World Grains and Oilseeds: Recent Trends and Perspectives. Agribusiness in Argentina A seminar on Investment Opportunities London 14 December 2011

Transcription

1 www. IGC 2011 World Grains and Oilseeds: Recent Trends and Perspectives Agribusiness in Argentina A seminar on Investment Opportunities London 14 December 2011 Darren Cooper Senior Economist International Grains Council dcooper@

2 Presentation overview www. The International Grains Council Global Markets for Grains and Oilseeds Fundamentals in 2011/12: some brief observations Argentina: its context in grains and oilseeds

3 International Grains Council (IGC): who are we and what do we do? www. Grains Trade Convention (GTC) Extensive commodity coverage: wheat, coarse grains and rice, plus detailed market information on oilseeds and products Rice included in the GTC from 1 July 2009 Information sharing, analysis and data on global markets Consultation on policy For further information: www. Food Aid Convention Donors pledge to provide, annually, minimum amounts of food aid to developing countries. (around 5 m. tons) In December 2010, members began the formal process of renegotiating a new Convention Food Assistance Convention For further information:

4 International Grains Council: Membership in 2011/12 www. Members Algeria EU(27) Morocco Tunisia Argentina India Norway Turkey Australia Iran (Islamic Rep.) Pakistan Ukraine Canada Japan Russia United States Côte d Ivoire Kazakhstan Saudi Arabia Vatican City Cuba Kenya South Africa Egypt (Arab Rep.) Korea (Rep. of) Switzerland

5 The starting point: www. www.

6 Extensive monitoring of global markets: daily, weekly and monthly analytical approach www.

7 Members are able to extract detailed data and projections.and much more www.

8 In addition, a large and growing subscriber base www.

9 www. IGC 2011 Global Markets for Grains and Oilseeds

10 A feeling of déjà vu: have we been here before..and where to next? www. 350 Daily IGC Grains and Oilseeds Index (GOI), Jan 2000 = Jan Nov Jan Dec ? 150 A 14-month low but still higher than in 2008! Jan 01-Apr 01-Jul 01-Oct 01-Jan 01-Apr 01-Jul 01-Oct Jan 2007, 2010 Jan 2008, 2011 For further information about the IGC GOI, see:

11 IGC GOI and sub-indices: markets mostly fall since June www. IGC 2011 IGC GOI and sub-indices, Jan 2000 = IGC GOI Wheat 340 Maize Rice 320 Soyabeans Jun 13-Jun 25-Jun 07-Jul 19-Jul 31-Jul 12-Aug 24-Aug 05-Sep 17-Sep 29-Sep 11-Oct 23-Oct 04-Nov 16-Nov 28-Nov

12 Grains/oilseeds vs. rice: very much a year of two halves www. In the six months to early June 2011, rice was unique in posting losses but the situation has been completely reversed in the past six months 50 % change, daily IGC GOI and components 30 % change, daily IGC GOI and components + 16% % + 8% 20-10% Rice Soyabeans Wheat GOI Canola Barley Maize Sorghum Wheat Maize Barley GOI Canola Soyabeans Sorghum Rice

13 Day-to-day volatility more pronounced over the past decade www. 40 Volatility, HV 20 (%), IGC GOI * IGC GOI 35 Trend-line Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 * HV 20 refers to the % standard deviation of daily price movements over a 20 day period

14 Day-to-day volatility is a key market factor: mixed in 2011, but eases somewhat in recent weeks www. 60 Volatility in wheat futures falls as market drops on external financial worries HV 20 *, monthly averages MGE A similar trend for corn futures in 2011, but soyabeans mixed HV 20 *, monthly averages 60 CME Corn 50 CME KCBT 50 CME Soyabeans Volatility eases, but will likely remain a key market feature Dec 10 Feb 11 Apr 11 Jun 11 Aug 11 Oct 11 Dec 11 Dec 10 Feb 11 Apr 11 Jun 11 Aug 11 Oct 11 Dec 11 * Expressed in percentage terms, HV 20, or historical volatility, is defined as the standard deviation from the mean over a 20 day period.

15 www. IGC 2011 Fundamentals in 2011/12: some brief observations

16 1,850 1,800 1,750 m. tons < World consumption < World production Stocks: major exporters** > Record grains* crop but outpaced by demand growth www , , , , , , ,400 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 0 * Wheat and coarse grains **Argentina, Australia, Canada, EU, Kazakhstan, Russia, Ukraine, US

17 Black Sea wheat exports to surge in 2011/12 at the expense of other origins, mostly US & EU www. Change from 10/11 (m. tons) Ukraine Russia Kazakhstan USA WHEAT VARIETIES (12 Dec 11) fob export quotations US HRW $282 EU EU (Germany) Grade B $256 EU (France) Grade 1 $245 Canada US SRW $241 Black Sea Milling $240 Australia APW $239 Australia Black Sea Feed $225 Argentina (Up River) $223 Argentina

18 Slower growth in in global maize use in 2011/12 www. 14% YOY change Total Use Feed Industrial 12% 10% 8% 6% 4% 2% 0% 10-yr ave. 10/11 11/12 10-yr ave. 10/11 11/12 10-yr ave. 10/11 11/12

19 World maize stocks to fall to five-year low, incl. very thin US carryover www. 160 m. tons Others 100 China share: 45% China US share: 40%? US share: 16% Other major exporters* USA 0 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 *Argentina, Brazil, India, Ukraine

20 With US supplies tighter, other maize exporters gain market share www. 45 m. tons Others * Share in world trade 50% 40 Ukraine Brazil % of world total > 45% 35 Argentina 40% 30 35% 30% 25 25% 20 20% 15 15% 10 10% 5 5% 0 0% 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 * Includes, South Africa, India, China and the EU.

21 US soyabean exports to contract in 2011/12, those by S America to expand, but crop prospects are key www US export sales in MY11/12 progress at a markedly reduced pace * m. tons 2010/ m 2009/ / m S American exporters expected to more than offset declines in US shipments in 11/12 m. tons Argentina USA Argentina Brazil m Sep 08-Sep 15-Sep 22-Sep 29-Sep 06-Oct 13-Oct 20-Oct 27-Oct 03-Nov 10-Nov 17-Nov 24-Nov 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 * As at 24 November 2011

22 www. IGC 2011 Argentina: its context in grains and oilseeds

23 Argentina: a marked shift in crop acreage in favour of oilseeds www. 20 m. ha. Ave. 10-Year YOY % 18 Rice Others Maize Wheat Soy share: 64% 14 Soyabeans Soy share: 35% /97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12

24 Argentine exports record strong growth, especially oilseeds and their products www m. tons Soyabean oil 1996/97 34m. Soyabean meal Soyabeans 2011/12 76m. + 7% per year Sorghum Rice Barley Maize Wheat /97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12

25 Argentina: a major role in all grains and oilseeds markets www. Five-year Average * Exports Tons (million) Global Rank % share of world trade Maize Wheat Barley Sorghum Rice Soyabeans Soyabean meal Soyabean oil * Refers to the five year period: 2006/ /11

26 www. IGC 2011 Thank you for listening Darren Cooper Senior Economist