United Nations Conference on Trade and Development

Transcription

1 United Nations Conference on Trade and Development 1th MULTI-YEAR EXPERT MEETING ON COMMODITIES AND DEVELOPMENT April 218, Geneva Assessing the recent past and prospects for grains and oilseeds markets in 218/19 By Darren Cooper International Grains Council The views expressed are those of the author and do not necessarily reflect the views of UNCTAD.

2 IGC 211 Assessing the recent past and prospects for grains and oilseeds markets in 218/19 Some tentative observations United Nations Conference on Trade and Development Multi-year Expert Meeting on Commodities and Development 1 th session Geneva April 218 Darren Cooper International Grains Council dcooper@

3 IGC 211 The International Grains Council (IGC) Grains Trade Convention (GTC) Information sharing, analysis and data on global markets for wheat, coarse grains, rice and oilseeds Commodity coverage has expanded significantly in recent years Rice included in the definition of grains in the GTC from 1 July 29 Oilseeds formally included from 1 July 213 Monitoring of national policy developments Food Assistance Convention (FAC) Its objectives are to save lives, reduce hunger and improve food security, while enhancing the nutritional status of the most vulnerable populations

4 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 IGC 211 Markets for grains, rice and oilseeds post solid gains, particularly during the early months of IGC daily grains and oilseeds index (GOI), January 2 = % IGC GOI is a weighted index, including 34 fob export quotations across a range of origins, spanning eight commodities For further information, see: /grainsupdate/igc_goi.xls; * refers to year-on-year change

5 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 IGC 211 Gains have been broad based in general, a combination of production worries and export demand IGC daily sub-indices, rebased: 17 Apr 217 = 1 Rice Maize Soybeans Wheat Wheat: Markets have been volatile over the period, with a particularly sharp spike in prices in mid-217, tied to high-protein grades. In 218, prices climb on US Plains dryness, some worries in the EU/CIS and logistics. Maize: Supported by concerns about South American crops, coupled with robust demand for US supplies. Buying interest in Ukraine also firm. Soyabeans: Displays considerable volatility, with dwindling crop prospects in Argentina a major factor. But there have been headwinds huge crop in Brazil and heightened worries about US-China trade Rice: Strength tied to firm export demand, especially from Asian buyers, as well as tighter supplies in major exporters.

6 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 IGC 211 Sentiment reflected by changes in traders net positions noting the soyabean complex shift CME Wheat MGE Wheat KCBT Wheat CME Soyabeans CME Soyameal CME Corn 14 Net position (' contracts) Net long Net short

7 IGC 211 During a key phase of development, conditions in Argentina have remained hot and dry Precipitation anomaly Temperature anomaly

8 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 IGC 211 Global markets strengthen on Argentine crop worries, with particularly sharp gains in soyameal 22 IGC GOI soyabeans sub-index, Jan 2 = 1 Soyabean export prices US$/t % Chg. % Chg. fob 1 Jan y/y Share of Argentina in trade * 21 Argentina Brazil % USA Soyameal US$/t % Chg. % Chg. fob 1 Jan y/y 43% Argentina Brazil USA Soyabean oil US$/t % Chg. % Chg. fob 1 Jan y/y 46% 17 Argentina Brazil USA * 5-year average

9 IGC /18 soyabean production Brazil s crop continues to get larger, Argentina s gets smaller 12 Argentina 12 Brazil 12 USA 217/18 Chg. from Oct to Mar Average 1 8 Average 6 Average /1 11/12 13/14 15/16 17/18 9/1 11/12 13/14 15/16 17/18 9/1 11/12 13/14 15/16 17/18

10 IGC 211 Further gains in global acreage projected for 218/19 again led by major producers 13 m ha World harvested area Key points m ha y/y USA % 12 Average Given current soy prices relative to other crops, such as maize, acreage gains possible, but limited by rotational needs? 11 Canada % Further modest increase in plantings likely, to new record, but less pronounced than in 217/18. 1 China % Tied to continued aim of reducing grains (maize) plantings in marginal areas, soy sowings to expand. 9 Ukraine 1.9-5% 8 7 1/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19 (est.) (f cast) (proj.) Reports of reduced margins could discourage some farmers from boosting area. South America % Tentative, and linked to northern hemisphere crop outcomes. Anticipate gains in Brazil, some recovery in Argentina on rotational needs and lower export taxes.

11 IGC 211 World soyabean supply & demand situation and prospects - US stocks at 11-year high in 217/18 15/16 16/17 17/18 18/19 y/y 18 Heavy availabilities, especially in the US (est.) (proj.) change Opening stocks % Production % Total supply % Total use % of which: Crush % Closing stocks % Major exporters a) % Trade (Oct/Sep) % US Argentina Brazil a) Argentina, Brazil and US 9 217/18 world outturn smaller, but second largest of all time, but to recover in 218/19? Total use seen at a new peak, rising by 3% y/y. 6 Trade to advance to a record of 153 on growing Asian needs. 3 Stocks to tighten in the major exporters in 17/18 and 18/19 we see a reverse of the situation from recent past. US stocks now expected to be ample, but heavy drawdowns likely in South America. 6/7 8/9 1/11 12/13 14/15 16/17 18/19 (proj.)

12 IGC 211 As with soy in Argentina, difficult weather impacts maize crops in the southern hemisphere 12 Brazil 6 Argentina 18 South Africa year ave /14 14/15 15/16 16/17 (est.) 17/18 13/14 14/15 15/16 16/17 (est.) 17/18 13/14 14/15 15/16 16/17 (est.) 17/18

13 IGC /19 world maize area projected to be flat 195 m ha World harvested area Average 1/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19 (est.) (f cast) (proj.) Key changes m ha y/y Ukraine 4.3-3% Poor results in 217/18 and reduced profitability expected to discourage some farmers. USA % Amid comparatively better soyabean returns, maize area could drop y/y. However, any decline likely to be capped by rotation requirements. China % Despite strong local prices, policy changes to lead to a third consecutive decline in area.? Russia % Area expected to continue its upward trend. Abandonment projected to be lower y/y.

14 IGC 211 Global maize supplies set to tighten in 218/19, led by falls in China and major exporters 15/16 16/17 17/18 18/19 y/y (est.) (proj.) change 225 A tighter situation anticipated Opening stocks % Production 984 1,88 1,45 1,52 +.7% Total supply 1,268 1,382 1,382 1,36-1.6% Total use 974 1,46 1,74 1, % of which: Food % Feed % Industrial % Closing stocks % Major exporters a) % Ukraine Brazil Argentina US China Trade (Jul/Jun) % a) Argentina, Brazil, Ukraine, USA 1 Production to edge lower, with tentative rebounds in South America contrasting with a fall in the US. 75 Feed and industrial needs to drive consumption higher. 5 Further tightening of stocks likely in 218/19, on drawdowns in China and major exporters. 25 Trade seen little changed y/y, at a peak of 15. Feed demand to underpin large imports across a number of regions. 6/7 8/9 1/11 12/13 14/15 16/17 f'cast 18/19 (proj.)

15 IGC 211 A third consecutive drop in world wheat area is projected in 218/ m ha World harvested area Key changes m ha y/y Average N & C America % 22 Increased spring wheat area forecast in Canada and the USA. Europe % 215 Sowings in parts of Northern Europe were limited by overly wet soils during planting. CIS % 21 Not all planned winter grain area was sown in Russia. Planting weather in Ukraine was better compared to the previous two years. North Africa 6.8-6% 25 Earlier dryness in Morocco expected to have restricted seedings. Far East Asia % 2 1/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19 (est.) (f cast) (proj.) Despite high support prices, sowings in India seen 4% lower y/y, with some area switched into pulses.

16 IGC 211 World wheat supply & demand situation and prospects 15/16 16/17 17/18 18/19 y/y (est.) (proj.) change Opening stocks % Production % Total supply % Total use % of which:food % Feed % Industrial % Closing stocks % major exporters a) % Trade (Jul/Jun) % Major exporters Major exporters stocks tighter China a) Argentina, Australia, Canada, EU Kazakhstan, Russia, Ukraine, US 6 Production seen 2% lower but, due to high carryins, supplies close to peak levels. 5 4 Food demand to underpin consumption growth 3 Leaving aside nominal inventories in China, major exporters stocks set to tighten 2 1 Global trade likely to advance to a new high of 179, with bigger purchases by Iran and India notable. 6/7 8/9 1/11 12/13 14/15 16/17 (est.) 18/19 (proj.)

17 1/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19 1/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19 IGC 211 Wheat trade potentially at a new high in 218/19, with share of Black Sea exporters staying elevated Asia & Africa at about 8% of trade Black Sea volumes close to record in 18/19? 18 Asia Africa Others Kazakhstan 16 Argentina 14 Ukraine Australia Canada EU USA 2 2 Russia (est.) (f cast) (proj.) (est.) (f cast) (proj.)

18 IGC 211 Rice trade to stay high in 218, at close to 46 compares to 41m five-year average Sub-Saharan Africa Far East Asia Other importers 18 (milled basis) 17 (milled basis) 17 (milled basis) Average Average Average

19 IGC 211 India to remain the biggest exporter in 218, taking market share from Thailand? 14 (milled basis) 1 (milled basis) 12 Thailand India 8 6 Vietnam (milled basis) China Will this trend be sustained?

20 IGC 211 World rice stocks kept high by accumulation in China...but those available to world market tighten 8 (milled basis) World stocks seen steady y/y 5 Stocks in Thailand to fall to a decade low? (milled basis) Major exporters Others * China 45 Thailand 4 India /8 9/1 11/12 13/14 15/16 17/18 7/8 9/1 11/12 13/14 15/16 17/18 * Pakistan, USA, Vietnam

21 IGC 211