Miller Magazine Issue: 145 January 2022

63 COVER STORY MILLER / january 2022 According to Nikkei Asia, over the past five years China's soybean, corn and wheat imports soared two- to twelvefold on aggressive pur- chases from the U.S., Brazil and other suppliers. Imports of beef, pork, dairy and fruit jumped two- to fivefold. As a result of this massive Chinese shopping spree, food prices shoot up worldwide. The food price index, calculated by the U.N. Food and Agricul- ture Organization, in November was about 30% higher than a year earlier. "Hoarding by China is one reason for rising prices," said Akio Shibata, presi- dent of the Natural Resource Research Institute in Tochigi Prefecture, Japan. Hence, despite the record outlook by the International Grains Coun- cil for world total grains production in 2021/22 estimated at 2287 million tons (compared to2212million tons a year ago), theglobal consumption this year is also record high at 2290 million tons (2226m last year) and end stocks 2021/22 are predicted at 600 million tons (602m last year). A couple of years ago the grainmarkets could have been touted as rel- atively flat and predictable. Nowadays industrial users around the globe, such as millers, animal feed compound producers, crushers and the like, are coping with unprecedented volatility, with grain prices sharply up this crop season. At the same time, prices of other commodities are alsomov- ing higher, including energy, which affects production costs, as well as the price of farm inputs such as fertilizers and plant protection products. Speaking of fertilizers, let’s look at the benchmark NPK - global fer- tilizer demand weighted index for N (Nitrogen), P (Phosphorus) and K (Potassium), which are three essential nutrients for plant growth. NPK index is ending 2021 with a bang. Is it a harbinger of further input in- creases for 2022? Crystal ball would come handy for prediction pur- poses as NPK index has exceeded boldest expectations and, yet, keeps going like an Energizer Bunny. Citius, altius, fortius! or, could it be that an imminent correction is forthcoming? In the meantime, grain market players turn attention to the new crop. Jordan, the second largest buyer of wheat, is already buying new crop Romanian wheat for June 15 delivery knowing that the new Romanian crop is quoted 10-15 USD/mt lower than other Black Sea ori- gins to attract potential buyers. The promise of a great new year ahead at the end of the current year ismotivating and sows the seeds of right attitude in each and every market player. Besides keep- ing an eye on the good old fundamentals and closely following the weather and the geopolitical tides, think- ing out of the box and trying to come up with good new ideas will give everyone a good chance to be rewarded in the next year. Somuch for the good intentions. Cheers to another challenging, yet great year ahead! E-mail: Natalja.Skuratovic@cesco-group.com