Grains Update: Interview with Arnaud Petit from the IGC
Grains Update: Interview with Arnaud Petit from the International Grains Council
In the run up to London’s International Grains Conference on the 19th – 20th June 2018, Trade Finance Global spoke to IGC’s Executive Director, Arnaud Petit about some of the recent changes in the soft commodities market and what has driven market trends in the first half of 2018.
From the Grains Trade Convention to the Future of International Grain
Arnaud Petit was appointed Executive Director of the International Grains Council (IGC) in February 2018. His duties are to administer the Grains Trade Convention, 1995 and Food Assistance Convention, to implement cost efficient management of the organisation and provide authoritative information on world grain and oilseed market developments for dissemination to member governments, subscribers and the public also fostering co-operation between governments and the industry.
From 2005- 2017 Mr. Petit was the Director for Commodities and Trade at the European Farmers and agri-cooperatives Union (Copa-Cogeca). He led a team monitoring 21 commodities and EU trade negotiations. He was also a Member of the Executive Committee of the European Technology Platform “Plants for the future” (2009-2017) and a Member of the Experts Group on EU-US trade negotiations at the European Commission (2014-2017).
From 2000 -2005 he served as Policy Advisor for European Affairs at the National Chamber for Agriculture in Paris, and Deputy Member of the European Economic and Social Committee (2000-2005).
What is the International Grains Council and what does it do?
IGC is an intergovernmental organisation based in London offering independent daily analysis on grains, oilseeds and rice markets (16 commodities) to 52 member governments to promote international trade in grains. It also provides information to non-government subscribers.
IGC provides an important international platform for discussions between policy makers and the private sector by organising an annual conference. The 27th IGC Grains Conference and workshop will be held on the 19th-20th June 2018.
The IGC also serves as the Secretariat for the Food Assistance Committee helping to facilitate networking within the donor community to improve the efficacy of food assistance.
How has 2018 fared in terms of International Grains and Soft Commodities?
The 2017/2018 marketing year seems to be a transition period after 4 years of stocks accumulating in the major grains. The drought in Argentina but also uncertainty on trade policy have contributed to some bullish sentiments in grains commodities markets. International trade in grains and oilseeds remains dynamic in relation to Asian demand. Consumer demand and new developments are perhaps the main challenges to follow in the future as things can change so quickly.
On top of that, the logistic issue, mainly inland infrastructure continues to be the weak point in the supply chain.
What are you looking forward to the most from the IGC this year?
The IGC should continue to be a neutral reference in terms of monitoring the price making mechanisms. We monitor 16 commodities. The challenge for us is to improve our understanding on the demand since this is a component of the supply and demand balance sheet where official data is often lacking and where, consequently, a lot of estimation is undertaken. Of course, the IGC has vast experience in this area, especially in the monitoring of global trade flows and import demand. This is an important statistical platform which we have built into something substantial over a number of years. Nevertheless, demand trends are something we will continue to focus on amid efforts to improve our understanding and to foster increased market transparency. The IGC is also looking to build new relationships, particularly though regional collaborations, in the grains, oilseed and rice sectors.
Is tech disrupting the grains and soft commodity space – how so?
Technology has a potential to disrupt grains and soft commodities as it provides a tool to bargaining the position along the value chain to whoever introduces it. But we have to bear in mind demand drives the main market forces. Therefore, the only way not to be a price taker is to develop some new technologies along the value chain which respond to the consumer demand, meaning affordable commodities and produced in a sustainable way. This is the dilemma participants of the IGC conference will debate in the 3 workshops on sustainable value chain enhancement for grains, oilseeds and rice.
What are the biggest challenges in the market right now?
Forecasts for the 2018 forecast are still under pressure by weather conditions in the major producing countries but due to the demand trend, trade in grains may reach a new peak in 2018/19 to approx. 368 mt with shipments of oilseeds (soybeans) also set to expand to a new record according to the IGC’s most recent assessment. Therefore uncertainty in trade policy may make the difference.
What are the key aims and focus for the conference, and what do you think the big themes will be?
The focus of the conference is about maintaining a dynamic market despite the potential for another bumper global grains harvest. The first session will address the point of views of the main exporting countries such as USA, Canada, Argentina and Kazakhstan. The second session will examine the conditions needed to generate returns in the current economic climate where the financial market outlook is becoming more and more relevant. The issues of new technologies and trade will focus on new opportunities and challenges along the supply chain.
The IGC conference attracts an international audience from the private and the public sectors. We are aiming to welcome over 300 participants from around the world. Therefore, an active participation from the audience would help generate ideas for the IGC’s future work.
IGC International Grains Conference details:
Location: Queen Elizabeth II Centre, Westminster | London, United Kingdom | June 19-20
The IGC event has been extended to 20 June 2018 with 3 workshops.
This will provide a unique opportunity for stakeholders to enter into dialogue with the IGC secretariat to discuss further challenges. This year the workshops will address issues regarding technical barriers to trade in grains, new trends in oilseeds demand and the use of sustainable production in tackling the instability in the rice market.
The programme will focus not only on the traditional topics related to the supply, demand and market trends, but also on investment opportunities, risk management, trade finance, new farming technologies, robotics, crop monitoring, grain storage, logistics and shipping.