Arnaud Petit
Executive Director
International Grains Council

The 33rd IGC Grains Conference 2024 titled “Reshaping the conversation on global trade and food security” was held in London on the 11th and 12th June 2024 and addressed the role of trade in global food security. More than 350 delegates attended the conference to discuss the latest grains market developments and trade opportunities, particularly in Central and South Asia.

A constructive dialogue between grains producers and importers

The second edition of the dialogue between grains producers and importers took place with the contribution of the Ministry of Agriculture of Algeria, Deputy Minister of Agriculture of Turkey, Deputy Minister of Economy of Ukraine and The Ministry of Foreign Affair of Japan and the Chair and the Agri Committee of WTO. The discussion highlighted that stable and transparent trade rule system is vital to global food security. Importing countries insisted there is no exclusion between a national strategy for food security and openness to trade. The predictability and transparency of the global market allow sounds policy decision. WTO Agri-Committee Chair introduced the agenda about trade and food security approved in May 2024. 

INNOVATION AND DIGITIZATION: DRIVERS OF THE GRAINS VALUE CHAIN

Day 1 focused on grains productivity and innovation to respond to food, feed and energy demand as well as sustainable production.  Over the last 30 years soybean yields have increased by 50% in Brazil and rice yields in India have increased by 60% mainly due to seed technologies, plant protection and nutrition and agronomy practices.  Global trade in these commodities has increased on average by 30% in the last decade, showing the close relationship between productivity and global trade. 

Innovation in the input industry, including the plant breeding sector [ensures a margin of manoeuvre between local production and global demand] provides scope for local producers to trade globally. It can take 4-5 years for new technologies to be granted approval.  In the US, for soyabeans and corn it takes 5 years on average to get approval which equates to a loss of 45 million tons of soyabeans and corn or 8-9 million hectares based on an annual increase in production of 1%.

Nowadays climate change has become a real challenge to increasing grains production. As an example, following the adoption on new technologies, for 50 years US corn production increased by 121kg/hectare per year.  However, in the last 10 years it has only increased by 20 kg/hectare per year on average, mainly due to extreme weather events. 

The conference also included a panel on productivity and sustainability with a presentation from Julio Cesar Forte Ramos, Brazil’s Deputy Secretary for Trade and International Relations on the country’s project to rehabilitate 72 million hectares of degraded pasture to arable land by 2030. This project would mitigate the 1 billion tons of co2 equivalent and would boost Brazil’s agricultural productivity by 60% over the 5-year period. The cost of the land conversion would be about $3,000 per hectar. 

Jennifer Crall, Bayer Crop Science’s Global Head of Partnerships, Growers Engagement and Agrichain Activation, highlighted the way Bayer supports farmers to adopt new technologies and practices by closely involving them. 

The third relevant topic discussed was the digitization of the whole grains value chain from production to the shipping broker. The digitization process is not new in the grain sector but we are facing an approach mainly in silo with a lot of difficulties in developing bridges between the initiatives. Stefan Temple, Head of Crop Science Digital Strategy & Crop Protection Innovation Lab, Bayer Crop Science, explained a project to digitize all the support to farmers in order to provide them with another decision making tool. Traders are interested in executing their contracts via digital platforms as they can now use new tools to assess the compliance of a cargo they are interested in purchasing. Bearing in mind the need for data protection, the efficiency of the grains value chain could be greatly enhanced if all operations were interconnected. 

FORECAST HARVEST 2024: NEW ALL-TIME PEAK!

The second day of the conference was dedicated to latest developments in commodity markets. The main information related to grains, soybeans, rice and pulses based on the conference discussions as well as the last IGC forecasts published in the July Grain Market Report on the 18 July 2024 are summarized below.

The forecast for global total grains (wheat and coarse grains) production in 2024/25 is lifted by 22m t, to a new all-time peak 2,321m, up by 1% y/y (year-on-year). Incorporating latest acreage estimates and, with improved yield prospects in some countries, outlooks for wheat (North America, Pakistan, Kazakhstan) and maize (US) harvests are revised higher. However, with feed, food and industrial consumption expected to increase further, to record highs, a 1% retreat in stocks is envisaged at the end of 2024/25, to a 10-year low of 586m t. 

Maize accounts for most of the drop (-2%) as carryovers are drawn down in the EU, Russia, Ukraine and across sub-Saharan Africa. Although the projected drop in wheat inventories could be comparatively modest, this would nonetheless mark a second successive year of tightening. Tied to predicted declines in wheat and maize flows, grains trade is projected to recede by 7%, to 418m t.

With a heavy crop boosting availabilities in 2023/24, global soyabean inventories are seen accumulating solidly, including gains in key exporters. While trade is set to edge lower, volumes would be markedly above average. Tied to bumper crops in major suppliers, production is seen at a peak of 415m t (+6%), with utilisation and reserves also pegged at fresh highs. Trade is projected to expand by 3% y/y on larger shipments, with an uptick in demand from China, Europe and Africa anticipated. In respective local marketing years, the US and Brazil are expected to dispatch more.

Linked to gains in key exporters, world rice production in 2023/24 is estimated to have grown by 1%, to a new peak. With consumption edging lower, combined end-season inventories are pegged 2m t higher y/y, including solid accumulation in India, still the dominant exporter. Global output is projected to increase to a new high in 2024/25, including further gains in exporting countries, while total use is seen advancing by 1% as stocks edge up. Trade is projected to move above 53m t in 2025, marginally up y/y, with the Council making an allowance for larger Indian dispatches.

Against the backdrop of a smaller broad beans outturn, global stocks are seen contracting in 2023/24. Looking to prospects for 2024/25, world production is predicted to increase, mainly on a bigger EU crop, with consumption and aggregate reserves projected to hold steady. After falling by 15% in the prior year, trade in 2025 is seen edging up (+3%) on firm demand from buyers in Asia and Africa.

Pencil already your agenda for the 34th Edition to be held on the 10th and 11th June 2025 at London, follow up on www.igc.int