Miller Magazine Issue: 143 November 2021

76 INTERVIEW MILLER / november 2021 are worried because of the prices and the freight as well. And they're buying a lot. So we have some supply prob- lems. We have strong demand and the market is rallying. Based on our models, as I said $330, perhaps 350 looks like a reasonable target. I also suggest watching news from Russia closely – we see a growing number of statements for domestic indus- tries asking the government to regulate exports addi- tionally. This starts to painfully remind us the end of 2020 when it transformed into export taxes. We believe that at this stage risk of additional restrictions is low but I think we will see some speculations around this helping bulls. The biggest question at this stage, I think is Chinese demand. Their demand was pretty strong not just for wheat but also for corn. I think it was the biggest driver in the previous grain season. And now there is a big ques- tion mark over the demand in the 2021-2022 season for corn. If China decides to cut corn imports substantially in the new season from record-high 28 mmt a yaer earlier that will put pressure on global grain prices. …Good corn crop in the US, and a record-high corn crop in Ukraine, and demand from China all looks pretty weak. And that is the biggest bearish factor at this stage in my view. I think an additional factor will be the new crop in the southern hemisphere. The outlook for the new Australian crop is pretty good. And if they harvest another bumper crop in this season again, it will likely cool down the wheat market as well. But there is a lot of time before that crop. For now, I think Chinese demand for corn is the biggest bearish story. NEXT YEAR COULD BE A MORE CHALLENGING Another hot topic is the worldwide shipping con- tainer shortage. A lack of available shipping contain- ers has become a crisis. Do you think the shipping container shortage will continue next year? I'm not an expert in containers and freight. However, I would just comment on a broader perspective. In 2020, the global market, all the world population was pretty concerned about food security, because of the first wave of COVID-19. Many pol- iticians, many people all over the world were worried about the consequences of the pandemic and all those lockdowns. But now we can say that humanity did a relatively good job. No big problems with supply chains…No hunger…Nothing like that. But in reality, I think 2021, perhaps 2022 could be a more chal- lenging period. We know more or less now how to deal with the COVID. But we have substantially higher prices for food grains, substantially higher wheat prices. While we have strong demand, there are some problems with the supply of wheat in the Northern Hemisphere. And on top of that, back to your initial question, we have some problems with freight and con- tainers. So I think in 2021 and 2022, we could see some huge problems of food security in big poor grain importer nations be- cause their food bills are rising substantially. And I think it could continue till 2022 crop. That's a big problem. The world was concerned in 2020 and but now it's kind of feels like everyone is okay. COVID is still a big story but we survived. However, I am afraid that big problems are ahead of us. In real terms global food prices just have returned to all-time highs, as per FAO. We saw similar high food pric- es at the end of 2010. The Arab Spring started in 2011. * This interview was conducted on October 5, 2021.