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G20 Agriculture Ministers confirmed their commitment to the objectives of AMIS at their 11-12 May meeting in Niigata, Japan, calling for all G20 members to proactively support the initiative.
The AMIS Secretariat would like to express its appreciation to the G20 for its continued support to enhance global food market transparency and policy coordination.
The rapid spread of African Swine Fever (ASF) throughout East Asia has started to affect AMIS commodity markets. ASF is now endemic in China; it has recently spread to Viet Nam, Mongolia and Cambodia and is likely to make inroads into other Asian countries.
The extent and speed of the ASF spread through Asia suggest that the impacts on AMIS commodities will likely be pronounced and prolonged. ASF has already taken a toll on feed use in the region and exerted downward pressure on international soybean and maize prices; further spill over effects on wheat and rice markets are expected, even if they are likely to be much more muted.
Several factors make the current ASF outbreak particularly significant. First of all, the most affected country, China, is the world’s largest producer and consumer of pig meat. As China is also the largest importer of soybeans, any sizeable slump in domestic needs will inevitably affect world markets. Secondly, many of the ASF affected countries are underequipped to contain the spread of the disease, which might therefore continue for years. Finally, the effects of ASF are compounded by other distortions that have roiled global commodity markets, such as the current trade dispute between China and the United States.
Against this background, supply and demand forecasts for 2019/20 will be even harder to produce than usual. This calls for constant enhancement of AMIS to fully exploit available information and analyze the ripple effects of ASF on commodity markets. But AMIS can only work effectively if it receives reliable data, fast and effectively, highlighting the need for greater support from all its member countries.
Freight markets slumped earlier this year as disappointing spot demand and concerns about weakening global economic growth dashed expectations for a strong start to the season. The Baltic Dry Index (BDI), which is a benchmark for costs across dry bulk segments, slid to its lowest in around two and a half years in February. Despite a slight recovery since then, the Index was still 38 percent lower y/y as at late-March, reflecting a market which continues to grapple with overcapacity. In a longer-term perspective, the Index remains well below historic peaks of a decade ago.
Although prices for ocean transportation of grains and oilseeds displayed a somewhat steadier tone they, too, fell sharply in 2019. Prices stabilised or advanced recently, led by Brazil, which saw particularly strong soybean shipments. However, overall prospects for grains/oilseeds freight markets across key exporting origins remain mixed, in part because of variable trade forecasts.
Whether the current positive momentum in the grains and oilseeds carrying sectors is just a short-lived correction or the beginning of a longer-term trend remains to be seen. Sustained flows could support a recovery, however values remain vulnerable to periodic shifts and volatility amid persistent headwinds. These include the sector's overcapacity; geopolitical uncertainties; costs associated with forthcoming low emissions regulations; and deteriorating macroeconomic conditions in many countries.
FAO-AMIS foresees global wheat production to strongly recover from last year, rising by 4.0 percent, to 757.4 million tonnes in 2019. This would be close to the record crop of 2017, with the bulk of the recovery originating in the European Union, where a larger planted area, combined with thus far favourable weather, is seen driving up wheat production by at least 8 percent from last year’s six-year low.
In the Russian Federation, an expectation of increased overall plantings and beneficial weather could similarly push up production by almost 10 percent, while this year’s wheat output in the Ukraine is forecast to rise by nearly 8 percent. In North America, production is likely to remain close to last year’s level in the United States, but could increase by around 4 percent in Canada. In Australia, a strong rebound from last year’s drought-afflicted level is foreseen, though wheat planting will only begin in May. Elsewhere, the 2019 output in India could arrive close to last year’s record level, while a contraction is predicted for Pakistan.
This time last year, FAO-AMIS published its first – equally optimistic – wheat production forecast for 2018. How good was it? Comparing it with early predictions by the other two major sources (namely USDA and IGC), AMIS didn’t fare so badly, but all three agencies had to make downward adjustments as the season progressed. As shown in the line graph, forecasts from all three sources followed a rather similar trend and, as one would expect, started to converge when countries’ production estimates became firmer. A lower estimate of China’s wheat production was among the main reasons why the FAO-AMIS global production estimate for 2018 ended up lower compared to the other two sources.
* AMIS is hosted by the Food and Agriculture Organization of the United Nations (FAO) with which it shares a common data platform. Global forecasts and all data referring to non-AMIS countries are provided by FAO, hence the notion FAO-AMIS.
A new data dashboard provides a quick overview of the global food market situation. Explore key indicators such as world production, utilization and stocks or find out the biggest importers and exporters of the four AMIS crops: wheat, maize, rice and soybeans. Interactive charts allow you to familiarize yourself with the AMIS data before deepening your research through custom queries in the AMIS Market Database.