South Africa is one of the key players in global grain markets and its footprint is clear in the international forums such as the International Grain Council.

The grain trusts for winter cereals and maize annually nominates individuals to attend and represent the industry in some of these international engagements. This year, I was amongst the privileged ones to attend the 2016 International Grains Council Conference in London, UK.

The main theme of the conference was “Changing dynamics: the new trading environment”. Under this theme, we received contributions from all major grain producing countries, such as the United States of America, China, Ireland, Australia, the Black Sea region, the European Union amongst others.

Five key themes stood out in the conference presentations, and these include:
(1) The rising concern about climate change and its effects in grain production
(2) Changing dynamics in the global grain supply and demand
(3) Genetically modified crop regulations
(4) Agricultural policies (subsidies and price-support measures) and
(5) International trade agreements

In discussions with analysts and experts, there were growing concerns about the scarcity of white maize supplies in the global market, in light of the current drought in Southern Africa. With regards to this, indications seemed to be pointing to Mexico and the United States; as other grain producing countries are mainly focused on yellow maize production.

However, on a positive note, the global grain market will be well supplied in the 2016/17 season, with global grain production estimated at 2 billion tons, up by 1% from the previous season.  In addition, the 2016/17 global grain stocks are forecast at 474 million tons, up by 1.3% from the previous season.

Global consumption is also expected to maintain an upward trend, largely supported by increasing demand for wheat, particularly in North Africa and the Asian markets.  In essence, global grain prices are expected to move sideways in the short-to-medium term, with lingering uncertainty around the possibility of La Nina occurrence and the effects thereof in the Northern Hemisphere.

All presentations from the conference are available to download from the Agbiz website»

I would like to express a special thanks to the Winter Cereal Trust and the Maize Trust for affording me the opportunity to attend this event.

Wandile Siholobo
*Wandile Sihlobo is an economist and Head of Agribusiness Intelligence at Agbiz.