soyabean crop prospects improve, especially in Argentina In contrast to other grains, international rice market is unremarkable

22 IGC 211 Thank you & hope to see you at the IGC Grains Conference on 7 June 211 (see for further details)