Grain prices are likely to continue to go up and down. Poorer countries in particular are affected by their dependency. Experts looked for answers at the annual “Global Grain” industry meeting.
The grain market is volatile and difficult to predict. The traders, financial experts and producers in Geneva agree on this point. You have to think more flexibly. What has happened in the past months and years could happen again, says Scott Wellcome. He is director of risk management at Good Mills, based in Vienna, one of the largest milling groups in Europe, which processes around 3 million tons of grain per year in seven countries.
Conflicts and crises influence the market
Wellcome’s job is to be able to predict price fluctuations on the market as well as possible. He expects prices to continue to rise and fall sharply in the coming year. The geopolitical tensions in Ukraine, the Middle East, Kosovo and China would have a major influence, as would the elections in the USA.
Weather phenomena or climate change would also affect harvests next year. But the big question is also: How is the economy and thus the consumption of grain developing? Depending on the situation, his mills are at capacity or not.
Poorer countries suffer the most
These are moderately good prospects for countries in the global south. They rely on cheap grain imports from the world market. Otherwise, they run the risk of food shortages. And if grain exports from Ukraine continue to be difficult or harvests fail, these countries will have a difficult time securing the necessary grain supplies.
Scott Wellcome from Good Mills also points out that if there is a shortage of supplies, producers of biofuels would fight with food processors over the grain.
Biofuel is often subsidized. Grain is sold to the highest bidders. And if fuel producers could pay more, they would get the grain. Using food for fuel is controversial worldwide. But money remains the most important driver in global grain trade.