Political tensions, increased protectionism, and weather volatility will keep changing trade patterns. Sustainability, policy, and consumer trends are expected to continue to incentivise growth of organic grains and diversification of crop production toward more pulses.
Rabobank has released its World Grains & Oilseeds Map 2021, showing trade flows across the globe and key insights for the sector from the last five years. Its analysis reveals that, in this period, the global trade volume of all grains and oilseeds increased by about 120m metric tons at a 3.5 percent compound annual growth rate (CAGR). However, the pace of growth decreased when compared to the six percent CAGR, or 160m metric tons, of the previous five years. Although oilseed complex prices declined during this period, the upside in grain prices, coupled with the total trade volume increase, resulted in a 17 percent increase in the total value of flows.
'Income and population are expected to continue to drive long-term growth in trade flows, while changes in consumer dietary habits might cause further shifts in those flows,' according to Vito Martielli, Senior Analyst – Grains & Oilseeds for Rabobank. 'Moreover, the growing movement toward protectionism could undermine the benefits of international trade, which is crucial to food security,' Mr Martielli adds.
Key Changes in Trade Destinations
Rabobank's analysis shows Africa as the rising grains and oilseeds importer. The main agricultural commodities imported into the continent are wheat, corn, rice, soybeans, and palm oil. Egypt has become a key importer of feed grains and oilseeds, driven by a large population and growing feed demand.
China's rising feed demand is shifting grain and oilseed trade flows. 'Low Chinese corn inventories and rising feed demand are the key drivers behind higher Chinese imports of corn and soybeans, and this is expected to continue, with annual imports potentially exceeding 30m metric tons,' explains Maria Afonso, Senior Analyst – Sugar, Grains & Oilseeds for Rabobank.
Meanwhile, alternative proteins appear as a new driver, but with no impact on pulses trade yet. While growth rates in alternative proteins are strong, the vast majority of pulses go to feed and (traditional) food.
Key Changes in Trade Origins
During the next ten years, Brazil's future production growth is expected to continue to take the lead above the US and Argentina as a result of positive farm margins and land availability. 'We estimate Brazil's soybean production will reach 155m metric tons by 2030, vs. 122m in 2019/20, with soybean area growth likely to come at the expense of underutilised pastureland,' says Ms Afonso. Meanwhile, Brazil's export terminals in the Northern Arc will help to ensure the future flow of exports.
The Danube and Black Sea Region has emerged as the third-largest G&O-exporting region worldwide, after the US and Brazil. By 2030, this region will further strengthen its position due to a number of aspects: its strategic location close to large-consuming and fast-growing regions, strong price competitiveness, good-quality soil, and sufficient growth potential in land bank and yields.
Government Policies, Sustainability, and Organic Grains and Oilseeds Production
'Sustainable farming practices are moving quickly to centre stage, as agricultural policies are changing to increase sustainability, organic farming, and/or reduce carbon emissions,' explains Mr Martielli. Climate policy is a top priority around the world. The EU is on schedule to implement the new Farm-to-Fork strategy as part of the Green Deal, which includes a goal of 25 percent organic land use by 2030.
For more information about Rabobank visit their website, HERE.
The Global Miller
This blog is maintained by The Global Miller staff and is supported by the magazine Milling and Grain
which is published by Perendale Publishers Limited.
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