E-Malt.com News article: UK: The regular meetings of the International Grains Council and Food Aid Committee were held in London on 16 and 17 January 2006

The International Grains Council, under the chairmanship of Mr Russell Mildon (European Commission), reviewed the current world grain market situation and the outlook for 2006/07. On the basis of the Secretariat's updated supply and demand forecasts, the Council noted increased 2005 crop estimates for wheat and maize (corn) and world grain ending stocks showing only a modest fall from the previous year. Demand remained strong, especially in the feed and ethanol sectors. The outbreaks of avian influenza have had a relatively modest impact on global feed use to date.

The Council's forecast of world trade in grains in 2005/06 showed little overall change from the previous year. The level of wheat trade was being maintained at around 109m. tons despite smaller than originally predicted purchases by China, where stocks were still being drawn down from previously high volumes.

With regard to global market price developments, ample grain supplies, including a second bumper US maize crop, large wheat harvests in Russia and Ukraine and recent arrivals of southern hemisphere supplies, had resulted in strong competition, although Black Sea prices had firmed in recent months. At the same time, fund activity had been a major feature in US futures markets. Despite rising domestic market prices, India's stocks were expected to remain adequate before the next crop. The Council also noted recent market developments in the oilseed and rice sectors, indicating substantial soyabean supplies, although some key rice exporters in Asia were currently not active sellers.

The recent decline in ocean freight rates, as capacity on the major routes increased, was especially noteworthy. This was due to new-build arrivals and reduced demolition rates, as well as smaller than anticipated iron ore demand by China.

Members of the Council considered initial information on the outlook for wheat in 2006/07. There would be a slight overall decline in northern hemisphere sowings due mainly to reductions in Russia and Ukraine, with exportable supplies from these two countries likely to be reduced in 2006/07. Wheat production was expected to fall somewhat but conditions currently remained mostly favourable. While global demand was also likely to dip, mainly because of likely lower use of wheat in the feed sector, wheat closing stocks in 2006/07 were projected to be trimmed further.

The Council discussed arrangements for the next IGC Grains Conference, due to be held on 14 June 2006, as well as efforts to further enhance the Council's market information services.

The Council appointed, by consensus, Mr Etsuo Kitahara* of Japan as the new Executive Director with effect from 1 February 2006.

The Food Aid Committee met under the chairmanship of Mr Friedrich Brand (Switzerland). Members exchanged information on the latest situation in countries and regions worst affected by recent food emergencies, notably in the Horn of Africa, West Africa and Southern Africa, as well as the needs of people in South Asia affected by last year's earthquake. The Committee received an update from the representative of the World Food Programme (WFP) on emergency operations in these and other regions affected by natural disasters.

Members reported on their current and future shipments in respect of FAC obligations. A preliminary estimate of their combined operations in 2005/06 placed these at some 8.7m. tons (wheat equivalent). This is close to the previous year's 8.8m. tons and well in excess of aggregate minimum obligations under the Convention of some 5m. tons.

Members received a report by the WTO Secretariat on the outcome of the recent Hong Kong Ministerial Conference as it bears on food aid. They noted that the new disciplines were to be completed by 30 April 2006. As to the renegotiation of the Food Aid Convention, this remains subject to the outcome of the Doha Round. Members would continue to exchange views, notably on the question of the assessment of food aid needs.

The Session was attended by observers from FAO and WFP as well as from India and the Russian Federation.


31 January, 2006