What is in this article?:
- Analysis shows grain trade should grow rapidly
- Much growth will have occurred by 2030
• Global trade flow must adjust to meet demand in regions where population is growing fastest, but are not self-sufficient in wheat, corn and soybeans.
Much growth will have occurred by 2030
Tracy said the FAO data indicates much of the expected population growth will have occurred by 2030. In that case, he noted, wheat trade is likely to grow by 50 percent from 124 million metric tons (MMT) to 190 million MMT by that time. Tracy said USW also expects similar growth for corn and soybeans.
Feed grain demand can be attributed in part to population, but also to rising income and subsequent increased meat consumption in developing nations. Together, world trade in all three grains should grow from 310 MMT to 465 MMT by 2030, Tracy said.
"There are important implications in this expansion for importers, for shippers, handlers and suppliers, and for wheat farmers in exporting countries," Tracy said.
"Importers will face more competition for exportable supplies and greater price volatility. That will place a premium on grain from reliable sources of supply, such as the United States. Rising trade volume for all three grains will strain export facilities and create opportunities for exporters willing to make new investments using public or private resources.
Technology providers will see growing demand for improved varieties.
Grain growers will see higher prices on average because competition between the major crops for planted area will only grow stronger."
It is relevant to note that FAO recently said it expects world grains production to rise to new records thanks to increased planting and higher yields. However, FAO said world prices are expected to remain high and volatile due to low stocks.
Governments will also feel the strain from such growth, including infrastructure investments and the politics of food, Tracy said.
Some governments may react to that expected volatility by trying to protect consumers through trade intervention; when liberalizing trade policies would, USW contends, create longer-term economic opportunity.
The obvious example is the Russian government loudly touting the country as a committed grain exporter in 2009 then shutting down its exports without warning — and leaving many customers unprotected — less than a year later.