Weak consumption growth weighs on grains
By Emiko Terazono
S
luggish consumption growth
and plentiful supplies of grains and
oilseeds will continue to weigh on world
agricultural markets for the next decade
according to a long term forecast from
Informa Economics.
The downbeat prognosis from the
closely followed agricultural researchers,
which predicts that “a low-price
environment for grains and oilseeds will
persist”, will be bad news for growers,
traders and agribusinesses providing
seeds, fertilisers and pesticides.
“It’s a very subdued forecast,” said
Scott Richman, senior vice-president at
Informa Economics of Memphis in the
USA.
However, lower food inflation will
be welcome news for livestock and
poultry groups, food companies and
consumers who have endured a run-up
in agricultural raw material prices in the
past decade.
Agricultural crops, such as maize
and soya beans, along with other
raw materials, rode the commodity
“supercycle” in the 10 years to 2012
supported by Chinese demand and
the rising use of grains and sugar for
biofuels.
Chinese economic growth has slowed,
however, while the country is also facing
demographic headwinds. Demand
growth for biofuels is also expected to
weaken.
For maize, annual average US maize
futures, currently at $144 a tonne, are
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November 2015
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