World Grain - March 2024 - 22

FEATURE: A YEAR OF RISK AND UNCERTAINTY
If the eurozone is set to recover slightly, this inflation
and the ongoing wealth catch-up should boost
purchasing power and support consumer spending.
Isabelle Job-Bazille, chief economist, Credit Agricole SA
whether commodities contracts were doing their job.
Scott Wellcome, director, grains risk management,
GoodMills, said " they work very well, " but conceded that
" maybe in Europe we could do with an additional contract, "
which would be for wheat.
Volodymyr Korchun, head of Trading, LNZ, also
thought that the exchanges work " well enough. "
" You just have to accept the rule of how it works, " he
said. " If you understand the risks, you know how to manage
them. "
we are monitoring. Feeding a growing population has required
more resources, more land has had an impact on
the environment. Agriculture is responsible for 33% of
greenhouse gas emissions. "
Dr. Mark Jekanowski, chairman of the USDA's World
Agricultural Outlook Board, reminded delegates that
" by design we are always just looking at the short term, "
which means his focus is not on the long-term effects of
climate change.
Weather is a major factor in production forecasts, in
particular La Niña and El Niño, he said. Because of El
Niño, he foresees dry conditions in northern Brazil.
" When you look over the past 30 or more years, these
cycles seem to be getting more extreme, " he said.
Katharina Geiger, policy adviser for crop production
for German farmers' union Deutscher Bauernverband
E.V., discussed her members' weather problems in a very
extreme 2023. In spring, there was " heavy and persistent
rainfall, " then " in the summer, hardly any rain. " At harvest
time, it rained again.
" The quality also suffers, " she explained. " Sandy soils
are no longer used for arable farming. "
Germany, like France, is producing more chickpeas and
soybeans, with Germany supporting both under a national
strategy to encourage the production of vegetable protein.
" We have more biodiversity in the fields because of the
Scott
Wellcome,
director,
grains risk
management,
GoodMills,
discussed
commodity
contracts
during the
conference.
The Ukraine-based trader added that " we have to win
the war. "
Wellcome rejected Funnell's suggestion that the
European MATIF commodities exchange is " broken. "
" There are possibilities for the improvement, "
Wellcome said. " The liquidity is there. "
Filipe Gonzaga, managing director of Swiss-based
commodities trader Bryce, called the contract " a conversation
starter. "
" It's the best for Ukrainian rapeseed, " said Korchun,
describing MATIF's prices as " well correlated, " with his
home market.
Wellcome added that there is a " need (for MATIF) to
get some delivery points outside of France. "
Denis Drechsler, project manager, G20 Agricultural
Market Information System (AMIS), moderating a session
on the weather market and climate risk, said that
" climate change is, of course, one of the risk factors that
22
new crops, " she said. " Farmers are creative, but they also
need new technology to move on. "
Jekanowski said the United States has put a lot of effort
into coming up with programs to mitigate climate change,
giving electric vehicles and renewable fuel as examples.
" More recently, the Biden-Harris administration is
pretty clear they have a goal of making us net-zero by
2050, " he said. " The agricultural sector is really viewed
more as part of the solution than part of the problem, " he
said, with a " focus on helping farmers adopt more climate
friendly practices. "
He wondered if " consumers might be prepared to pay
more for products if they know that they were produced in
a climate-smart way. "
Chris Lyddon is World Grain's European correspondent.
He may be contacted at: cajlyddon@gmail.com
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March 2024 / World Grain / World-Grain.com
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World Grain - March 2024

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