www.igc.int

IGCIGC 20112013 igc.int

International Grains Council

AMIS Crops: Market Situation and Outlook in 2013/14

Third Session of the AMIS Global Food Market Information Group

Paris, OECD Headquarters 23-24 April 2013

Amy Reynolds International Grains Council [email protected]

Exporter stocks tighten in 2012/13, www.igc.int IGCIGC 20112013 good 2013 crops needed to replenish supplies igc.int

Maize: Soyabeans: Wheat: m t m t Black Sea leads decline m t US lowest since 95/96 Total up, but US still down 90 70 25 Others Argentina Argentina EU Ukraine Brazil 80 Black Sea 60 Brazil US US US 20 70 50 60

15 40 50

40 30 10

30 20

20 5 10 10

0 0 0 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13

1 www.igc.int First fall in total grains consumption in 14 years; IGCIGC 20112013 igc.int lower wheat feeding and maize industrial use

m t y/y change 20% Food Food Industrial 2000 Feed Feed Other 15% Industrial

1500

10%

1000 5%

500 0%

0 -5%

www.igc.int IGCIGC 20112013 IGC GOI down from highs, but grains still elevated igc.int

IGC daily index (GOI), rebased: Jan 2012 = 100 Dow Jones–UBS commodity sub-indices 160 150 Y/Y Grains

Wheat +10.4% 150 140 Prec. metals Soyabeans +45%4.5% Base metals Maize -0.7% 130 140 Rice +0.2% Energy

120 Softs 130

110 120 100

110 90

100 80

90 70

80 60 Jul-12 Jul 12 Oct-12 Apr-13 Apr-12 Oct 12 Oct Jan-13 Jan-12 Jan 12 Apr 12 Jan 13 Apr 13 Feb-13 Feb-12 Jun-12 Mar-13 Mar-12 Feb 12 12 Mar Feb 13 13 Mar Jun 12 Dec-12 Sep-12 Sep 12 Dec 12 Nov-12 Aug-12 Nov 12 Nov May-12 May 12 May 12 Aug

2 www.igc.int Wheat production to increase in 13/14 IGCIGC 20112013 igc.int on larger harvested area

m t m ha

YIELDS • Average global yields up slightly, close to five-year average

PRODUCTION /3.1 • Output to rise by 24m t, to Yield (t/ha) Yield 680m /2.9 • Led by gains in the EU and CIS • Argentina, Australia and Canada up, but US crop to fall /2.7

(f’cast)

www.igc.int Increase in wheat production matched by use, IGCIGC 20112013 igc.int so may be little prospect for global stocks growth

0.5% rise in world consumption Only modest rise in end-13/14 stocks

y/y change m t mt 250 Industrial Major exporters India Share of all use still very small FdFeed China Others Food 200 Total use More competition 150 from maize

+1% y/y, mainly 100 population growth

50 Around 680m t (2nd highest ever)

0

-4 -2 0 2 4 6

3 Wheat export prospects for 13/14: www.igc.int IGCIGC 20112013 only a small rise in Black Sea exports expected igc.int

m t

Up about 2m t in 13/14

Another year of high exports by India?

www.igc.int End-12/13 maize stocks to fall to 6-year low; IGCIGC 20112013 igc.int sharp recovery in 13/14?

mt % stocks/use 180 25%

US China Other exporters* Others 160 Stocks/use > 20% 140

120 15% 100

80 10% 60

40 5%

20

0 0% 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13 13/14

*Argentina, Brazil, EU, South Africa and Ukraine

4 www.igc.int Maize (corn): US 13/14 ending stocks are projected to IGCIGC 20112013 igc.int increase, but by how much?

t/ha / m t

2012/13 2013/14 2013/14 2013/14 USDA f’cast Ag. IGC What if? Forum

Yields 7.7 10.3 9.7 9.0 ??

Production 274 369 357 325 ??

Domestic 263 292 290 280 ?? Use

Exports 23 38 38 33 ??

Carry-out 19 55 49 28 ??

17-Year low ?

26-Year high

www.igc.int Maize: Soaring demand; IGCIGC 20112013 igc.int more than half the rise due to industrial use:

Index of consumption, 02/03=100 150 Average annual increase

140 Wheat + 1 .2% Rice + 1 .4%

Maize + 3.4 % 130

120

110

100

90 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13 13/14

5 www.igc.int IGCIGC 20112013 ….. soyabean demand growth not far behind maize igc.int

Index of consumption, 02/03=100 150 Average annual increase

140 Wheat + 1 .2%

Rice + 1 .4%

+ 3.4 % 130 Maize Soyabeans + 2.8 %

120

110

100

90 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13 13/14

www.igc.int IGCIGC 20112013 Soyabeans: Global trade growth led by China igc.int

China’s imports growing by around Major importers shares of trade 5m t annually m t 70 Japan 4% Mexico 5 year ave 4% 60 11/12 12/13 Others 50 13/14 23% EU 16% 40

30

20 China 52% 10

0 Japan Mexico EU China

6 www.igc.int Soyabeans: the US 13/14 carryover is projected to rise, but IGCIGC 20112013 igc.int all hinges on a bumper crop

Tentative projections for US in 2013/14 rest on prospects for strong yields

Five 2012/13 2013/14 2013/14 year f’cast proj. What if average USDA yields m t * Ag. are Forum average?

Yields 2.81 2.67 2.99 2.81 (t/ha)

Production 85.8 82.1 92.7 87.1

Domestic 48.6 47.2 48.9 47.9 Use

Exports 38.1 36.6 40.8 38.5

Carry-out 4.3 3.4 6.8 4.5

* Unless otherwise stated.

www.igc.int Is Brazil set to become the world’s leading IGCIGC 20112013 igc.int soyabean exporter?

mt 50

US Brazil

40

30

20

10

0

f’cast proj

7 www.igc.int Rice: world stocks comfortable; IGCIGC 20112013 igc.int major exporters at record

Major exporters’ at record, World 12/13 stocks near unchanged y/y but how easily available? m t, milled basis m t, milled basis 120 45 Others Vietnam 40 China US 100 5 exporters* 35 Pakistan Thailand 80 30 India

25 60 20

40 15

10 20 5

0 0

*India, Pakistan, Thailand, US, Vietnam

www.igc.int Rice: High Thai export prices restrict shipments. IGCIGC 20112013 igc.int China’s imports surge

Thailand prices at a marked premium due to China was a big rice buyer in 2012… intervention buying m t and maybe in 2013 too $/t fob, 25% broken 2.5 650 Others

Pakistan

600 Vietnam 202.0 Thailand

550

1.5 500

450 1.0

400

Thailand 0.5 350 India Vietnam Pakistan 300 0.0 Oct/11 Oct/12 Apr/12 Jun/11 Feb/12 Jun/12 Feb/13 Dec/11 Dec/12 Aug/11 Aug/12 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

8 www.igc.int IGCIGC 20112013 Key points igc.int

• Overview – Global background unsupportive; lacklustre growth, recently firmer dollar and weaker oil prices – Prices elevated; stocks still tight and vulnerable to supply disruption – good 2013/14 harvests needed – Volatility picked up slightly, but still at low level – Freight rates in grain-carrying sectors under pressure

• Wheat – Global supply and demand balance is tight; major exporters’ stocks at five-year low. – After strong early sales in 2013/13, Black Sea wheat surplus mostly sold, US now the cheapest origin – In spite of expected output recovery, only a small increase in world wheat stocks projected for end 2013/14

• Maize – World 2012/13 carryover stocks forecast at 6-year low, 16-year low for key exporters – Output should recover in 2013/14 and consumption should rebound, led by feed – World 2013/14 stocks expected to rise sharply, including strong recovery in the US

• Oilseeds – Soyabeans: Despite poor weather at times, Argentina and Brazil to harvest bumper 2012/13 crops – USDA projects US crop at 93m t (+13% y/y) in 2013/14 on improved (record) yields – As with maize, Brazil to remain a strong competitor, but logistics remain a challenge

• Rice – Thai export prices high, South Asia and Vietnam compete – China was an unexpectedly big buyer in 2012, and may be again in 2013 – Exporters’ stocks appear comfortable

9