News

30 Oct 2020

This year for the first time, AMIS teams up with Global Grain Geneva to present latest developments and the AMIS outlook for global food commodity markets in an online conference open to the public. While discussions of the international supply and demand situation are usually reserved to official country representatives in the Global Food Market Information Group, opening up to the public is hoped to further strengthen visibility and relevance of AMIS assessments to help promote market transparency.

On 18 November, an expert panel of selected AMIS cuntry focal points will discuss trends and challenges in the global maize and soybean market. Countries represented will include Brazil, South Africa, Ukraine and the United States.

On 19 November, two separate expert panels will review recent developments in the rice and wheat market, including AMIS country representatives from Australia, Canada, China and the EU.

For registration and further information, please consult the website of Global Grain Geneva.

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12 Jun 2020

While industrial commodity prices, especially oil, plunged following the spread of COVID-19, prices of staple food commodities have been broadly stable. Early indications for the 2020/21 season point to abundant food supplies, and by most expectations, stable prices. Yet, there are numerous risks and uncertainties to this outlook.

Energy prices are particularly important for the price outlook of food commodities, affecting their production directly through fuel costs and indirectly through the cost of fertilisers and other chemical inputs. Extended weakness to energy and fertiliser prices could exert downward pressure on food prices, especially for grains and oilseeds, which are also facing less demand from the biofuels sector due to the pandemic-indused collapse in the transport sector.

Future feed demand is another source of uncertainly, given the profound impact that the COVID-19 pandemic has had on the livestock sector. Widespread lockdowns, social distancing measures and market closures resulted in substantially reduced food service sales and depressed demand for meat. In addition, many slaughterhouses have been struggling to implement adequate health safety standards for their workers. In view of ample feed supplies, particularly in the United States, the pace and extent of recovery in the livestock sector will have an important bearing on food commodity prices, particularly on maize and feed wheat.

On the macroeconomic side, a further strengthening of the US dollar could continue to depress commodity prices. Indeed, the weakness in some commodity prices during the first quarter of 2020 can, in part, be attributed to a stronger dollar. Research has shown that a 10 percent appreciation of the dollar against major currencies is associated with a 5 percent decline in prices of internationally traded commodities. Similarly, the price outlook will be affected by currency depreciations of countries that account for a large share of global trade for an individual commodity market.

Restrictive trade policies and domestic support measures could also play an important role in commodity price movements. In the early phases of the pandemic, some Central Asian wheat producers and East Asian rice producers announced intentions of export restrictions to ensure domestic availability of food supplies. However, these fears have so far had little impact on global markets in view of the comfortable supply situation.

Disruptions to supply chains as a result of the pandemic constitute another risk to commodity markets. Travel restrictions have already affected numerous commodity markets, especially for perishable foods, while possible disruptions to labour and input supplies (e.g., chemicals, fertilisers, and seeds) could negatively affect next season’s crop.

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29 May 2020

Members of the AMIS Rapid Response Forum met for a consultation meeting on 28 May 2020 to discuss the food security implications of COVID-19, and to prepare for more targeted actions depending on the evolution of the crisis. Particular concern was raised regarding the impact of the anticipated economic shock on people's access to food.

Meeting participants emphasized that the global food supply situation at present is broadly comfortable. Despite some spot areas of concern (e.g. dry conditions in the EU and Ukraine), global production of the four AMIS crops is generally expected to meet anticipated demand in 2020/21. At regional level, however, there are several developments that need to be monitored closely, including the ongoing desert locust outbreak in East Africa, the Arabian Peninsula and parts of South Asia that poses a serious threat to local grain production.

Regarding transport and processing, members pointed out that for many of the challenges that had appeared earlier in the pandemic, countries were able to identify innovative solutions to keep markets supplied. However, some sectors such as meat have been disproportionately affected, which will require particular attention going forward.

Outcomes of the consultation will feed back into the next meeting of G20 Agriculture Ministers, who - at their extraordinary meeting on COVID-19 in April - had called on AMIS to actively support the G20 in identifying options to help safeguard global food security.

At the start of the meeting, Mr. Tassos Haniotis of the European Commission assumed his role as AMIS Chair, taking over from Mr. Marcelo Fernandes Guimarães of Brazil.

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14 May 2020

As COVID-19 spreads around the globe, fears are mounting that food supplies may start running short. While we should take these concerns seriously, they should not be overstated either, especially in the case of basic staples. As noted in the May edition of the AMIS Market Monitor, global markets for wheat, rice and maize continue to be well supplied, stocks are healthy, production is unlikely to be disrupted, and prices have remained relatively stable.

In order to ensure sufficiency of domestic food supplies several countries have recently taken steps to limit exports. As we saw during the food price crisis of 2007-2008, such policies might backfire and become a threat to global food security. At the time, leading cereal exporters cut their sales abroad in order to insulate their own markets from increasing food price rises. In response, several importing countries lowered or completely lifted import tariffs, which prevented any significant rationing of import demand. As a result, global food prices not only kept rising but also became more volatile. In the case of rice, the most important food staple, such policy measures contributed to almost half of the price surge.

In sharp contrast to the last crisis, cereal supplies today are at far more comfortable levels while upcoming production of key staple crops is unlikely to suffer major disruptions. This is particularly the case in large exporting countries where much of production is mechanized, requires relatively little labour input, and takes place in areas with dispersed, already socially distanced, rural populations. Similarly, there is low probability of disruptions to international transport and distribution. Being dry bulk commodities, food staples can usually be loaded, shipped and discharged with minimum human-to-human interaction.

Thus far, the trade restrictions put in place have been, for the most part, temporary measures with little adverse impacts on international prices. However, the danger is that more countries might follow suit, leading to the same panic-buying and hoarding behaviour witnessed a decade ago. The world’s poor would be the ones bearing the brunt.

The recent statement of G-20 Agriculture Ministers gives reason for hope that lessons have been learnt from 2007-2008. It cites the importance of working to ensure the continued flow of food, products, and inputs essential for agriculture and food production across borders despite the challenges faced from COVID-19. Such actions will allow international markets to play an instrumental role in avoiding food shortages and mitigating the inevitable global economic downturn that will result from the pandemic. 

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27 Apr 2020

A new tool monitors restrictions in food trade and assesses their impacts for food availability. The COVID-19 Food Trade Policy Tracker, developed by AMIS Secretariat colleagues in IFPRI, is updated twice daily and provides information free of charge.

Meant to ensure sufficiency of domestic food supplies, several governments have implemented trade restrictions, including on staple foods, in response to the COVID-19 crisis. Instead, these restrictions pose a direct threat to countries that rely on imports and – as we know from experience – may lead to higher food prices.

The tracker also provides indicators to facilitate analysis of the potential impact of trade restrictions, such as export and import shares of affected staple foods in world trade and domestic food production and consumption.

Access the tool here: https://www.ifpri.org/project/covid-19-food-trade-policy-tracker

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