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									                                  MONTHLY NEWS REPORT ON GRAINS
                                       ISSUE 60 –MARCH 2010


    •    EU Grain Farmers Ready to Hedge on Reform
    •    No Rise Expected for Wheat Prices (Australia)
    •    Grain Market Report Summary (IGC)
    •    Drought in Southwest China has Limited Impact on National Grain Supply
    •    Syria Becomes Net Importer of Wheat
    •    Algeria Plans to Export Barley for First Time in 40 Years
    •    Global Food Security Depends on Modern Agriculture
    •    India Rules Out Wheat Exports, Favours Stepping Up Allocation
    •    Hunger Knows No Borders
    •    The True Cost of Cheap Food
    •    Asia's Top Five Wheat Importers (Russia)
    •    Lots of Wheat Will Keep Prices Down
    •    Red Menace: Stop the Ug99 Fungus Before Its Spores Bring Starvation


    •    US Baseline Briefing Book: Projections for Agricultural and Biofuel Markets (FAPRI)
    •    Effects of US Maize Ethanol on Global Land Use and Greenhouse Gas Emissions: Estimating
         Market Mediated Responses


    •    International Grain Trading Conference (Russian Grain Union and APK-Inform Agency)
                  April 13-15, 2010 Sharm El Sheikh, Egypt
    •    Grains Conference (International Grains Council)
                  June 8, 2010 – London, England


    •    Global Trade Analysis Project (GTAP)

30/03/10 – Guardian.co.uk

Demand for futures contracts and other hedges from European grain farmers is set to grow as impending
market reforms force them to use financial products as a cushion against price movements.

U.S. and Australian farmers have long hedged against price movements by buying or selling futures
contracts, which are not physical transactions but exchange-traded agreements to deliver grain at a set price
on a set date.

Financial hedges exist in Europe, but demand has so far been limited. Reuters data show turnover in Paris
for front-month wheat futures contracts was 216,000 50-tonne lots (10.8 million tonnes) in the last quarter
of 2009, compared to the equivalent of 316 million tonnes in Chicago .
Instead, farmers in Europe have largely relied on European Union "intervention" policy, which guarantees
farmers can sell feed grains at a minimum price.

However, Brussels will suspend automatic intervention as of May 31, and farmers will have to cope with
more volatile prices in future
"Futures and options are indeed an important tool that will grow if the European intervention system
disappears," said Lionel Porte, head of agricultural commodities products at NYSE Liffe, the European
derivatives unit of NYSE Euronext .

Although thin, futures volume on Euronext has been growing steadily for the past couple of years.

Australian farmers often deal through banks in international futures adjusted by banks to the exchange rate
between the Australian dollar and U.S. dollar, known as swaps.

National Australia Group is one of the biggest hedgers of wheat in Australia and is ready to offer financial
hedges to farmers in Britain through its Clydesdale and Yorkshire Banks unit.

"The swaps should appeal to European producers. Some of the benefits are: They allow growers to price
grain beyond the maturities offered by grain merchants and in some cases the underlying futures market,"
said Rod Fraser, Head of Agribusiness for NAB.

Analysts said hedging was likely to be more attractive to cooperatives in Europe, who can pool resources,
rather than small farmers, many of whom would likely prefer to hedge indirectly, through a grain merchant.
Spain's Farm Cooperatives group has already been holding courses for its members on futures and options
trading in Paris and Chicago, to prepare for intervention reform.

"Moving from theory to practice will be the hard part," said Cooperatives grain technician Antonio Caton.
"But it's coming because the market is demanding it more each day. It's a way for the supply and demand
side to ensure prices, just like the demand for insuring production."

Caton noted the Spanish market had taken a tentative step towards hedging with forwards contracts
currently being offered nine months ahead for the first time in memory.

A forward is a private agreement to sell at a later date. Like many EU countries, Spain does not have a
centralised commodities exchange on which to trade futures.

Before commiting to financial hedging, some farmers are waiting to see how Brussels overhauls the 50
billion euro ($67.54 billion) a year Common Agricultural Policy (CAP) in 2013. Many expect the EU retain
some form of market management

In the debate on CAP reform, there has been talk of creating tightly regulated futures markets for
agricultural commodities as a way of helping producers hedge against future price fluctuations, but
discussions are still at an early stage.

As an example of market management, Christian Vanier, a senior official at French farm office
FranceAgriMer, noted that Brussels recently responded to a collapse in milk prices by creating tenders for
milk powder and butter.

"The Commission showed it can quickly react to market difficulties. There is no reason why it wouldn't do
the same with grains," Vanier said at a news conference. (Additional reporting by Sybille de La Hamaide,
Gus Trompiz and Valerie Parent in Paris, Nigel Hunt in London, Charlie Dunmore in Brussels, Svetlana
Kovalyova in Milan and Barbara Skladowska in Warsaw; Editing by Keiron Henderson) ($1=.7403 Euro)
26/03/10 – World-Grain.com

Grain traders say growers could be in for a prolonged period of low wheat prices as high stocks cause a
global glut.

Queensland-based PentAg says the larger volume of wheat has meant the global price hasn't moved
significantly in around eight weeks.

PentAg's Steve Sloss says something drastic would have to happen for the price to shift.

"Unless we see a serious deterioration of someone's crop around the world and we talking about an event in
the order of 10,000 to 15,000 tonnes, it's going to be a tough grind to push prices higher in the near term,"
he says.

"Consumers both domestically and international are choosing to buy everything hand to mouth, which
again is not new, but that continued buying pattern has made it a bit tough for us to get any sort of a rally in
our markets here in Australia."

25/03/10 – International Grains Council

Ample supplies and a mostly favourable outlook for upcoming harvests pressured grain export prices,
although US futures remained volatile. Quotations in some exporters such as the EU, having benefited from
the stronger US currency, were underpinned by the resultant increase in sales. Wheat markets mostly
weakened in the past month, with buying activity largely routine and northern hemisphere winter crops
developing favourably. Significant were a number of sales from EU and Black Sea origins to South
America, reflecting their increased competitiveness against North American supplies.

Notable was the strength in premium protein wheats, attributed to tightening availabilities. Although US
maize (corn) futures fluctuated on a daily basis in response to movements in the dollar, crude oil and
technical trading, prices generally eased in March, with new official estimates confirming smaller than
anticipated exports and lifting the carryover forecast. Moreover, weather in the Corn Belt improved
recently, with an upcoming annual survey report expected to reveal a significant increase in planting
intentions for the 2010 crop.

During much of the past month, oilseed markets were bearishly inclined as substantial new crop soyabean
supplies became available in South America. However, concerns about port logistics in Argentina and
Brazil and renewed speculative short-covering in US futures provided support over the period. Export
quotations for white rice in Thailand touched two-year lows in March, reflecting reduced buying activity
and advancing Asian harvests. Despite recent volatility in the minerals-oriented Capesize sector, ocean
freight rates for grains and oilseeds steadily firmed in response to active chartering.

Full summary of report is available at: http://www.igc.org.uk/en/publications/grainmarketreport.aspx

24/03/10 – World-Grain.com

Drought in southwest China is expected to have limited impact on national grain harvest this year, but may
affect grain consumption in certain regions and raise market expectations of inflation, insiders say.
The severe drought has led 18.05 million people and 10.17 million livestock short of drinking water, and
affected 96.54 million mu (about 6.44 million hectares) of arable land in southwestern China's Yunnan
province, Guizhou province, Guangxi Zhuang Autonomous Region, Chongqing Municipality and Sichuan
province, accounting for 85 percent of the country's total drought-stricken tillable land, according to the
latest statistics from the State Flood Control and Drought Relief Headquarters.

Yunnan suffered the severest drought, with 3.19 million hectares of arable land having been affected.

Sichuan is a major grain production base in China. Its rice output takes up 8 percent of the country's total,
while its corn, soybean, and wheat output each account for around 4 percent. However, the province's
drought area is less than 4 percent of the nation's total planting area and thus is predicted to have only a
minor impact on this year's grain production.

Shao Wenzhong, an analyst with Changjiang Securities, noted that grain output in Yunnan, Guizhou and
Guangxi only made up 7.7 percent of the national total in 2008, with cereal, beans and potatoes output
accounting for 7.2 percent, 8.4 percent and 14.7 percent. These provinces and region produced 11.4 percent
of rice, 1.1 percent of wheat, and 6.8 percent of corn for China that year.

Ma Wenfeng, an analyst with Beijing Orient Agribusiness Consultant Ltd., a leading agriculture and food
business consulting company in China, estimated that the drought would cause Yunnan's spring grain
output to fall by above 50 percent from last year. The province's spring grain output usually holds at around
2.3 million metric tons (tonnes), or 15 percent of its annual grain production.

Shao pointed out that the drought would mainly lead to a fall in output of summer grain. Pessimistically,
suppose that drought-ravaged Guangxi, Yunnan and Guizhou fail to reap summer grain; the country's rice,
corn, and wheat supply would fall just 1.46 percent, 1.74 percent and 0.93 percent, respectively. Such a
reduction would not have much impact on the national grain supply in consideration of the three crops'
ample stocks, Shao added.

Although the total grain supply will not be affected significantly by the drought, grain prices may still rise
in the following period. Ma pointed out that drought will exert pressure on regional grain production and
consumption, which is expected to boost local grain prices. He added that market expectations for inflation
will also help push up grain prices.

Some insiders pointed out that the worsening drought would drive up planting costs. Furthermore, the rise
of the grain floor-price and fertilizer price this year will give support to grain prices.

Ma meanwhile said that grain prices have limited room to rise, as the government is able to use ample
stockpiles to stabilize market prices.

23/03/10 – World-Grain.com

Syria became a net importer of wheat in 2009-10 due to a severe drought and a limited local crop in 2008,
according to a March 22 report by the U.S. Department of Agriculture Foreign Agricultural Service (FAS).

The 2010-11 wheat crop is forecast at 4.5 million tonnes with improved rainfall and imports will decline,
FAS said. The government purchase price of $440 per tonne is at least double international prices. Russia
and Ukraine were the main suppliers of wheat.

FAS said Syria's corn imports are expected to continue to grow and are forecast to exceed 1.5 million
tonnes in 2010-11. The U.S. has been the main corn supplier, but competition from Black Sea countries is
increasing, FAS said. Syria continues to diversify the sources of imported rice as high prices and export
restrictions make Egyptian rice less attractive.
22/03/10- World-Grain.com

Citing an official in Algeria's Agriculture Ministry, Reuters recently reported that the country would like to
export 300,000 tonnes of barley in its first foreign sale of the grain in 40 years. The country's National
Cereal Agency (OAIC) said it has secured 2.1 million tonnes of grain stocks due to a strong harvest in
2009, which, according to OAIC director Nouredine Kahal, represents six months of the country's needs. In
addition, Algeria has 570,000 tonnes of durum wheat in stock, which can cover five months of
consumption. Kahal also said that Algeria's goal is to build up grain stocks of 4 million tonnes in 2010.

Significance:Algeria is one of the world's biggest importers of cereals, with cereal imports standing at 6.3
million tonnes in 2008 and averaging 5 million tonnes over the past five years, but the record harvest of
2009 is turning the country into a net exporter of barley. Officials are hoping to beat last year's grain
harvest as adequate rainfall has improved yields. The government remains committed to boosting
agriculture production by providing financial incentives, such as subsidies for fertilisers and high-yielding
seeds, the provision of plowing and sowing equipment, and soft loans for farmers.

19/03/10 – WolrdSentinel.com

Studies released at a symposium in Washington, D.C. underscored the wide range of benefits modern
agriculture has provided to society and emphasized the importance of continued innovation and new
technologies to meeting growing global food, feed, fiber and industrial needs.

Research presented by a diverse group of experts in agriculture, economics, conservation and food security
detailed how technological advancements employed on farms and across the food chain have provided an
abundant, safe, affordable food supply while fostering economic development by enabling fewer and fewer
people to produce the food required by society.

"Modern agriculture offers a range of benefits, including greater production and higher incomes for farmers
-- including small producers -- in both developed and developing countries. Technical advances also have
sharply reduced environmental impacts, enabling reduced pesticide, herbicide and fertilizer use, less tillage,
and less land and water use per unit of output—all decreasing pressure on fragile global ecosystems," said
Bill Motes, agricultural economist. "Agricultural development has brought improved living standards as
smaller shares of disposable income are needed to purchase food, as well as enhancing social stability as
food insecurity is avoided."

"Too often science and technology get short shrift, along with the contributions of the private sector. We
cannot meet the food and other requirements of a larger, more affluent global society without the scientific
advances that underpin modern agriculture," said Michel Petit of the Institut Agronomique Méditerranéen
in Montpellier, France. "The world has seen impressive growth in global agriculture in the past decades. As
we face growing global demands and increasing resource constraints, agriculture must now become more

The full scope of the enormous challenge facing global agriculture in the coming decades was fully evident
from projections presented by John Kruse, Global Insights economist. His study provided detailed
projections for more than a dozen major crops in the important producing and consuming regions of the
world. His projections indicated that overall crop demand will expand from present levels by approximately
85% to 2050.

Another study indicated that other considerations are now more prominent and must be factored into the
future challenge.
"For the past 50 years, we have expanded food production by converting natural habitat at the rate of 0.4
percent per year. If we assume the ´business as usual´ case for expanding into natural habitat, there will be
very little left by 2050," said Jason Clay of the World Wildlife Fund. "To feed 9 billion people and
maintain the planet, we must freeze the footprint of food. The Earth´s resources are finite. If we exceed the
carrying capacity of the planet, we are taking away the very resource base that will be needed by our
children and our grandchildren."

To examine the implications of freezing agriculture´s footprint, IHS Global Insight calculated the crop
yield increases that would be necessary to meet global demand if the total crop area is fixed at the current

"Holding crop area fixed and assuming only historical yield growth, food production will fall far short of
the needs by 2050," said John Kruse. "Meeting those needs with the same land area would require global
crop yields to increase nearly 25 percent faster than historically."

William G. Lesher, Executive Director of the Global Harvest Initiative, noted that other resources used in
agriculture may become more constraining, as well.

"In addition to land, the availability of fresh water will increasingly be a limiting factor, necessitating that
productivity rates accelerate even faster," said Lesher. "We need a major boost in water-use efficiency,
what some call a ´Blue Revolution,´ to stretch our scarce water supplies significantly."

The studies examined a range of potential solutions for meeting these challenges, agreeing that progress
will come through a variety of efforts, including improved public policies and increased infrastructure
investment, as well as new technology.

Senator Richard Lugar (R-Indiana) emphasized the need for a renewed focus on agriculture development
and increased political will for change if we are to succeed in creating a more secure world.

"World peace will not be built on empty stomachs or human misery; a world in which 40 percent of the
total population is marginalized in the global economy is not one where peace or environmental
stewardship will prosper," said Lugar. "Modern agriculture is not the nemesis of the environment or socio-
economic development; rather it is one of their greatest allies."

Christopher Dowswell, for 31 years aide de camp to the Green Revolution´s Norman Borlaug, concurred,
adding that while developing new crop varieties to increase potential yield is absolutely necessary, it is far
from sufficient.

"In attempting to bring the Green Revolution to Africa, for instance, agricultural experts developed
impressive packages of technology during the 1980s that, on farmers´ demonstration plots, produced yields
two-to-three times higher than average," said Dowswell, who is now with the Sasakawa Africa Association.
"Yet a Green Revolution failed to take off, because Africa, unlike Asia and parts of Latin America, lacked
roads, railroads, power grids, irrigation systems, market institutions to deliver seed and fertilizer and to
handle the increased harvests, and farmer incentives from governments to encourage modernization. "

While the studies described the progress that´s already been made, they also underscored the tremendous
amount of work that still needs to be done.

In summarizing the discussion, William Lesher said: "It is clear that we have a productivity gap going
forward, a gap that we must begin now to close. If we are to double agricultural output by 2050 and do so
with basically the same amount of land and water as we have today—while also reducing the
environmental footprint—then clearly we must become more productive than we have been in the past.
That is the productivity gap, that is our challenge!"

The Global Harvest Initiative is dedicated to spurring the development and sharing of agricultural
innovations with those that need it most. Members include Archer Daniels Midland Company,
Conservation International, DuPont, International Conservation Caucus Foundation, John Deere,
Monsanto, TransFarm Africa Corridors Network, and World Wildlife Fund. Further support is welcome
from public and private sectors entities sharing the goal of closing the global productivity gap. For more
information, visit www.globalharvestinitiative.org.

19/03/10 – World-Grain.com

Indian Food and Agriculture Minister Sharad Pawar yesterday ruled out exporting surplus wheat lying in
warehouses to reduce the stock and instead favoured stepping up allocation to Above Poverty Line (APL)

"There is no question of allowing wheat export. My ministry has proposed to allocate more wheat to the
APL families. The issue was to be taken at the EGoM meeting today, but it has been postponed," he told
reporters on the sidelines of an agriculture conference here.

As on March one, the wheat stock in the Central Pool was 183.88 lakh tonnes, much more than the buffer
requirement of 40 lakh tonnes until April one, according to government data.

The minister also indicated that the government will extend the duty free import of wheat beyond March 31
- a move that was introduced in 2008 to increase wheat availability in the domestic market to cool prices.

"We will not take any decision, which will increase the prices, but the decision will be taken by the
Cabinet," Pawar said.

Pawar also expressed hope that India's sugar production will cross 17 million tonnes this season (October-
September), since the recovery rate and productivity of sugarcane have improved.

If India produces 17 million tonnes of sugar, import requirement will also be reduced since the earlier
estimates suggested sugar output at 15-16 million tonnes against the country's requirement of 22-23 million

18/03/10 – IRINNews.org

West Africa can meet its food needs through regional trade, most agricultural experts say, if countries keep
their borders open for the free flow of staple grains, especially in times of heightened stress, whether
climatic, economic, or brought on by conflict.

In the fourth and final part of the series "Are we heading for another food crisis?", we take a brief look at
West Africa, where prices have begun to rise and failed rains have left 10 million people across the Sahel
food insecure, after barely recovering from the 2007/08 food price crisis.

After three years of good harvests, in 2009 Niger was again in the food security headlines after poor rains
let it down. It was last in the news in 2004, when a combination of poor rains and one of the worst locust
infestations in 15 years left more than two million people in need of food aid.

What aggravated the crisis - which spilled into 2005 - was the closure of borders, a decision that hampered
the free flow of food, said a paper commissioned by the Famine Early Warning System Network (FEWS-

"In 2005 the situation was made worse when neighbouring countries closed their borders with Niger. This
limited the availability of food and increased inflation," said the UK-based aid agency, Oxfam, which
called on countries in the region to keep their borders open.
In 2005 the situation was made worse when neighbouring countries closed their borders with Niger
Niger and neighbouring Nigeria - the "giant" in the region, "accounting for 57 percent of total grain
production in West Africa" - both had bad harvests In 2004/05, the FEWS-NET paper said. Nigeria banned
the export of cereals as well as "imports that Nigeriens depended on for cash incomes". Burkina Faso,
another neighbour, banned exports in 2004, "blocking another potential source of grain for Niger".

Although prices fell slightly after the 2009 harvest, in most West African countries they remained higher
than two years before, and have again started climbing in several countries in 2010, said the UN Food and
Agriculture Organization (FAO).

"Sahelian cereal markets are highly integrated among themselves and with coastal countries in West Africa;
hence, prices in any individual Sahelian country are influenced by production results, changes in demand,
and changes in price throughout West Africa; this particularly true for coarse grains [cereals other than
wheat and rice], as they are rarely imported into the region," the FEWS-NET paper said.

Ousmane Badiane, director for Africa at the US-based International Food Policy Research Institute, said
high prices were here to stay, as the costs of agricultural inputs had increased enormously.

He pointed out that if the global prices of wheat and rice were to rise, this could aggravate the situation in
many cereal-importing countries in West Africa. Failed rains in some of the world's largest rice producers
in Asia are causing global concern about the price of rice.

The FEWS-NET paper noted that rice and wheat were important to many people in the urban areas of West
Africa, and rarely substituted them for cheaper locally available staples.

Humanitarian agencies have appealed for US$370 million to fund various initiatives in West Africa, of
which only 3.1 percent has been covered.

To see a snapshot of eight West African countries in need of food aid, based on information sourced from
FAO and other agencies: http://www.irinnews.org/Report.aspx?ReportId=88478

17/03/10 – Resurgence.org

The globalisation of the food market has made food cheap, but who is benefiting?

Cheap food causes hunger.

On its face, the statement makes no sense. If food is cheaper it’s more affordable and more people should
be able to get an adequate diet. That is true for people who buy food, such as those living in cities. But it is
quite obviously not true if you’re the one growing the food. You’re getting less for your crops, less for your
work, less for your family to live on. That is as true for Vermont dairy farmers as it is for rice farmers in the
Philippines. Dairy farmers today are getting prices for their milk that are well below their costs of
production. They are putting less food on their own tables. And they are going out of business at an
alarming rate. When the economic dust settles, this will leave us with fewer family farmers producing the
dairy products most of us depend on.

This is the central contradiction of cheap food. Low agricultural prices cause hunger in the short term
among farmers. And they cause food insecurity in the long term because they reduce both the number of
farmers and the money they have to invest in producing more food.

An estimated 70% of the world’s poor live in rural areas and depend either directly or indirectly on
agriculture. Cheap food has made them hungry and kept them in poverty. It has also starved the countryside
in the developing world of much-needed agricultural investment. Farmers have nothing to invest if they are
losing money on their crops.

The food crisis has indeed served as a wake-up call for governments and international agencies responsible
for such matters. Among those most shaken from their policy slumber were officials at the World Bank,
which cut the share of its spending on agricultural development from 30% in 1980 to just 6% in 2006. But,
lo and behold, the World Bank’s World Development Report for 2008 carried the subtitle Agriculture for
Development. It was the first time in twenty-five years that the Bank had focused its signature publication
on agriculture. The renewed attention was welcome, as it included a call to reinvest in smallholder
agriculture, not just large-scale export crops.

The Bank, of course, studiously avoided taking any responsibility for having promoted the very policies
that caused agriculture to be neglected in the first place: not only the cuts in aid and investment, but the
structural adjustment programmes, imposed as conditions on its loans, which gutted the capacity of most
governments to support domestic agriculture.

These same structural adjustment programmes were part of the campaign to get governments out of the
economy altogether. The argument was that the market should be allowed to work its magic, to allocate
resources more efficiently, to set prices without government distortions. Trade policy needed to reduce the
government role as well, cutting protective tariffs and quotas and price supports, following the theory of
comparative advantage.

In agriculture, what that meant for developing countries was that if you couldn’t produce basic grains as
efficiently – read ‘cheaply’ – as they could in the US, or Australia, or Brazil, you just shouldn’t produce
basic grains. It would be cheaper – “more efficient” – to buy them on the international market. Instead,
maybe you should produce, say, flowers for export, or winter strawberries for the US market. But maybe
you shouldn’t produce anything because maybe your land is bad and you have no roads to get produce to a
port anyway. So maybe there’s nothing the market wants from you. And it doesn’t need your home-grown
grains any more because they are being imported.

That’s really how the theory works. The idea is that a country can import all the food it needs, and it should
do so if it can get that food more cheaply from abroad than it could by having its own farmers grow it. One
obvious problem with this approach is that if farmers stop growing food, their families don’t have anything
to eat, and if they can’t get jobs, they have no money to buy food.

Secondly, a country can end up in a situation of food dependency, which becomes particularly problematic
when prices spike and supplies get tight. That is what we saw recently with what became known as the
food crisis. Countries like the Philippines couldn’t get the rice they needed. They had stopped producing
enough rice to protect themselves from such a market shock, and they couldn’t get anyone to sell it to them
because governments were concerned about feeding their own people first.

This exposed the dangers of following policies that say you can get all the cheap food you need out in the
international market. A lot of countries have taken note of that; the Philippines is now on a multi-year
national campaign to restore self-sufficiency in rice production.

One place where the government seems to have kept its ideological blinkers firmly in place is Mexico.
There, in the birthplace of corn, where the crop was domesticated into one of the world’s most important
food crops, there were tortilla riots in the streets as people couldn’t afford this most basic staple. In the
fifteen years since the North American Free Trade Agreement took effect, US corn has flooded Mexico at
prices half what it cost to produce in Mexico. Mexico now depends on imports from the US for more than a
third of its corn. Some two million hungry farmers have left agriculture under the flood of cheap food.

The food crisis also illustrates what some have called the globalisation of market failure. Globalisation
involves opening markets and bringing things that are produced in different parts of the world into direct
competition. The assumption – and the integrity of the economic theory hinges on such assumptions – is
that those markets work; that prices actually reflect the real values of what’s being traded. In agriculture,
the assumption is that efficiency equals high yield, which means low price, which reflects the actual value
of what’s produced. When it doesn’t, economists call it a market failure. Agriculture is rife with market
failures. You can see it in the Mexico-US trade in corn.

Environmental costs are one of the key areas where the market fails to adequately value both costs and
benefits. The US specialises in environmental costs. Corn is one of the most polluting US crops of all.
Excessive water and chemical use, run-off of fertilisers into waterways, the dead zone at the mouth of the
Mississippi River in the Gulf of Mexico: all are examples of high environmental costs from US corn
production. Producers and traders pay virtually none of the costs of those damages, and the price of corn
when it goes across the border into Mexico does not reflect these environmental costs.

What happens on the Mexican side? Well, the smaller producers are maintaining great biodiversity – both
wild and in corn varieties – with low-input systems. These positive contributions go unrewarded by the
market. Corn biodiversity has virtually no value in the global marketplace, yet these corn seeds are the
building block for future varieties of corn: ones we will need to withstand climate change, deal with
pesticide resistance, and so on. The price of Mexican corn does not reflect these contributions to the
common good.

When you globalise trade, you also globalise market failure. You get under-priced US corn coming into
direct competition with under-valued Mexican corn. Mexican corn loses that competition, but not because
it’s less ‘efficient’. A Mexican farmer once said, “We’ve been producing corn in Mexico for 8,000 years. If
we don’t have a comparative advantage in corn, where do we have a comparative advantage?” He’s right.
The problem is that comparative advantage as defined by the global marketplace doesn’t value the
advantage that Mexican corn offers. And in the deregulated marketplace, the only value is how cheap
something is.

The globalisation of market failure gives us a worsening environment, increasing poverty among food
producers, increasing food dependence, and hunger. That is why one of the main culprits of the food crisis
is our blind pursuit of cheap food.

Globalisation cheapens everything. The problem is that some things just shouldn’t be cheapened. The
market is very good at establishing the value of many things but it is not a good substitute for human
values. Societies need to determine their own human values, not let the market do it for them. There are
some essential things, such as our land and the life-sustaining foods it can produce, that should not be

16/03/10 – Sharenet.co.za

Russia's aim to gain a foothold in Asia's lucrative wheat business will take longer than the targeted 2-3
years as transport hurdles and consumers reluctance to accept a new origin slow Moscow's campaign in a
market ruled by Australia and the United States.

Russia has already grabbed a sizeable share of U.S. and European exporters in the world's biggest wheat
markets of Egypt and the Middle East in recent months, worrying suppliers that the country's push into
Asia may cost them profits.

Asia's top 5 wheat importers: Country 2008/09 2009/10* Indonesia 5,423 5,500 Japan 5,156 5,300 South
Korea 3,371 4,000 Philippines 3,201 3,000 Bangladesh 2,882 3,000 Afghanistan 3,800 2,000 * Estimates
for 2009/10

10/03/10 – ABC.net.au
The grain market is expected to remain flat as a surplus of wheat in the northern hemisphere, and good
seasons in Europe put a dampener on prices.

A report from the United States Department of Agriculture due out later this week is expected to confirm
the grim news.

It's expected huge crops in South America, India and Russia will stop the market going up.

Grains analyst Lloyd George says Russia is also talking about export subsidies.

"I think it is fair to say that we're going to see renewed pressure on prices, as the weight of these increasing
stocks just weigh on markets over a period of time," he says.

Ninety-five per cent of the world's wheat is produced in the northern hemisphere, and many of the big grain
producers have had a bumper season.

With the rain falling here in Australia, farmers will soon decide how much they'll plant, taking a gamble
with grain.

"Looking at another big wheat crop, we've had a build up in stocks. Buyers are comfortable and waiting for
the wheat to come to them," he says.

The Australian Bureau of Agriculture and Resource Economics recently tipped the world wheat price
would decline about 6 per cent.

Mr George agrees.

"I think farmers will do their thing. If they've got a good opportunity [from recent rain] to plant, they will,"
he says.

"However, grain prices do have a way of doing the unexpected at times, so it's always hard to be sure.

"But as crops come out of dormancy in the US, we'll know the whole situation for sure, but the opportunity
for weather problems is narrowing."

Feb-March 2010 – Wired.com

As they queue to fill water jugs from a rusty communal tap, the women of Njoro can’t help but gawk at the
odd scene across the road. In a wheat field ringed by barbed wire, a dozen men wearing white polyethylene
jumpsuits stand in a tight huddle, eyes fixed on the green-and-amber stalks that graze their knees. They chat
in foreign tongues — Urdu, Farsi, Chinese — that are rarely heard here amid the acacia trees and donkey
carts of Kenya’s Rift Valley. The men’s hazmat-style safety gear suggests they might be hunting down one
of the infamous viruses that flourish in this part of the world — Ebola, perhaps, or Marburg.

Then the leader of the huddle, Harbans Bariana, a rotund Australian in an undersize safari hat, begins
reading aloud from his clipboard: “Wylah?” he asks.

His colleagues bend down to examine some flaccid plants flecked with red splotches. A lanky Pakistani
with a salt-and-pepper beard rakes a finger along one of the mottled stalks; an iodine-like residue rubs off
on his skin. “40 S,” he calls out.

The men move three steps right to a slightly more robust clump of wheat. The Australian asks:
“25 MR?” comes the tentative reply from a mustachioed Nepali in a green baseball cap. They slide over to
inspect another stalk, and then another.

To the women at the tap, faces scrunched in puzzlement, the call-and-response sounds like gibberish — and
to most of the world, it is. But to the jumpsuited strangers in East Africa — a group of elite plant
pathologists — these codenames and numbers are a lingua franca, describing just how badly a crop has
been ravaged by disease. These specialists have come to Njoro on this autumn afternoon to study a scourge
that is destroying acres of Kenyan fields. The enemy is Ug99, a fungus that causes stem rust, a calamitous
disease of wheat. Its spores alight on a wheat leaf, then work their way into the flesh of the plant and hijack
its metabolism, siphoning off nutrients that would otherwise fatten the grains. The pathogen makes its
presence known to humans through crimson pustules on the plant’s stems and leaves. When those pustules
burst, millions of spores flare out in search of fresh hosts. The ravaged plant then withers and dies, its
grains shriveled into useless pebbles.

Stem rust is the polio of agriculture, a plague that was brought under control nearly half a century ago as
part of the celebrated Green Revolution. After years of trial and error, scientists managed to breed wheat
that contained genes capable of repelling the assaults of Puccinia graminis, the formal name of the fungus.

But now it’s clear: The triumph didn’t last. While languishing in the Ugandan highlands, a small population
of P. graminis evolved the means to overcome mankind’s most ingenious genetic defenses. This distinct
new race of P. graminis, dubbed Ug99 after its country of origin (Uganda) and year of christening (1999),
is storming east, working its way through Africa and the Middle East and threatening India and China.
More than a billion lives are at stake. “It’s an absolute game-changer,” says Brian Steffenson, a cereal-
disease expert at the University of Minnesota who travels to Njoro regularly to observe the enemy in the
wild. “The pathogen takes out pretty much everything we have.”

Indeed, 90 percent of the world’s wheat has little or no protection against the Ug99 race of P. graminis. If
nothing is done to slow the pathogen, famines could soon become the norm — from the Red Sea to the
Mongolian steppe — as Ug99 annihilates a crop that provides a third of our calories. China and India, the
world’s biggest wheat consumers, will once again face the threat of mass starvation, especially among their
rural poor. The situation will be particularly grim in Pakistan and Afghanistan, two nations that rely heavily
on wheat for sustenance and are in no position to bear added woe. Their fragile governments may not be
able to survive the onslaught of Ug99 and its attendant turmoil.

The pathogen has already been detected in Iran and may now be headed for South Asia’s most important
breadbasket, the Punjab, which nourishes hundreds of millions of Indians and Pakistanis. What’s more,
Ug99 could easily make the transoceanic leap to the United States. All it would take is for a single spore,
barely bigger than a red blood cell, to latch onto the shirt of an oblivious traveler. The toll from that would
be ruinous; the US Department of Agriculture estimates that more than 40 million acres of wheat would be
at serious risk if Ug99 came to these shores, where the grain is the third most valuable crop, trailing only
corn and soybeans. The economic loss might easily exceed $10 billion; a simple loaf of bread could
become a luxury. “If this stuff gets into the Western Hemisphere,” Steffenson says, “God help us.”

He and his fellow scientists around the world are scrambling to halt the pathogen. To do so, they must
figure out a way to reach deep within the wheat genome and create genetic barriers that Ug99 cannot
overcome. And they must do so quickly, before the pestilence moves on to the next continent, and then the
one after that — wreaking havoc on the world’s food supply.

Full Text: http://www.wired.com/magazine/2010/02/ff_ug99_fungus/all/1

March 2010 – Food and Agriculture Policy Research Institute (FAPRI)
The Food and Agricultural Policy Research Institute (FAPRI) provides analysis of agricultural and biofuel
markets and policies for Congress and other decision makers. This report presents a summary of ten-year
baselineprojections for US agricultural and biofuel markets.

Things to look for this year

Net farm income fell sharply in 2009 because of a large reduction in commodity prices from their 2008
peaks. This report suggests future recovery in farm income will be tied to developments in the broader
macro economy.

•Renewed income growth in the United States and other countries in 2010 increases consumer demand for
meat, dairy products and clothing, contributing to higher prices for cattle, hogs, milk and cotton.
•As the world economy grows, energy demand increases and average oil prices rise. The combination of
rising oil prices and increasing biofuel use mandates results in continued growth in biofuel production.
•While a world economic recovery supports commodity prices, large global grain and oilseed supplies put
downward pressure on prices for many crops in 2010.
•After peaking in 2008, farm production expenses dipped in 2009 and only increase slightly in 2010. Net
faro income recovers from the 2009 low, mostly because of greater livestock sales receipts.
•Policy decisions will continue to affect agricultural market results. For example, not extending biodiesel
and ethanol tax credits would have important impacts under some market conditions.
The extreme price volatility of 2007-2009 may continue, as many of the factors that caused recent price
swings remain in flux. FAPRI recognizes this uncertainty and considers 500 alternative outcomes for the
future based on different assumptions about the weather, the price of petroleum and other factors that will
affect the supply and demand for agricultural commodities. The tables which follow generally report the
averages of the 500 alternative outcomes, but it is important to recognize that actual market results may
vary greatly from the reported averages.

Full Text: http://www.fapri.missouri.edu/outreach/publications/2010/FAPRI_MU_Report_01_10.pdf

March 2010 - .biosciencemag.org

Releases of greenhouse gases (GHG) from indirect land-use change triggered by crop-based biofuels have
taken center stage in the debate over the role of biofuels in climate policy and energy security. This article
analyzes these releases for maize ethanol produced in the United States. Factoring market-mediated
responses and by-product use into our analysis reduces cropland conversion by 72% from the land used for
the ethanol feedstock. Consequently, the associated GHG release estimated in our framework is 800 grams
of carbon dioxide per megajoule (MJ); 27 grams per MJ per year, over 30 years of ethanol production, or
roughly a quarter of the only other published estimate of releases attributable to changes in indirect
land use. Nonetheless, 800 grams are enough to cancel out the benefits that corn ethanol has on global
warming, thereby limiting its potencial contribution in the context of California’s Low Carbon Fuel

Full Text: http://www.aibs.org/bioscience-press-releases/resources/Hertel.pdf

April 13-15, 2010 Sharm El Sheikh, Egypt

Russian Grain Union and APK-Inform Agency declare about holding of the regular International Grain
Trading Conference in Egypt, which will traditionally take place in Sharm El Sheikh, on April 13-15, 2010.
Despite rather essential growth of competitiveness between American, the Black Sea and European grains
on the markets of the countries of the North America and Middle East in the current season, it is obvious
that there are no alternatives of the Black sea grains in the region. Besides, high harvest of grains owing to
favourable weather conditions caused reduction of import needs of the countries - in the North Africa by 6
mln tonnes compared to 2008/09 (5 mln tonnes - lower imports of wheat). Morocco and Algeria will
essentially decrease their dependance on imports. At that, Jordan, Saudi Arabia will not only decrease, but
probably increase import volumes.

At the same time, since beginning of the season, importers have concentrated on struggling for
improvement of qualitative conditions, and tried to discredit wheat from the Black Sea region on the
markets of Egypt, Syria and other countries.

In such conditions, exporters from the Black Sea region had to lower own prices and actively looked for
new markets. At the same time, the North Africa and Middle East are strategical export directions, and
even the temporary worsening of competitive positions on the markets will not cause any negative
consequences in long-term and medium-term prospects. That is why, it is important to provide active dialog
of exporters from the Black Sea region and importers of the mentioned regions concerning all problematic
issues of cooperation in the current season.

Assisting to the active dialog between the Black Sea exporters of wheat, maize, barley and other crops and
importers from the countries of the Arab world concerning the development of grain trading through
solving of grain quality problems will become the main target of the International Grain Trading

More information: http://www.agrimarket.info/conferences/gtc2010/

June 8, 2010 – London, England

LONDON, ENGLAND — The annual International Grains Council (IGC) Grains Conference will be held
June 8 at the Queen Elizabeth II Conference Centre, Westminster, London. The event will bring together
the world’s decision-makers and stakeholders to discuss the key issues affecting international markets and

The theme of this year’s conference is: "The new decade: towards greater market stability?"

IGC noted that leading industry and government speakers will present their views on current grains and
oilseeds developments and consider scenarios for the new decade. IGC said that after vigorous expansion in
global grains and oilseeds trade in the past 10 years, medium-term forecasts suggest continued growth as
economies recover from the economic downturn and as demand increases further. While markets remain
unpredictable, especially after the dramatic upheavals in recent years, improvements in transparency and a
better appreciation of likely future trends are vital ingredients for a more stable trading environment.

With over 400 delegates attended last year’s conference, IGC noted the conference provides excellent
opportunities for networking.

The conference will provide simultaneous interpretation in eight languages: Arabic, English, Chinese,
French, Italian, Portuguese, Russian and Spanish.

For more information about the Conference and to register, please visit the IGC web site:

Global Trade Analysis Project (GTAP),

The Global Trade Analysis Project (GTAP), is coordinated by the Center for Global Trade Analysis, which
is housed in the Department of Agricultural Economics at Purdue University. GTAP's mission is to provide
leadership in economic policy analysis through better data, fostering collaboration and research.


Center for Global Trade Analysis - Working Papers


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