World Grain - January 2013 - 18

newsreview
Rabobank: China will drive agricultural commodity demand
NEW YORK, NEW YORK, U.S. — Rabobank announced
on Dec. 18 that a recent poll of its clients shows that China’s
inﬂuence on agricultural commodity demand and global
economic growth, along with increasing weather extremes,
stand out as key issues for North American food, beverage
and agribusiness in 2013.
The poll of over 350 executives from leading companies in
the North American food, beverage and agribusiness industry
was conducted at Rabobank’s recent Markets Forum held in
New York City.
Asked to name the country or region that they believe will
have the greatest impact on global agricultural commodity demand over the next 10 years, 61% of respondents at the Rabobank Forum chose China. That view of China’s continued
dominance far exceeded views of India (14%), Africa (10%),
Latin America (9%) and Southeast Asia (6%).
Despite recent signs of slowing economic growth in China, the large majority of executives polled by Rabobank see
China continuing to be the most important driver of long-term
global economic growth. Forty-one percent of respondents
said China would drive the global economy for between ﬁve
and 10 more years, while 40% said China will remain the pri-

mary driver of global economic growth for the next 50 years.
In addition to their views on China, Rabobank Forum attendees provided opinions on a range of topics that they believe will be signiﬁcant issues for the global and North American food and agriculture/agribusiness industry in the coming
years, including production levels, risk management, genetically modiﬁed organisms (GMO), social media, and U.S. and
European macroeconomics.
Notably, 68% of attendees named weather extremes/volatility
as the single biggest factor affecting North American food and
agribusiness in 2013. That concern far outweighed the next two
closest factors — consumer demand (13%) and policy/regulation (10%). Geopolitical events, trade/tariffs/exchange rates,
and policy/regulation all received votes in the single digits.
Reﬂecting the concern over continued weather volatility,
59% of respondents said that 2012 drought has changed their
views about risk management in their business. Executives at
the Rabobank Forum cited an increased focus on ﬁnancial liquidity (25%), increased investment in risk management and
insurance (21%), and greater diversiﬁcation (13%) as their
three leading solutions to hedge against continued volatility in
weather patterns and commodity markets.

China cancels 300,000-tonne soybean purchase
WASHINGTON, D.C., U.S. — The U.S. Department of
Agriculture (USDA) said on Dec. 18 that China, the largest
importer of soybeans from the U.S. and the world, canceled a
previous purchase of 300,000 tonnes of soybeans for delivery
in 2012-13, the current marketing year that began Sept. 1.
Also, there was a cancellation of 120,000 tonnes of soybeans sold to “unknown destinations” for delivery in 2012-13.

At the same time, “unknown destinations” bought 110,000
tonnes of soybeans for delivery during 2012-13, and on Dec. 17
bought 91,000 tonnes of soybeans for delivery in 2012-13 and
60,000 tonnes for delivery in 2013-14, according to the USDA.
“Unknown destinations” often is interpreted to be China,
although that is not sure until destinations are revealed and/or
changed closer to shipment, the USDA said.

Cargill launches wheat flour in India
NEW DELHI, INDIA — Cargill announced on Dec. 18 that
it has made packaged wheat ﬂour available under its NatureFresh brand in India.
In the launch’s ﬁrst phase, NatureFresh Chakki Atta is
available in various pack sizes across retail outlets in cities in

northern India and the state of Karnataka in the south.
“Growing at about 15% annually, the packaged atta segment shows much potential for sustained growth,” said Siraj Chaudhry, chairman of Cargill India and head of Cargill
Foods India.

Letter to the editor
Your editorial (“Grains freed from macroeconomic forces” — World Grain November 2012) is excellent and forward looking. World Grain is second to none in coverage
of all grains worldwide and events such as droughts and
weather conditions that reduce yields and impact prices of
grain.
The production of ethanol from corn (maize) has had a
very signiﬁcant effect on demand. This program was introduced at the outset with a 50¢-per-gallon subsidy for ethanol produced from corn.
This was canceled last year by the U.S. Congress and
the use of ethanol is mandated now in gasoline at 10% to
15%. The startling aspect of this program is that about 4
to 5 billion bushels of corn are now utilized in ethanol
production.
This is about 35% to 40% of the total U.S. annual corn
18

production, which is approximately equal to the annual
consumption of the North American livestock and poultry
industries.
Think of it this way: If there was no ethanol production
in North America there would be an extra 4 to 5 billion
bushels of grain (corn) for the food and feed market. The
impact downward on grain prices would be marked to say
the least.
The ethanol program in the U.S. is ill advised as food
should not be used for fuel as in the long run it will mean
very serious problems in food production worldwide.
Cam Brown
Principal
J.C. Brown Consulting Services
Winnipeg, Manitoba, Canada
January 2013 / World Grain / www.World-Grain.com

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World Grain - January 2013

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