Interviews with grain and oilseeds market leaders
INTL FCStone
Published August 2017
Global Grain (GG): As the Macri administration continues to battle high domestic inflation, do you envisage an increase in foreign agricultural investment in Argentina? If so, in which segment of the supply chain?
Gonzalo Terracini (GT): We believe Argentina will continue to be as one of the top agri producers around the globe when we talk about production/crushing, the challenge here is, if Macri´s administration can make it happen, move forward to the next step adding value is key.
GG: Is technology a potential growth area for Argentina? Which crops and market segments would benefit from investment most?
GT: Yes, we do believe there is a potential in: biotechnology, crop protection and renewable fuels and wind energy...
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Voytek Chelkowski, Founder and Managing Director, Seamind Pte
Published May 2016
Global Grain (GG): What is the best strategy for grain companies in the current freight market?
Voytek Chelkowksi (VC): Strategy has to start with awareness of where we are at the moment. We are trading at the lowest pricing environment in living memory and importantly, it's the lowest pricing environment in two segments that affect the freight. Firstly the time chartered market and then the crude oil market. So you want to see how you can lock in these low prices, preferably with an option to liquidate as and when the right opportunity comes.
Additionally, you want to become aware of the risk. One of the greatest risks that the current market environment creates is the fact that a number of companies that have been in business for decades have gone insolvent...
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Wang Ling, Managing Director, COFCO Future
Published March 2016
Global Grain (GG): With Chinese wheat and corn production at record levels, how can the continued problem of increasing stockpiles be alleviated? Are subsidy reforms needed?
Wang Ling (WL): Currently, China’s stock of oils, corn and grains are all at record high levels, of which the corn stock is above 240 million tons and rapeseed oil stock is 6.21 million tons. The state shows strong resolution to reduce stock.
It has been reducing subsidy to alleviate the problem of increasing stockpiles, aiming to reduce farmers’ incentive and gradually reduce production and stock. For instance, rumour has it that subsidy for corn temporary reserve is decreased to 1400 Yuan/ton which is much lower than this year’s 2000 Yuan/ton.
Meanwhile, the cost of State Reserve purchase for rapeseed oil reached above 10700 Yuan/ton while the transaction price for 2011 rapeseed oil on the auction in 2015 was at 5300 Yuan/ton...
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Kyle Tapley, SeniorAgricultural Meteorologist, WeatherServices, MDA Information Systems LLC
Published November 2015
Global Grain (GG): What do you see as the two most important issues globally currently and why? How will this impact the market?
Kyle Tapley (KT): From a weather perspective, the current El Niño event, which is likely to rank as the strongest since at least 1997, is the most important issue for the grains market. El Niño, a warming of sea surfact temperatures in the equatorial Pacific Ocean, changes weather patterns globally, including in many of the largest grains producing regions of the world. Generally, El Niño events have a positive impact on grain yields and production, due to more favourable weather conditions in areas such as South America and the United States...
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Swithun Still, Director, Solaris Commodities S.A.
Published November 2015
Global Grain (GG): What can we expect from the Black Sea region going forward and how will it affect the global grain industry?
Swithun Still (SS): The Black Sea region has been as ever the focus of the new crop this summer as yet another large crop was harvested despite political uncertainties and unrest in the area. Russia has reaped almost 100 million tonnes of grain of which approximately 58 million tonnes of wheat has dominated its traditional markets of Egypt and Turkey as well as further afield. Ukraine's corn crop is estimated to be smaller than last year, but nevertheless a sizeable 25 million tonnes (as at 20th August) which should lead to a sizeable export programme of around 17 million tonnes...
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Voytek Chelkowski, Managing Director, Seamind Pte Ltd
Published November 2015
Global Grain (GG): What are the major issues affecting pricing of grain freight?
Voytek Chelkowski (VC): Grain freight rates are driven by the two major cost components: the cost of time charter and the cost of fuel. Time charter markets: With its ocean-borne imports representing more than half of the global dry bulk demand, China remains in the forefront of issues dominating the time charter rates. It is a foregone conclusion, the industrial growth that drove the Chinese ocean-borne dry bulk immports to 1.5 billion tons in 2014 (making up more than half of the global dry bulk demand) cannot be sustained. The question seems to be not "if" but "when", "how smoothly", and "to what extent" the growth of demand will slow down. The answer will depend on how seamlessly the Chinese government manages the transition to the economy that is driven by...
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Marcelo Neri and Arthur da Anunciação Neto, Alphamar
Published November 2015
Global Grain (GG): Where will the opportunities lie for traders, producers and end-users?
Alphamar: Traders: Federal Government has passed a new Port legislation, which also states new parameters for port concessions. This law aims at increasing the investment in Private Terminals, which do not need to own the cargo anymore, opening space for companies focused on origination and elevation logistics, negotiation long term or spot contracts with trading companies, allowing newcomers to our market and granting opportunity for major local producers to acquire static capacity in the ports and pursue final buyers for their commodities...
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