Miller Magazine Issue: 145 January 2022

68 INTERVIEW MILLER / january 2022 Interview: Namık Kemal Parlak 2021 has been a very volatile year for the grain mar- kets. In many regions, extreme weather events such as heavy rains, drought and frost have adversely affected the crop. The increase in the cost of energy, the growth in the demand for biofuels, the record levels in fertilizer prices caused the prices to reach record highs. Panic purchases and the tendency to keep stocks increased by rising prices also boosted the prices. This has in- creased the pressure on supply chains. Freight rates for major exporters have increased by more than 40 per- cent due to supply chain bottlenecks and tight supplies of cargo ships. Some countries have implemented trade policies intended to mitigate the effects of rising food prices. These restrictive policies further increased the volatility in the grain markets. So, what awaits us in 2022? Will the volatility in the markets continue? Will the markets enter more stable waters? Will prices return to pre-pandemic levels? What will be the key factors affecting the wheat prices in the coming months? We asked these questions to Matt Ammermann, com- modity risk manager at StoneX. Working at the forefront of risk management in one of the fastest and largest growing agricultural markets in the world, he provides risk management solutions to help improve and control margins and the impact of commodity prices to a busi- ness’s operation. For the past decade, Mr. Ammermann has been working in the region with producers, traders, exporters, crushers, millers, and consumers from all commodity groups helping to guide them on how to ef- fectively manage their price risk. Here are Mr. Ammermann’s answers to Miller Magazine: 2021 has been unprecedented and volatile for grain markets. High prices, extreme weather conditions, logistical bottlenecks…Grain prices have reached re- cord highs. What are the key factors that have driven the market in 2021? Yes, you are right- many factors to consider for 2021, but I think the main driver for it all has remained the con- tinued actions out of response to the seemingly nev- er-ending pandemic. Federal reserves around the world “I do expect the volatility to continue, not only from a fundamental perspective but also from a monetary and fiscal policy perspective as well. Various FED’s have increased money supply to combat the pandemic, but now as we get into 2022 they have started to communicate reducing their stimulus efforts…I think the largest factor over the com- ing months will be what spring weather and fresh speculative money flows.” Grain market volatility to continue in 2022 Matt Ammermann Commodity Risk Manager VicePresident Eastern Europe/Black Sea Region StoneX