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AMIS Market Monitor

last release: February 2019

Policy Developments

Biofuels

  • In December 2018, France passed its 2019 finance bill, which increases biofuel mandates from 7.5 percent in 2018 to 7.9 percent in 2019 and 9.2 percent in 2020. The new biofuel mandate entered into force on 1 January 2019. 
  • On 30 January, the Ministry of Foreign Affairs in Argentina announced that an agreement was reached with the EU to resume the exportation of Argentinean soybean-based biodiesel, subject to price and volume limitations. Specific details are yet to be finalized.

Across the board

  • On 8 January 2019, China's Ministry of Agriculture and Rural Affairs announced the approval of five genetically-modified (GM) crop varieties for importation, including one maize and two soybean varieties. These are the first new approvals of GM crop varieties in about 18 months.
  • In January, as part of a drive to achieve food self-sufficiency, the President of Mexico announced the introduction of guaranteed prices benefiting five commodities, among which beans; milk; maize (MXN 5 610 – USD 292.2 per tonne for a maximum of 20 tonnes), wheat (MXN 5 790 – USD 301.6 per tonne for a maximum of 100 tonnes); rice (MXN 6 120 – USD 318.8 per tonne for a maximum of 120 tonnes). Covered crops will be channelled to designated collection centres throughout the country for sale. 
  • On 20 December 2018, the President of the US signed the Agriculture Improvement Act of 2018 (2018 Farm Act) into law. The USD 867 billion farm bill will remain in place for five years. The US Congressional Budget Office expects that 76 percent of outlays will fund food and nutrition programmes, while 9 percent will be destined to crop insurance, 7 percent to conservation, and 7 percent to commodity programmes. The remainder (1 percent) will support trade, credit, rural development, research and extension, forestry and horticulture schemes. 
  • On 1 December 2018, the US and China agreed to withhold tariff increases for 90 days to work out a new trade agreement. If no agreement is reached after 90 days, the US plans to increase retaliatory tariffs on USD 200 billion worth of Chinese imports from 10 to 25 percent. 
  • On 30 December 2018, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) entered into force between Australia, Canada, Japan, Mexico, New Zealand, and Singapore. It entered into force for Viet Nam on 14 January 2019 and will enter into force in the four remaining countries (Brunei Darussalam, Chile, Malaysia, and Peru) 60 days after ratification. As the world’s third largest trade agreement in GDP terms, the CTPP includes multiple provisions covering trade, investment, intellectual property, as well as substantial improvement of market access policy (reduction or elimination of tariffs, opening of tariff quota access, etc.)
  • On 6 December 2018, India approved a new Agriculture Export Policy which removes all export restrictions on organic and processed food. Export restrictions on major agricultural products such as rice and wheat would be reviewed periodically on a case-to-case basis depending on the price-supply situation.

 Logistics/Infrastructure/Trade Junctures 

  • In Brazil, a plan to modernize and expand logistics and transportation infrastructure was announced on 24 January. It is expected to substantially benefit the grain and oilseed export sectors in the long run. To facilitate access to the northern ports, the plan reportedly calls for the building of railway infrastructure in Mato Grosso, a significant soybean and maize producing state.
  • Beginning in December 2018, freight transportation infrastructure in Vancouver - a key gateway for Canadian products - experienced a period of congestion. As a result of this congestion, the Canadian Transportation Agency initiated an examination of rail service issues to investigate concerns over reported commodity congestion and the rationing of railway capacity to Vancouver. The flow of traffic appeared to have improved by the end of January 2019. The investigation results will be made public when the investigation is completed. In addition, ongoing monitoring of grain transportation in Canada is provided by the Grain Monitoring Program with reports available on their website, grainmonitor.ca.
  • Since the beginning of 2019, labour demonstrations by teachers in Mexico have blocked the operation of railways in the state of Michoacán, causing shortages of staple food (maize and wheat flour) and industry supplies in the region, as well as economic losses amounting to MXN 14 billion (USD 729.17 million) according to the Mexican Confederation of Industrial Chambers.