The team of APK-Inform Agency continued the tradition of holding of the annual conference events in the key countries-importers of major types of agricultural products, and in March 2019 organized the international conference Middle East Grains & Oils Congress, focused on the milestone events of the grain and oilseed market sectors, as well as the global trading prospects. On March 11-12, 2019, more than 200 delegates from 20 countries, the major global agrostars, as well as the unique speakers, gathered together in the heart of Egypt — Cairo, to discuss the main prospects and issues of the industry.
We decided to hold the fifth anniversary Middle East Grains & Oils Congress in Egypt, renewing the long-standing tradition of our first international conference in Sharm El Sheikh in 2006.
But why Egypt? The several recent season, the country became one of the main sales markets and the TOP-importer on the global market. Egypt is not only the dynamic growth of consumption of the main grain crops in terms of the constant growth of population, which makes the country as one of the main sales markets of grains from Ukraine and Russia, but also it brings the amazing market prospects in the sector of soybeans and edible oils. Thus, it is worth noting the active growth of the imports of soybeans (3.3 mln tonnes in 2018/19 MY, against 1.3 mln tonnes in 2015/16 MY) and sunflower oil (0.5 mln tonnes, against 300 thsd tonnes, respectively), which opens new prospects even for the USA in view of the recent developments and trade wars.
It should be no surprise that in the current year, the Cairo conference received many sponsors. Thus, TRANS-OIL GROUP, the leading agro-industrial holding of the Republic of Moldova, became the General Sponsor of the event. The company has a wide range of business activities, including farming, oilseeds crushing, grain handling and storage, the production of flour, international commodities trading, such as vegetable oils in bulk and bottled oil, etc. At the same time, United Oil Processing and Packaging, the Egyptian large-scale company-processors of fats and oilseed crops, became the Exclusive Sponsor. In addition, the following companies were the conference sponsors: COTECNA, Myande, Rohi Somon, Avellum, EFKO, as well as the group of companies UkrAgroCom and Hermes Trading.
The Minister of Supply and Internal Trade of Egypt, Dr. Ali El Mesalhy became the special guest of the conference, he made his welcoming speech in the official opening of the event, and highly appreciated the agenda and good organization level of the event. Also, the President of Trans-Oil Group of Companies, Vazha Dzhashi made a welcoming speech within the opening ceremony.
On the first day and the first session of Middle East Grains & Oils Congress, the participants focused on discussing the prospects and challenges of working on the Egyptian market and realization of the commercial activities. At the same time, within frames of the event the experts will consider the legal aspects of grain trading in the Middle East and North Africa region, the qualitative characteristics and testing methods of grain crops of various origin, as well as the latest international developments, and analysis methods of the projects within the current wave of innovations.
Thus, during his report the Senior grain pricing specialist at S&P Global Platts, James Colquhoun spoke about the features of effective risk hedging for grain market participants. According to him, the prices of Black Sea wheat, provided by S&P Global Platts, correlate to the quotations of the European grain on the Euronext stocks exchange at 66.9%, and to the US wheat on СВОТ — 58.7%, which allows reducing the basic risks in terms of wheat trading.
Also, the conference focused on digitalization of trading, as well as using of blockchain technology, which not only contributes to the active development of the grain segment, but also opens up new opportunities for traders. According to the CEO and Co-founder of ceREALIA, Andrei Grigorov, the blockchain technology has several advantages, which mainly provide the further reducing the transaction time, costs and risks, as well as building of trust between market participants. A.Grigorov reported that to date, the international trade in the market segment of grain crops is realized almost exclusively in one currency — USD. The market participants conclude a large number of commercially ineffective contracts, and there is observed the deficit of trade financing and effective solutions for small- and medium-scale businesses, which is the main problem in the grain trading segment.
Within the second session, the speakers paid attention to the rules for participation in tenders, and cooperation with the General Authority for Supply Commodities of Egypt (GASC), as well as the development methods of the river logistics as the key element for improvement of the competitiveness. Thus, during his report the Chief Executive of the Trading department at United Grain Company, Hesham Soliman said that in 2018, Egypt imported 12.3 mln tonnes of wheat, which became the second largest figures for 4 recent years, which came second only to the imports in 2017 (12.5 mln tonnes). At the same time, the private sector increased the grain purchasing volumes from foreign markets by 11% y-o-y, while the General Authority for Supply Commodities of Egypt (GASC) reduced the figures by almost 10%.
And within the third session, representatives of traders reported about the export potential of the Black Sea region, and the prospects of the season-2019/20 in such countries as Ukraine, France, Jordan and Lebanon. The Director at Golden Wheat for Grain Trading, Malak Al Akiely made one of the most interesting presentations. He spoke about the grain market of Jordan and its import prospects. According to the speaker, it is expected that Jordan will continue increasing the imports of grain crops (wheat and barley), and in 5 years the purchasing volumes will increase to 1.87 mln tonnes, against 1.7 mln tonnes in 2018. Therefore, Jordan will continue improving the logistics situation in the country. So, since April 2018 the country launched a new terminal to handle ships of the Panamax type (the transported cargoes increased from 50 thsd tonnes to 60 thsd tonnes), said the speaker.
Traditionally, the first day of the conference closed with the top-quality gala dinner in honor of participants of the event, with unceasing debates about the prospects of the new grain season, in terms of the noisy night of Cairo.
However, the conference agenda did not ended, and on March 12 all participants of the event received next session, which focused on the global market of oilseeds and by-products.
The Director of LMC International, David Jackson, told the conference participants about the following price trends of vegetable oils in the new season, as well as the high competition rates in the segment of edible oils. Also, the expert mentioned the MENA region (Middle East and North Africa), and specified that due to some remoteness from the Asian palm oil market, countries of the region can reorient its industries and increase the purchasing and consumption figures of other edible oils.
The Commercial Director of Trans Oil, Tamaz Dzhashi reported about the record harvest of sunflower seed in Moldova in the current season. According to the speaker, for 10 recent years Moldova increased the planted areas under sunflower seed in 1.5 times — to 362 thsd ha. Various experts estimated the limit of the indicator for the country at 400 thsd ha.
Generally, the country processes 34% of produced sunflower seed, as well as exports 66% of the volumes. Trans Oil processes 90% of the reporting share of 34%, and already became the absolute leader on the domestic market, and also exports 99.5% of the general shipment volumes of sunflower oil from Moldova. The list of major export destinations for Moldova includes Turkey with the share of supplies at 51.5%, Romania (40.7%), Bulgaria (5.2%), Poland (0.1%), and other countries (2.2%).
The Secretary General at the International Sunflower Oil Association (ISOA), as well as the Marketing Director at APK-Inform Agency, Svitlana Synkovska made the final report of the conference, and professionally told about the global market of sunflower seed and sunflower oil.
For 10 recent years, Ukraine moved from the status of the third largest country-producer of sunflower oil on the global market, to the leading status in 2017/18 MY, with the share of 32% (5.7 mln tonnes), surpassing Russia and the EU, which in 2007/08 MY took the 1st and 2nd positions respectively, in terms of production.
The conference completed with the heated discussion of participants of the event about the trends of the new grain and oilseed seasons over coffee and bagels on the terrace overlooking the beautiful Nile river.
Summing up the results of the successful event, it should be noted that both Egyptian and Black Sea companies received new prospects and opportunities for building mutually beneficial cooperation in the new season, and APK-Inform Agency will contribute to their further development.
We look forward to seeing you in Egypt next year!
Polina Kalaida, APK-Inform Agency
