Milling & Baking News - December 29, 2009 - 29

Exports and Trade 

Expected growth in global grain
crops in line with demand forecast
LONDON - The Secretariat of the International Grains
Council presented to the Council's recent meeting a review of the factors that will affect supply and demand for
wheat and all grains during the next five years. Central
to the outlook was that grain availabilities currently were
"more ample than forecast a year ago." In addition, the
Secretariat pointed to likely annual output gains of 1.5%
to 2014-15.
"Improved economic activity should boost grain demand, but a slowdown in the expansion of the ethanol
sector may contain growth," the Council noted. "Feed
demand was expected to increase, although this would
be affected by the increased use of industrial co-products
such as distillers dried grains, as well as oilseed meals.
Global stocks were projected to recede, mainly because of
tightening maize inventories. World trade in grains was
expected to rise by 2% annually."
In looking at the current situation, the Council was told
that world grain stocks were expected to increase further at the end of 2009-10, reaching a total of 373 million
tonnes, against 360 million a year earlier and the low of
290 million in 2008. The main boost will come from rising
wheat inventories. In the case of maize (corn), the Council said the large increase in U.S. production in 2009 was
offset by marked falls in China and the European Union.

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30 / December 29, 2009 Milling & Baking News

For 2010-11, the Council said it expected a slight reduction in area seeded to wheat. Based on an assumed return
to normal yields following the high outturns of 2009 and
2008, the I.G.C. placed the prospective world wheat harvest at 645 million tonnes, down 3.5% from the preceding
year. This will "likely
lead to a minor decline
in world stocks," the
I.G.C. stated.
World trade in wheat
in 2010-11 was forecast
to be only slightly less
than the estimated total for the current year.
The latter was put at 118
million tonnes, against
136 million in 2008-09.
Noting that most
grain prices have returned to levels ruling prior to the 2007-08 surge, the
Council described markets as "still volatile." It pointed to
the recent climb in rice prices to levels that were above
2007 levels. World trade in rice was projected to rise to
29.6 million tonnes from 28.2 million in 2009-10. It said
that a poor rice crop in India this year likely will result in
a shift in use to wheat, "which is in ample supply."
The Council also reviewed the global oilseeds situation, pointing out that another year of large purchases by
China helped lift world trade in soybeans, to a record 78
million tonnes, compared with 76.8 million in the prior
season. Exports of soybean meal increased, while reduced
imports by the European Union and China likely will lead
to a decrease in rapeseed/canola trade.
A highlight of the Council session was a roundtable discussion centering on how the extreme grain price volatility in 2007 and 2008 had affected retail prices of bread and
other key food products. The panel was made up of Bernard Valluis from France, deputy president of the French
Millers' Association; Alex Waugh, director-general, National Association of British & Irish Millers (NABIM),
U.K.; and by video link, Jannie de Villiers, executive director, National Chamber of Milling, South Africa, and John
Wiebold, director of grain operations, General Mills, Inc.,
Minneapolis.
According to the I.G.C., the panel exchanged views on
the relationship between grain prices and the retail prices
of food products during the 2007-08 price surge. It noted,
"This was a complex topic as the structures of milling and
baking industries, and retailing systems differ considerably among countries. The price transmission appeared
most direct in lower-income countries where other food
product costs, including marketing, transportation and
packaging, were proportionally smaller.
Current Council chairman is Matthew Koval, ministercounselor (agriculture) in the Australian Mission to the
European Union, Brussels. I.G.C. members agreed that
the next session will be held June 7, 2010, to be followed
by the I.G.C. Grains Conference on June 8. It also was revealed that Council members "warmly welcomed" the
chairman's invitation, on behalf of his national authorities, to hold the December 2010 session of the I.G.C. in
Australia. MBN
bakingbusiness.com / world-grain.com

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Milling & Baking News - December 29, 2009

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