World Grain - July 2020 - 26

ANALYSTS
SEE V-SHAPED
ECONOMIC
RECOVERY IN

2021

IGC conference speakers agree the global grain industry
has performed well during the COVID-19 pandemic

A

lthough relegated to a virtual format due to the
coronavirus (COVID-19) pandemic, the 2020
International Grains Council Conference on
June 10 still managed to assemble an impressive list
of leading grain industry analysts, most of whom foresee a relatively dramatic and swift economic recovery
from this ongoing global crisis.
During a panel discussion on stimulating globalization of the grains sector, a variety of topics were discussed, including the impact of COVID-19 on the grain
sector, the need to maintain predictability in global
markets, and why nations must resist the urge to implement protectionist policies during times of crisis.
Florent Beluche, a commodities analyst for JP Morgan, predicted a
"V-shaped" recovery in 2021 for
both developing and developed
economies, with 7% growth
after a decline by roughly the
same percentage in 2020.
"A V-shaped recovery is
likely in terms of both food
consumption and grain
consumption,"
Beluche
said. "It will take a little
time, but I think this optimistic scenario brings some hope
to many agricultural commodity producers."
While the world's grain supply has
remained ample during the crisis, demand
deteriorated badly this spring when many countries
issued shelter-in-place orders to their citizens and shuttered "non-essential" businesses, including restaurants,
in an attempt to slow the spread of the virus, which has
26

infected millions and killed hundreds of thousands.
Beluche said JP Morgan "foresees consumption,
while not going back to normal, rebounding to levels
similar to what we've known before," in the coming
months.
"It will take some time but the main message here is
that we're looking at a world recovery," Beluche said.
"We've seen unprecedented cash injections by central
banks to stimulate local economies."
-RKQ *UL൶WK VHQLRU YLFH SUHVLGHQW RI JOREDO JUDLQ
marketing at CHS, agreed that the countries that have
seen the impact of COVID-19 lessen and rescinded
lockdown orders are seeing quicker-than-expected economic recoveries.
"In the US we are seeing trends that give us optimism around the recovery and going back to what was
our previous state," he said. "I avoid using the word
'normal' because I don't know if we'll ever be back
to normal, but there are a lot of signals of economies
recovering more quickly than expected."
Abdolreza Abbassian, senior economist for the
Food and Agriculture Organization and secretary of
the Agricultural Market Information System, said that
while the Great Recession 10 years ago was characterized by a supply shock in commodity markets, the current COVID-19 crisis involves the rarer occurrence of
a severe demand shock. He described grain markets as
"the thermometer of the world."
³7KH\UHÀHFWGLUHFWO\RULQGLUHFWO\RQKRZIRRGDIfects our day-to-day life," he said. "This particular demand shock has some very concrete characteristics."
Arnaud Petit, executive director of the IGC, moderated this year's
International Grains Conference, held in a virtual format due
to the coronavirus pandemic.
July 2020 / World Grain / www.World-Grain.com

Photo courtesy of IGC.

by Arvin Donley
http://www.World-Grain.com
World Grain - July 2020

Table of Contents for the Digital Edition of World Grain - July 2020
