Turmoil in Global Cereal Markets

Transcription

1 and Agriculture Organization of United Nations Economic and Social Development Department Turmoil Global Cereal Markets EBRD ROUNDTABLE DISCUSSION London, 28 October 2010 Abdolreza Abbassian Secretary of Intergovernmental Group on Gras, FAO

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4 Extraordary Intersessional Meetg of Intergovernmental Group (IGG) on Gras and IGG on Rice Rome, Italy, 24 September 2010 On Agenda Market Developments and Short-Term Outlook for Wheat, Rice and Coarse Gras Briefg from Delegates on ir countries strategies to cope with food price stability Lessons learnt from 2007/08 food crisis International Actions: Institutional Framework a) Information and market transparency b) Globally coordated actions c) Role of FAO and of IGGs

5 and Agriculture Organization of United Nations Economic and Social Development Department Wheat and barley prices rise most August, maize October! USD per tonne Wheat Maize Barley Russian Export Ban USDA Production Cut Jan Feb Mar Apr May Jun Jul Aug Sep Oct

6 and Agriculture Organization of United Nations Ma reasons are: Economic and Social Development Department Price Volatility Lower stocks than past; i.e. for cereals Growg lks with outside markets; i.e. energy More production comg from less stable ( terms of yields) regions; i.e. CIS Increased dependence on ternational trade Few exporters accountg for most of export supply Trade policies; i.e. export restrictions & but not so certa: Speculators Climate change What to do? We need to reduce price volatility as well as lowerg its impacts How? Market formation and market transparency Safety Nets

7 and Agriculture Organization of United Nations Economic and Social Development Department FOOD PRICES

8 and Agriculture Organization of United Nations Economic and Social Development Department Wheat Production... Country * over estimate forecast 2009 (.. million tonnes..) (. Percent.) European Union Cha (Maland) India United States of America Russian Federation Canada Pakistan Australia Ukrae Turkey Kazakhstan Iran Islamic Rep. of Argenta Egypt Uzbekistan Ors * Countries listed accordg to ir position global production (average ) * Countries listed accordg to ir position global production (average )

9 Barley: production down sharply Million Tonnes Ors Australia Canada CIS EU

10 and Agriculture Organization of United Nations Economic and Social Development Department Coarse Gra Production... Country * over estimate forecast 2009 (.. million tonnes..) (. Percent.) United States Cha (Maland) European Union Brazil India Russian Federation Mexico Canada Argenta Ukrae Nigeria Indonesia South Africa Australia Ethiopia Ors * Countries listed accordg to ir position global 1,125.6 production (average ) 1, * Countries listed accordg to ir position global production (average )

11 Cereal production and utilization Year-to-year change cereal production

12 wheat supply and demand outlook 2010/11: Tight but manageable... Production and Utilization Closg Stocks

13 coarse gra supply and demand outlook 2010/11: Gettg tighter... Production and Utilization Closg Stocks

14 rice supply and demand outlook 2010/11: Record production and high stocks Production and Utilization Million tonnes Million tonnes Closg Stocks Production Utilization f'cast f cast

15 Trade Wheat Coarse gras

16 and Agriculture Organization of United Nations Economic and Social Development Department United States: Maize Stocks and Stock-touse Ratio 000 tonnes 140, , ,000 Closg Stocks Stock-to-Use Ratio % ,000 60,000 40,000 20,

17 CIS gra exports by type CIS, EU and USA exports

18 USD per tonne Shockg OECD-FAO model: If wheat production CIS* remas low for two consecutive years n: Projected wheat prices Production -19.5mt -25mt /Exports -11mt -17mt Prices +15% +25% origal projected prices projected "shocked" prices slide 18/30

19 and Agriculture Organization of United Nations Economic and Social Development Department More Uncertaties Maize USA: More surprises (more production cuts November)? Severely tight maize supplies USA: What if demand for ethanol rise faster? Maize Cha: Official production much higher than private sources: How much maize will Cha import 2010/11? Sourn hemisphere: Harvestg of wheat approaches & wear is critical - too wet East Australia! Wheat plantgs Russia well below last year (13.5 million hectares compared to 18.5mh last year). Wheat Plantgs Ukrae also short of target (6.75mh) Wter plantg USA: Conditions not so good - worst 15 years says USDA What to plant more for next year USA? Corn or soybeans? Policy: Will food flation encourage export restrictions? US Dollar: Weaker dollar, higher ternational prices! Prices of or crops: From soybeans to cotton and sugar, prices are high and some creasg. Wheat and rice supplies are adequate but for how long ir prices can resist upward pressure comg from or markets?

20 and Agriculture Organization of United Nations Economic and Social Development Department CBOT Futures - March Wheat Maize

21 Are we ready? I. We are not a food crisis and gra prices may even come down a bit II. III. But all dications pot to still high prices and volatile markets with many uncertaties lyg ahead security under growg market stability and price volatility: Are we ready?

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23 Contacts FAO, Trade and Markets Division A. Abbassian (Analyst) Tel: (++39) C. Cerquigli (Database Management and Outlook Reports) Valenta Banti (Admistrative Assistant) Situation Portal: FAO Gras Website: slide 23/30