London, United Kingdom
December 13, 2007
At the invitation of the
Government of Japan, the International Grains Council and Food
Aid Committee held their biannual sessions in Tokyo on 4 and 6
December 2007. On 5 December, a special International Grains
Forum examined the outlook for food supplies in the current
tight global market, with a panel discussion focussing on the
situation in Asia.
International Grains Council
The 26th Session of the
International Grains Council, chaired by Ms Judith St George
(Canada), assessed the current world grain situation and outlook
and took note of recent changes in national policies. While
global output in 2007/08 would be the highest ever, mainly
because of a record US maize (corn) crop, this would not match
consumption, resulting in a further downturn in global ending
stocks in 2007/08. By far the biggest
increase in consumption would be in the biofuels sector, with
the amount of grain (mainly maize) used to produce ethanol set
to reach 100m. tons, an increase of 44% from the previous year.
With wheat supplies especially tight due to disappointing
2007 crops in several countries, including Australia, prices had
hit record highs. Some exporters had taken measures to protect
domestic consumers, including new or additional export taxes.
Recent surges in ocean freight rates had added further to the
burdens of importers, especially developing countries, although
the expected decline in wheat trade in 2007/08 would be largely
due to
improved crops in some leading importers rather than the high
import prices. Growers were expected to respond to the much
higher prices and expand the global wheat area by around 4% for
the 2008/09 crop. Based on average yields, output in 2008 could
increase to around 645m. tons, which could result in some
recovery in world stocks at the end of 2008/09.
A huge rise in maize output in the US, more than
offsetting the expected increase in ethanol use, prevented maize
prices from rising as sharply as those of wheat. However, this
year’s substantially higher international demand for this grain,
especially in the EU, will lift trade to a new record. Although
maize supplies appeared adequate, there were concerns about the
outlook for 2008/09, when a significant shift in plantings back
to soyabeans was likely to occur in the United States.
With respect to rice, the Council noted the firmness of
international prices. Prospects for trade in calendar 2008 would
depend on the outcome of harvests between now and mid-2008, but
there were indications that world shipments could see an
increase, even if Indonesia is a less significant buyer. World
oilseed and vegetable oil prices had shown particular strength
in recent months, often linked to developments in other
commodities and
energy markets. Continued strong demand in China was driving
trade in soyabeans higher in 2007/08.
Members of the Council agreed that IGC’s increased coverage of
information on rice and oilseeds was of considerable benefit to
the organisation’s work but that it would need to discuss
further how this should be formalised. The matter would be
included in the agendas of the next Executive Committee meeting
and the June 2008 Council session. The Executive Director
reported on recent initiatives to expand the Council’s
membership.
Members paid tribute to Mr Fritz Brand (Switzerland), the
Council’s Vice-Chairman, who died on 4 September. Mr Brand had
made a considerable contribution to the work of the Council over
several years and would be greatly missed by his many friends
and colleagues. The Council elected Mr Itumeleng Winston
Makabanyane of South Africa as Vice-Chairman for the remainder
of 2007/08.
Food Aid Committee
The Food Aid Committee held its 97th Session under the
chairmanship of Dr Hedwig Wögerbauer of Austria. Members took
note of the latest developments in the Doha negotiations on
agriculture on the basis of an update provided by the WTO
Secretariat. The Committee agreed that the renegotiation of the
Food Aid Convention (FAC) would need to await the outcome of the
WTO negotiations. As the FAC was due to expire on 30 June 2008,
it was agreed in principle that the Convention should be further
extended by one year from that date.
Against the background of recent developments in international
grain and oilseed markets, with substantial increases in prices
and ocean freight rates, donors took note of the current and
prospective food situation in developing countries. Members
shared information on recent food emergencies, particularly in
Africa, also receiving a report from the World Food Programme
(WFP) observer.
The observers from the Food and Agriculture Organisation (FAO)
and WFP outlined the work being carried out on improving food
aid needs assessments. The organisations had collaborated
closely with a view to improving food emergency needs
assessments and would soon publish new Crop and Food Security
Assessment Guidelines. According to preliminary data from FAC
donors, total food aid shipments in the year ended June 2007 had
amounted to 7.4m. tons, down from 8.3m. in 2005/06. Estimates
provided at the meeting suggested that shipments would likely
decline to around 6m. tons in 2007/08, with the further sharp
increases in prices of grain and other foods, and record
transportation costs, straining donors’ budgets. Nevertheless,
food aid deliveries were expected to exceed the combined tonnage
commitment under the Convention.
Members were greatly saddened by the unexpected death of Mr
Fritz Brand (Switzerland) who had so ably chaired the Committee
in 2000/01 and 2005/06 and had played such an active role in its
work. The Committee elected Mr Masato Takaoka (Japan) as
Vice-Chairman for 2007/08.
International Grains Forum
The International Grains Forum, entitled “Securing food supplies
in a tighter global market”, attracted a large number of
participants. Eminent speakers set out their views on the
current world grain situation and longer-term prospects, against
the background of current tight supplies and the rapid increase
in demand, particularly for biofuels. The event was coorganised
by the Ministry of Foreign Affairs, the Ministry of Agriculture,
Forestry and
Fisheries and the International Grains Council. Speakers
included Dr Mark Keenum, US Under Secretary of Agriculture, Xu
Xiaoqing, Deputy Director, Department of Rural Economy,
Development Research Center of the State Council of China, and
Akio Shibata, Director, Marubeni Research Institute, Japan. In
the afternoon, a panel discussed the topic “Asia: will supplies
keep pace with demand?”. |
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