World Grain - November 2009 - 68

FEATURE: BLACK SEA HAS ANSWER TO FUTURE GRAIN NEEDS

Attention
Qualiﬁed Readers!
Validate your FREE
subscription to World Grain.
It's easy to register by
phone, email or log on to
our website. You can then
be certain to be on top of all
the important developments
and information featured in
upcoming issues.
Call:
1-816-756-1000
Email:
jarnone@sosland.com
Log on:
www.world-grain.com
Notice: If this is not
your copy of
World Grain, don't
wait for the next issue
to eventually reach your
desk - call today
to see if you qualify for
your own copy.

All-Digital delivery
now available!

Bentley

would face. In the long term, the biggest
challenge was infrastructure, with the
poor condition of rail links to ports adding to supply chain costs. He put the cost
of getting from the farm to f.o.b. at $65
a tonne. "They're actually discussing
increasing the amount of rolling stock,"
he said. "They're taking control."
In the short term, the region is a
victim of its own success, having expanded area at a time when stocks have
risen. He expected demand growth to
cure the problem.
For now, any extra expansion is more
likely to come from increased yield as
land is taken over by bigger, more efficient farms. "As you transfer land from
traditional enterprises to more modern
enterprises, you roughly double yields,"
he said.
A recovery in livestock production
will also play a role in encouraging
more wheat production. "As livestock
recovers slowly, you'll start to see domestic grain area recover in this part of
the world," he said.
The events of the last two years
could have been dramatically different.
"If we hadn't had a financial crisis and
the Black Sea hadn't responded, you
would have seen prices you wouldn't
believe," he said. He suggested that
the U.S. would have responded by curtailing biofuel production to put more

grain onto the market.
"At $100 a tonne, they're going to
remain a low cost and important source
for wheat," he said.
He was concerned about what might
happen to Russia's big grain stocks.
"In the near term, there's eight million tonnes of wheat sitting in Russia
that they don't actually want to hold,"
he said.
The Russians were watching the construction of two big ethanol plants, currently under way in Britain, with interest. The British government has been
getting worried about where food is
coming from and its Department for the
Environment, Food and Rural Affairs
has been looking closely at the situation.
"More, not less, trade is needed and agriculture must be allowed to respond to
world market signals," Susanna May,
deputy director of its Food and Farming
Group, told the conference. "Our openness to trade does make the U.K. very
resilient."
The agricultural industry has a good
record. "Global production consistently
outpaced global population," she said,
but still advised caution. "We can't be
complacent."
FERTILIZER COSTS EXPECTED TO RISE
"We believe that in 2010 nitrogen fertilizer prices will move upwards," Mari-

November 2009 / World Grain / www.World-Grain.com

http://www.world-grain.com http://www.World-Grain.com

World Grain - November 2009

Table of Contents for the Digital Edition of World Grain - November 2009