In the current season, the global market of agricultural crops is experiencing many difficulties, due to the weather conditions, political differences between the main trading partners, as well as the production rates of raw materials, declared the Emeritus Professor of Agricultural & Applied Economics of the Food and Agricultural Policy Research Institute at the University of Missouri (FAPRI), William H. Meyers during his report at the conference Grain & Maritime Days in Odessa-2019, on May 30.
In particular, for 5 recent seasons the yield figures of the major crops exceeded the average annual level, which made the constant pressure on the prices on the global market of crops.
At the same time, in the current season the trend is especially topical for the global soybean market, which also appeared under the strong pressure, in terms of the running trade dispute between the USA and China, which led to the significant decrease in trading operations between the countries and the shift of trade flows.
In the period of 2010-2017, the annual imports of agricultural products to China in monetary terms totaled nearly 21.6 bln USD, including 12.6 bln USD of soybean imports from the USA (54% of the general imports), and 3.2 bln USD — the imports of other grains and oilseeds (cottonseed, sorghum, corn, wheat, rice). However, in 2018 in terms of the trade conflict, China reduced the imports of US agricultural products to 9.2 bln USD, the speaker explained.
The expert added that the political confrontations between the countries also led to the fact that in 2018/19 MY (July-February), the price spread between soybeans from the USA and the Brazilian oilseed increased to 48 USD/t, while the average annual rates total 17 USD/t.
It is worth noting that in the global trade of grains and oilseeds in the structure of the export geography, for 30 recent years there were observed significant transformations, and developing countries still continue increasing the share of supplies of agricultural and food goods on the global market, while the US share in the global exports almost halved, said W.Meyers, and noted that Ukraine gas already become much more reliable supplier of grains on the global market.