the world grain market and future expectations
TRANSCRIPT
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Volatility in Agri-
commodities
Frank Rijkers Agrifood and Agri commodities
Economist
ABN AMRO Group Economics
November 2014
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Programme
Introduction
History of the grains market
Grains market drivers
The future and beyond
Time for discussion / questions
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Introduction
Frank Rijkers MSc.
sector economist – Agrifood & Agri-commodities
ABN AMRO Group Economics
tel: +31 20 628 64 37
e-mail: [email protected]
Visit also ABN AMRO Group Economics on the internet:
/
Your keynote speaker:
Information available at:
Group Economics
insights.abnamro.nl/en
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Introduction: About ABN AMRO Bank NV
4
ABN AMRO Bank N.V.
Corporate Banking Focus on Medium and large enterprises with a worldwide
customer database
Commercial Clients
Capital Markets Solutions
International Clients
ABN AMRO
Commercial Finance ABN AMRO Lease
Retail & Private Banking Focus on consumers and small enterprises within the Dutch
Economy
Retail
Banking
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Banking
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Servies
ABN AMRO
Private Banking
MeesPierson
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History of the grains
market
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Price development since mid 13th century
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Grain prices in the 21st century
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0
50
100
150
200
250
300
350
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Stable or not?
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Grain prices in the 21st century
Decreasing stocks
Food crisis
Economic and population growth
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Development of grain stocks
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0
100
200
300
400
500
600
700
1990/91 1994/95 1998/99 2002/03 2006/07 2010/11 2014/15
(mill
ion tonnes)
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Food Crisis
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Higher oil prices
Use of biofuel
Demand for variety in diet (Asia)
Drought in production areas
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Food crisis
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Oil price Usage of Renewable energy
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Food crisis
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Is this the way we look at food?
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Food crisis
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Variety in diet
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Food crisis
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Extreme drought in production areas
Export bans and restrictions
Less availability
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Food crisis
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Emotion and rationale lead to price increase
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Grains market drivers
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Grain market drivers
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0
500
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2500
production consumption
Supply vs. demand
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Supply potential coming years
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Chinese growth in arable land
Arable land in other regions (Latin Americas, Africa)
New production techniques
World politics
others……(e.g.: geo-politics)
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Supply potential coming years
But the most important production factor is…..
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The weather
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The future and beyond
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The future and beyond
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Higher volatility through:
Supply/Demand
Technical analysis
Sentiment
Broker trading
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The future and beyond
Volatility is not new
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The future and beyond
Availability of water
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The future and beyond
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0
1
2
3
4
5
6
1960 1965 1970 1975 1980 1985 1990 1995 2000 2005
Avera
ge a
nnual yie
ld g
row
th
per
hecta
re (
%)
Wheat Corn
Weakening in worldwide production growth per hectare
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The future and beyond
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But there is still growth in total production
0
0,5
1
1,5
2
2,5
3
3,5
4
OESO BRIC Developingcountries
Others World
Annual gro
wth
in
agricultura
l pro
ductio
n (
%)
2002-11 2012-21
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The future and beyond
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Population growth
World population
% living in cities
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The future and beyond
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Growing world population:
More need for food and feed
Increasing demand for protein
Less arable land
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The future and beyond
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Economic growth:
Higher incomes
Increasing demand for protein
Changing variety in diet
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The future and beyond
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Change in Economic growth in BRIC-countries
-6,00
-5,00
-4,00
-3,00
-2,00
-1,00
0,00
-2,00
-1,80
-1,60
-1,40
-1,20
-1,00
-0,80
-0,60
-0,40
-0,20
0,00
Change o
f price (
%)
Decre
ase in
pro
ductio
n o
r use (
%)
Production Consumption Price (rha)
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The future and beyond
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The future and beyond
Worldwide wheat supply will fit the increasing demand
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-
5
10
15
20
25
30
35
40
0
100
200
300
400
500
600
700
800
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020
sto
cks-t
o-u
se
(%
)
x m
illio
n to
nn
es
United States India China EU Russia Others Stocks (rha)
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The future and beyond
Worldwide corn and other grains supply will fit the increasing demand, but stocks
are slightly decreasing
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-
5
10
15
20
25
30
35
0
200
400
600
800
1000
1200
1400
1600
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020
sto
ck
s-t
o-u
se
(%
)
X m
ilio
n t
on
nes
United States India China EU Russia others Stocks (rha)
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The future and beyond
Price forecasts
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0
100
200
300
400
500
600
700
Wheat Corn Sugar
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Further information
Frank Rijkers MSc.
sector economist – Agrifood & Agri-commodities
ABN AMRO Group Economics
tel: +31 20 628 64 37
e-mail: [email protected]
Visit also ABN AMRO Group Economics on the internet:
/
Your keynote speaker:
Information available at:
Group Economics
insights.abnamro.nl/en
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Questions?
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Thanks for your attention!