Challenges and Opportunities in Global Raw Materials Market Barbaros COREKOGLU Markets, Trade & Sustainability 28 June 2016 Porto, Portugal
Outline • COCERAL facts and figures • Global Market Situation – Global Weather Conditions – Global Grain Supply and Demand – Grain Stocks and Prices • European Union – General picture: Grain Production, Exports and Stocks; import needs • Global Developments • Challenges to Sourcing & Alternatives • Policy Challenges
30 Member Associations EU association representing the trade with 19 EU countries cereals, oilseeds, rice, feedstuffs, olive oil and 2 Associated: Switzerland and Serbia dcdceced agrosupply 2700 companies Grain merchants, storekeeper and/or international traders 26 Member Associations 18 EU countries Associated Members - Switzerland - Serbia - Euromalt - Euromaisiers 1 Extraordinary Member - Gafta TEXT HERE 3500 Companies
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Seasonal temperature anomaly during yield formation Source: Thomson Reuters
2016 Global Outlook for Crops
Global Grain Supply and Demand Source: IGC May Report
Global Market Situation World: Grain Stocks and Stocks-To-Use 700 40% Endbestand (Mio. t) 35.5% Verhältnis Endbestand zum 35% 31.7% Verbrauch, % 600 30% 500 24.2% 25% 22.2% 400 Mio. t 20% 300 15% 17.0% 15.3% 200 10% 100 5% 0 0% 72/73 74/75 76/77 78/79 80/81 82/83 84/85 86/87 88/89 90/91 92/93 94/95 96/97 98/99 00/01 02/03 04/05 06/07 08/09 10/11 12/13 14/15 16/17
Global Ending Stocks Converging… Source: World Agri S&D Estimates, June, FAS
EU Grains: Competitive and very comfortable situation (mln t) 350 300 250 200 Production 150 Exports Ending Stocks 100 44 42 50 35 34 34 31 30 30 27 27 25 0
EU Oilseeds: Structural deficit continues (mln t) Production: 33 million tonnes (of which 22 mln tonnes of rapeseed) Imports: 16 million tonnes (of which 13 mln tonnes of soybeans) + circa. 19 million tonnes of soybean meal per annum
Changing times, challenging times…
Bigger, but slower…
9.7 billion by 2050
Trade – ever more important…
…at times of shifting sands China policies build stocks Russia emerging as exporter Source: USDA
…at times of shifting sands Brazil exports revised upwards Source: USDA
“Stock” Taking • Climate change & increased weather variability • Limited new land area & no deforestation • Embracing new technologies – Improve plants’ resistance to increased pest hazards including weeds, insects, disease and too wet, too dry, too cold, too hot • Zero threshold and tolerance – Zero tolerance policy and asynchronous authorizations bear unbearable legal compliance risks – 1 incident = 50,000 tons corn/soy shipment = circa € 25 ml loss • Increased financial risk – Increased scrutiny & limitations to hedging • Letting trade work for the collective benefit – Low level presence • Electrification of vehicles vs. animal feed • Global gap in digestibility of meals
COCERAL: Working together to make trade work Thank you for your attention Website: http://www.coceral.com E-mail: secretariat@coceral.com
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