Market Update: 2016 Yields Higher Than 2015
Harvesting in most of the Northern Hemisphere production areas is more or less completed with huge production figures again being recorded.
The world is awash with grains and enjoying a time of plenty.
Exports on the Increase
The 2016/2017 export crop season is also now in full swing, with exports projected for this season to increase again over the previous year. All of the main agricultural commodity groups are predicted to be strong on volume, but the global economic landscape and present low pricing levels, due to an abundance of supply, bring different challenges for international trade.
This season is also proving to be very different to the last in terms of quality, as some countries experienced difficult circumstances during the cultivation period. In France, the wheat crop was particularly severely affected and basic parameters, like test weight, on normal contract levels are extremely difficult to achieve with the new crop. In the Black Sea regions, conditions were favourable for production, but once again late rains and a wetter than normal spell during the grain filling period has resulted in different quality expectations to the previous season, with high percentages of sprouted grains being seen in some regions.
All of this means that real attention to detail in contract terms is required. More knowledge and data about the specific quality circumstances country by country will enable smoother contract execution and delivery, in line with buyer expectations. At SGS we have been supporting traders with our Quality Map Service, which can give details, district by district, of the quality of crops actually harvested in specific countries. New to this service in 2016 are regional maps for Germany. This data can support a more efficient origination and an important heads up to potential issues on some quality parameters that are evident in a number of regions.
In terms of challenges, the 2016 crop has also brought an emerging Mycotoxin risk in some countries. To help, SGS is providing an important Mycotoxin Monitoring Programme which is the subject of another article in this issue.
Looking forward we see big crop plantings in Argentina, while Brazil continues to power ahead in terms of production and resulting export volumes. Next year promises to again see growth and new logistics capabilities in the north of this country, which will assist towards another increase in exports of soybeans and corn. Australian crop prospects are also looking very favourable at this time and in Canada while crop quality had been challenging in some areas, similar export prospects to the last season are expected, across the commodities. This leaves the USA somewhat as the residual stock holder in the grains market when considering the highly competitive nature of the other abundant origins.
With our extensive resources situated in the world’s main crop growing and export regions SGS can assist with a large variety of quality and trade flow information. Please contact us to find out more.
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SGS is the world’s leading inspection, verification, testing and certification company. SGS is recognized as the global benchmark for quality and integrity. With more than 85,000 employees, SGS operates a network of over 1,800 offices and laboratories around the world.