VIEW FROM THE INDUSTRY: PROFITABILITY, SUSTAINABLE BUSINESS STRATEGY, GROWING GLOBAL DEMAND AND MORE
Interview with Stefan Vogel, Head of the Agri Commodities Markets Research Team and Global Sector Strategist for Grains & Oilseed, Rabobank
Published August 2018

Macro 

What do you see as the two most important issues globally currently and why? How will these impact the market?

1. Profitability: No business can sustain if they are not profitable. Costs, risk management and business strategies all play into it. Short-term market changes like the Trade Wars can have a massive impact on the business and even so the market currently looks closely at them, they will either fade away or become the new normal. Being prepared for those hard to predict changes and being able to adapt, is what makes a great company and might break those that don’t.
 

2. A sustainable business model and strategy: Markets are changing and roles of the players in those markets are also changing. What made money yesterday, might not generate much income in the future. Continuous evaluation of a company’s business model and future strategy is crucial. We have often seen that those companies that were willing to implement needed changes early and properly have strived.

Local

What do you think has been the biggest change in the grain and oilseed industry over the last 24-36 months?

Political decisions that sometimes have nothing to do with agri, but agri falls victim of them, have become dramatically more important to grain and oilseed markets.

 

Regional

What can we expect from the Black Sea region going forward and how will it affect the global grain industry?

Last year’s record crop and export volumes will in a few years be the standard. Growing global demand, especially in Africa and Asia, will need those volumes. For traders, this will continue to be a key origination region, and every other region needs to prepare to stay competitive by improving their costs or production and transportation and by delivering a product quality that is demanded by the consumer.

 

What impact do you think the geopolitics of twitter / Trump-China relations have had on the Brazilian and Argentina soybean market?

It increased the prices for soybeans, changes the seasonality of Brazilian exports, impacts therefore also the seasonality of corn exports (due to limitations in elevation capacity), but ultimately is difficult for maket participants to trade, as their remains a large risk that the next tweet could announce that the Chinese duties on US soybeans are removed again, which would change the pricing structure.

 

About you

If you weren't in the grain and oilseed/agricultural industry, what industry would have gone into?

The beverage industry. I love to work in the grain and oilseed space, but after long trips across the US Corn Belt, Mato Grosso or Western Australia, I get a bit jealous sometimes when I see my colleagues in the beverage space going to visit clients in beautiful vineyards in California, Portugal or Australia.

 

If you could take 3 things to a desert island that are not practical (i.e. a boat, rope or a knife) what would they be?

My family, my dog and a return ticket.

 

You can hear more from Stefan at Global Grain Geneva, taking place on 13-15 November 2018.