December 1, 2015

Members of the International Grains Council (IGC) convened for the 42nd Council Session on 30 November 2015. The meeting was chaired by Ms Carla Seain, Under-Secretary for Political Coordination, Ministry of Agriculture, Livestock and Fisheries, Argentina. The latest supply and demand outlook and market developments for grains, rice and oilseeds were assessed, while recent changes in national policies and administrative matters were considered.

Based on the latest Grain Market Report (GMR 461), world total grains (wheat and coarse grains) production in 2015/16 was expected to fall short of the previous year’s record, but only by a fraction. Bumper outturns of wheat, barley and sorghum were seen being outweighed by a drop for maize, although output of that crop could still be the third largest ever. A further rise in global consumption was anticipated, underpinned by solid demand for food and animal feed. Nevertheless, end-2015/16 stocks were projected to expand by 1% y/y (year-on-year), to a 29-year high. While some of the rise was seen in the major exporters, an accumulation was also expected in China, where inventories are largely inaccessible to the global grains economy. A 2% decline in world trade was forecast, mainly because of smaller wheat and barley imports in Near East Asia and North Africa following good domestic harvests.

With northern hemisphere winter wheat sowing for the 2016/17 harvest well advanced, only a small fall in global area was projected. Incorporating tentative assumptions for spring wheat plantings and the next southern hemisphere crops, world 2016/17 harvested area was placed about 1% lower y/y. Recent rains had alleviated concerns about dryness for autumn sown wheat in some places, although worries about the poor start to the growing season persisted in certain areas, particularly in Ukraine. While world wheat production was not expected to match the previous season’s record, large stocks would cushion the impact of any decline, likely keeping overall availabilities ample.

World rice stocks in 2015/16 were projected to drop by 12% y/y, to a seven-year low, almost entirely linked to a heavy fall in major exporters’ inventories, seen contracting by one-third, to their lowest since 2007/08. Trade was expected to remain historically high in 2016 on large shipments to Asian markets in particular, while Thailand would replace India as the world’s largest exporter. Global soyabean output was seen matching the previous year’s record on likely bumper outturns in leading producers and, despite growth in uptake to a new peak, aggregate carryovers were anticipated to edge up to a fresh high as a steep rise in the US more than offset declines elsewhere. Traded volumes were expected to rise slightly on a modest increase in deliveries to China, with Brazil set to be the world’s biggest exporter, its shipments significantly exceeding those by the US. With bumper crops swelling availabilities, the IGC Grains and Oilseeds Index (GOI) has fallen by 20% y/y, including declines in wheat (-25%), maize (-11%), rice (-12%) and soyabeans (-22%). Finally, the Council noted the plunge in dry bulk freight markets to record lows in 2015 against the backdrop of weaker demand and excess tonnage capacity.

The Council considered administrative matters, including an update on progress with its economic work programme. The Secretariat presented its medium-term supply and demand projections (covering the period 2016/17-2020/21); while some retreat in grains, rice and oilseeds stocks was anticipated, global availabilities were seen remaining comfortable*. In line with the Council’s new medium-term work programme priority to foster improved links with international grains trade participants, members agreed to the International Grain Trade Coalition’s (IGTC) participation in Council sessions to facilitate a dialogue on major policy issues affecting grains trade. The IGTC’s President, representing the organisation’s affiliated associations and councils, will be invited to attend the Council’s 43rd Session in June 2016. The Secretariat also informed members that a new redesigned public section of the IGC website had been launched earlier that day.

* The full report is to be made available at: www.igc.int

Website: http://www.igc.org.uk

Published: December 2, 2015