Miller Magazine Issue: 117 September 2019

75 INTERVIEW MILLER / SEPTEMBER 2019 Pedro H. Dejneka, a well-known commodity mar- kets consultant focused on Latin America, gave an exclusive interview to Miller Magazine on the dy- namics of the international grain trade. He answered our questions regarding to the different aspects that influencing the agricultural commodity market and shared his insights on the future of the global grain market. Mr. Dejneka is a Partner and Co-Founder of MD Commodities, a global macroeconomic and agricultural commodity consulting firm with offices in Brazil and in the United States. He is one of the top international presenters on the subject. I had privileged to listened to him at the 16th Internation- al Conference ‘Black Sea Grain-2019’ by UkrAgro- Consult. He has an impressive communication skill and a deep knowledge of agricultural commodities and macroeconomy which makes him a sought-after speaker at the international events. What are the most important factors affecting global grain trade? Certainly, the current geopolitical environment is wreaking havoc and bringing much uncertainty to global grain trade. That, accompanied by the very fragile state of multiple major economies around the globe exacerbated by the unprecedented amount of debt all contribute to one of the most uncertain and volatile times in the history of the global grain trade. What kinds of changes you have been experienced in global grain trade recent- ly? Could you share your observations briefly? In recent years we have seen a major change in the somewhat opaque business model that once dominated grain and commodity trade around the world. The advent of technology and availability of public information, par- ticularly in the most recent 10-15 years, has diminished the “information walls” that once separated the large players from the rest. This resulted in more transpar- ency and the need for much better efficiency in search of sustainable margins. How U.S. trade disputes with China will develop? Can you share your opin- ion with us? This is literally and truly an “opinion” – as I do not believe anyone, not even those directly involved have the answer. We are seeing a “battle of wills” by leader- ships in both China and the U.S., with China holding their ground potentially betting on a loss by Trump in the 2020 Elections, while the U.S. side has gathered more than enough political and citizen support to not only hold strong but also adopt more aggressive in- itiatives. Relatively speaking, the U.S.’s economy is in much better shape to withstand a prolonged trade war, despite risking permanently losing market share in world agricultural trade. On the other hand, it is clear that both countries, and the global economy, would benefit from at least a prolonged trade truce if not an all-out deal. Unfortunately, it seems as though heels have been dug deep in the sand on both sides and at this time a deal within the next 12-18 months is seen as much more of an outlier than an expected outcome. Stable grain trade is crucial for global food se- curity. However, the trade war between the US and China showed that this trade is quite open to threats and at risk. What can be done for protect- ing the grain trade from such risks? Given how geographically diversified major grain production has become in the recent decade (think