Rising global supply with grain - is that true?
The global cereal supply position determines the price level on the international grain market. Among other things the relationship between harvest and consumption levels, the development of closing stock or the closing stock figure in % of consumption used to assess.
For the fiscal years 2014/15, 2015/16, 2016/17, t can be read off from the USDA estimates rising end stocks between 460 to 500 million . Compared to the figures in the were before that past 3 years between 340 and 400 Mt. Obviously, the production must be increased more than the consumption. The result is a lower price level compared to previous years.
However, the supply ratio of percentage stock of end consumption is better suited for a closer look. Higher or lower end stocks alone say little about the supply risk . On higher level of consumption, higher surplus stocks to the pension coverage is necessary as low at. The above mentioned percentage (in English: "stock to use ratio) provides to the appropriate information.
You could calculate end stocks for consumption between 21% and 24.8% in the recent 3 years. The sliding 10 year through cutting is approximately 21%. For the coming year 2016/17, a supply number is estimated by 24.7%. Comparatively lower than average grain prices are derived from this.
But even this approach is still too little differentiated. For influencing supply at world level, it is essential that a balance between the surplus willing to export and the import subsidy objective takes place. Import-needy regions without purchasing power play little role in the pricing. There are also reluctant to export surplus areas despite large amounts of storage for the price assessment in considering to draw.
China is one of those countries which has accumulated enormous grain stocks in recent years have reached nearly 50% of world reserves. Nonetheless, China is confined to an export volume of less than 1 million tons, but still a net importer by Meanwhile lowered 15 Mio.t per year.
Excluding China from the global consideration of the supply , is relativized the estimation of above-average grain supply for the rest of the world. Supply numbers, which are a good average of the past few years, but characterised by high annual fluctuations are calculated for the younger period.
From the forecast results for the coming year 2016/17 , a gradual decline in the global level can be derived on the basis of a differentiated approach. (see accompanying chart). If the estimates come true, this realization in the further course of the year in the course of the international grain trade will turn out.
