Current Market Situation and Outlook*

Transcription

1 Current Market Situation and Outlook* Abdolreza Abbassian, AMIS Secretary Trade and Markets Division Economic and Social Development Department Food and Agriculture Organization of the United Nations, FAO AMIS First Meeting of the Rapid Response Forum 11 April 2012 Mexico City * This presentation relies on FAO data and analysis. The views expressed may not reflect those of other members of the AMIS Secretariat. On completion of the AMIS database in the near future, AMIS will be able to provide a consensual view of the market outlook.

2 Presentation Overview Where are we with food prices? World cereal markets in 2012/13 Supply and demand developments in grains and rice markets Market situation and outlook for soybeans Price thermometer for 2012/13

3 Prices are not low!

4 But they may decline a bit Slide 4

5 Cereals in 2012/13 Early outlook points to a relatively comfortable season ahead but not for all cereals CEREALS: PERCENT CHANGE OF 2012/13 OVER 2011/12 PRODUCTION Wheat -1.5% Coarse Grains 4.0% Rice 1.7% Total Cereals 1.9% UTILIZATION Wheat -2.3% Coarse Grains 3.8% Rice 1.3% Total Cereals 1.5% CLOSING STOCKS Wheat 8.8% Coarse Grains 1.6% Rice 7.8% Total Cereals 6.1%

6 Cereal Stocks-to-Use Ratios rise slightly in 2011/12 and they may end higher in 2012/13 Million Tonnes Percent Stocks Major Exporters Stocks Rest of the World World Stock -to-use-ratio Stock to disappearance ratio of Major Exporters Slide 6

7 Rice Production exceeding consumption again in 2012 Rice export prices under downward pressure Million tonnes Million tonnes US$/tonne Stocks (left axis) Production (right axis) Utilization (right axis) US 2/4% Thai 100% B Viet 5% Pak Irri-25% Thai A1 Super

8 USD per tonne Policy changes drive international rice prices Floods in Pakistan, Nepal, China Thai Gov, releases stocks Pheu Party wins Thai elections Thai Floods Thai Gov Implements the new high price pledging scheme Strong Purchase by Nigeria ahead of doubling of import duties in July Large second harvests in exporting countries + weak demand 350 Viet Nam devalues its currency India lifts export ban Thailand-100% B Pakistan-10% Viet Nam-5% India-IR 5%

9 Indonesia behind expected contraction of rice imports in 2012 India s return as exporter increases market competition Million tonnes, milled eq. Million tonnes, milled eq f'cast f'cast

10 Maize and wheat prices more stable but still high US$/MT, fob Floods in Pakistan Rains in Canada and USA Rains and Floods in Australia USDA March 2011 planting/stocks forecasts Announcement by Russia of lifting the ban from July Russian Droughts Russian Export Ban USDA maize yield projections USDA October 2010 maize output cuts Political Tensions Oil price surge USDA maize planted acreage estimates Macroeconomic Conditions EURO Crisis CIS Production Recovery Higher US Maize Production and Stocks Strong US$ 150 Declining US$ Winter wheat uncertain growing conditions in US & China 100 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 Wheat Maize

11 Wheat: Production is forecast to decline in 2012 but supply would remain large Million Tonnes Stocks (right axis) Utilization (left axis) Million Tonnes Production (left axis) Wheat production: leading producers 1/ (million tonnes) Average estimate 2012 forecast Change: 2012 over 2011 (%) European Union China (Mainland) India United States of America Russian Federation Australia Canada Pakistan Turkey Ukraine Kazakhstan Iran Islamic Rep. of Argentina Egypt Uzbekistan World / Countries ranked according to average production Slide 11

12 Coarse grains: Production needs to expand by at least 6 percent in 2012 to replenish stocks Million Tonnes Million Tonnes Stocks (right axis) Production (left axis) Consumption (left axis) Slide 12

13 But also demand remains uncertain: More for ethanol? More for feed? Maize Use for Ethanol (excluding non-fuel) in the United States 2004/ / / / / / /11 thousand tonnes 2011/12* (f'cast) Maize Production Ethanol Use Yearly ethanol use change (%) 13% 21% 32% 44% 21% 25% 9.3% -0.4% As Production (%) 11% 14% 20% 23% 30% 35% 40.3% 40.5% Source: WASDE-USDA. *March 2012 assessment of US and World crop supply

14 Million Tonnes 150 Wheat trade: Could remain as high as in 2011/12 but Ukraine may export less wheat 150 Coarse grains trade: Could expand with larger sales by traditional exporters, USA exporting more maize Million Tonnes Major Traditional Exporters CIS Other Exporters Major Traditional Exporters CIS Other Exporters

15 350 CBOT wheat futures for September delivery: Trading below last year USD per tonne USD per tonne 280 CBOT maize futures for December and nearby delivery: Trading below last year but maize costs more now than in December (inverse) Sep Oct Nov Dec Jan Feb Mar As of 3 April Dec Jan Feb Mar Apr 2011 Values 2012 Values Nearby As of 3 April Value 2012 Value

16 Soybean/Maize ratio Soybean (Nov 2012 contract)/maize (Dec 2012 contract) From a historical perspective in the USA, whenever this ratio exceeds 2.4, the general bias favours soybean over maize, resulting in a shift of planting area from maize to soybeans

17 World soybean production well below utilization: Very tight market World soybean stocks declining with the stocksto-use ratios also falling Million tonnes Million tonnes % % 40 10% % % 10 Production Domestic Utilisation Closing Stocks (right axis) Stock-to-use ratio (left axis) Stock-to-disappearance ratio major exporters (left axis)

18 Soy Complex - Spot Prices (Monthly Average) CBOT soybean futures November contract USD per Tonne 1600 USD per tonne Values 2011 Values 2012 Values As of 3 April 2012 Soymeal: 44/45%, Hmb, fob ex-mill Soyoil: Dutch, fob ex mill Soybean : US, cif Rotterdam

19 Price Thermometer Low High Wheat Rice Maize Soybeans

20 More in May Food Outlook And in: