Miller Magazine Issue: 121 January 2020

43 COVER STORY MILLER / JANUARY 2020 A few years ago, the global grain markets could be described as relatively predictable. The prices react- ed especially to the jolts of the weather. However, in recent years the grain markets faced increased volatility. The markets are bracing for additional uncertainties beyond their own fundamentals. Price volatility makes planning for farmers and buyers the world over extremely difficult. In this first issue of 2020, we tried to give further insight into the factors causing market volatility. Grain is of utmost importance for world agriculture and sustainable food security. International grain trade is dynamic and represents about 10% of global trade in food products. According to the International Grains Council (IGC), grain trade is expected to reach a new all-time high of 375m t (+3% y/y) in 2019/2020. At 2,162m t, world total grains production in 2019/20 was forecast to rise by 1% y/y, as bigger crops of wheat and barley were seen outweighing a decline for maize. Total grains consumption was also predicted to climb to a new high of 2,188m t. A few years ago, the grain markets could be described as ‘flat’ and rela- tively predictable. The prices reacted especially to the jolts of the weather. Grain markets are bracing for some additional uncertainties beyond their own fundamentals. Macroeconomic and geopolitics affect grain markets. They directly affect production and related costs, with demand, exports, imports and ending stocks adjusting while markets find a new equilibrium. Higher oil and freight costs and financial markets have increased their share of volatility. As for the jolts of the weather, they are now more fre- quent with larger amplitude due to global warming and stronger reactions CHALLENGES OF THE INTERNATIONAL GRAIN TRADE