World Grain - July 2021 - 44

FEATURE: BLACK SEA EYES OPPORTUNITY IN CHINA
transformation from a labor-intensive model to a capital-intensive
model.
" A harvest of grain on the level of 65 million or 70
Nicolay
Gorbachev,
president of
the Ukrainian
Grain Union,
takes part
in a panel
discussion
during the
conference.
million tonnes, that is the result of substantial investment
(from) 2013 to 2017, " he said. " Technologies
play a bigger role. They can reduce the influence of
such factors as the weather and climate change. "
He was concerned, however, about a sharp fall in investment
in 2020, something he described as a global
trend, with investment flowing from agriculture into
the financial sector, including securities.
" Profitability is greater (and the) risks are very low, "
he said.
That left farmers' incomes as the main source of investment
in agriculture. Higher prices meant optimism
that farmers would be able to resume investment in
new technology.
" We agree with the USDA, the growth of yield and
exports will take place both in Ukraine and in Russia, "
he said, also noting increased Chinese demand for
maize, despite China's plans to replace the crop with
other feed ingredients.
Feofilov expected Ukrainian grain production to recover,
with new records possible.
He also highlighted food price inflation, which he
said was a direct consequence of the pandemic.
" Consumers globally have accumulated big volumes
of unused money, " he said. " Such deferred
consumption is set at $3 trillion to $4 trillion. That
is globally. "
He noted that in 2020 Brazil's poultry prices rose
by14%.
" That trend has prevailed in February and the growth
was 6%, " he said. " To overcome inflation, we need to
achieve a balance between supply and demand. "
Economic crisis impacts commodities
Philippe Chalmin, president of the French commodity
research institute Cyclope, told conference delegates
that " we are still in the midst of what can be called the
worst economic crisis since the 1930s, " with the world
running at almost -10% growth.
" The crisis has really profited China, " he said. " China
got out from the crisis as early as mid-2020. "
Large-scale spending has helped the United States
to recover as well, but Europe was still in crisis. Low
interest rates and a world " awash with cash, " meant
that many investors were looking for new types of
assets and turning to commodities. Prices were running
higher, although he hesitated to apply the label
" super cycle. "
" You can't say that there is a real super cycle, but for
many, many commodities we are with prices that are
almost at record-high levels, " Chalmin said.
He gave examples of other commodities where the
market has turned higher, such as non-ferrous metals,
which have recovered from lows in March 2020.
" This is Chinese consumption first and the fact that
everybody is looking at an energy transition that will
use less oil, with more electric cars, " he said. " When
you think of electricity, it uses copper. "
He also pointed to increases in the price of steel in
China as well as lumber.
" In the United States, 80% of the houses are made
of wood, " he explained. " Prices for lumber have been
multiplied by four because there is a boom in the building
industry.
" This is the explanation we find for many commodities.
We have a boom in demand and for the moment
the supply chain is still confronted with problems,
problems of production and, of course, also problems
of logistics. "
Prices are high for grains and oilseeds, but also
for animal products and sugar. He noted rising wheat
44
July 2021 / World Grain / World-Grain.com
http://www.World-Grain.com

World Grain - July 2021

Table of Contents for the Digital Edition of World Grain - July 2021

World Grain - July 2021 - Intro
World Grain - July 2021 - 1
World Grain - July 2021 - 2
World Grain - July 2021 - 3
World Grain - July 2021 - 4
World Grain - July 2021 - 5
World Grain - July 2021 - 6
World Grain - July 2021 - 7
World Grain - July 2021 - 8
World Grain - July 2021 - 9
World Grain - July 2021 - 10
World Grain - July 2021 - 11
World Grain - July 2021 - 12
World Grain - July 2021 - 13
World Grain - July 2021 - 14
World Grain - July 2021 - 15
World Grain - July 2021 - 16
World Grain - July 2021 - 17
World Grain - July 2021 - 18
World Grain - July 2021 - 19
World Grain - July 2021 - 20
World Grain - July 2021 - 21
World Grain - July 2021 - 22
World Grain - July 2021 - 23
World Grain - July 2021 - 24
World Grain - July 2021 - 25
World Grain - July 2021 - 26
World Grain - July 2021 - 27
World Grain - July 2021 - 28
World Grain - July 2021 - 29
World Grain - July 2021 - 30
World Grain - July 2021 - 31
World Grain - July 2021 - 32
World Grain - July 2021 - 33
World Grain - July 2021 - 34
World Grain - July 2021 - 35
World Grain - July 2021 - 36
World Grain - July 2021 - 37
World Grain - July 2021 - 38
World Grain - July 2021 - 39
World Grain - July 2021 - 40
World Grain - July 2021 - 41
World Grain - July 2021 - 42
World Grain - July 2021 - 43
World Grain - July 2021 - 44
World Grain - July 2021 - 45
World Grain - July 2021 - 46
World Grain - July 2021 - 47
World Grain - July 2021 - 48
World Grain - July 2021 - 49
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World Grain - July 2021 - 55
World Grain - July 2021 - 56
World Grain - July 2021 - 57
World Grain - July 2021 - 58
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World Grain - July 2021 - 60
World Grain - July 2021 - 61
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World Grain - July 2021 - 83
World Grain - July 2021 - 84
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