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According to first market report from the Agricultural Market Information System, which was established after June's G20 meeting of farm ministers, 2011/12 global cereal supply outlook has improved in recent weeks as production forecasts have been revised upwards while demand expectations are pointing to less robust growth than had been anticipated because of macro-economic concerns in developed economies.
While uncertainties in financial markets, stemming from looming economic difficulties, continue to influence international food markets, recent weeks witnessed policy decisions in a number of countries. In most cases, the recent policy changes indicate reductions in trade restrictions. India recently removed its export ban on rice. Ukraine suspended the duties on wheat and maize exports, put in place in July 2011, although the levy on exports of barley has been maintained. Overall, Ukraine is expected to export a near-record 22 million tonnes of grains in 2011/12, compared to nearly 13 million tonnes in 2010/11. The Government of the Russian Federation has in July suspended its grain export ban, but has recently announced it may impose taxes on wheat exports if they exceed 24-25 million tonnes. While the details of this policy have yet to be made public, the Russian Federation has certainly the potential to export 25 million tonnes, if not more, following the strong recovery in this year’s production. However, based on the latest analysis, which takes into account world demand, as well as supplies from other exporters, the Russian Federation is currently forecast to export 21 million tonnes in 2011/12 (of which 18.5 million tonnes of wheat), still the second highest level on record. Internationally, the current situation is more one of excess supplies than a shortage, unlike in 2007/08 and again in 2010/11 when export restrictions were imposed contributing to a surge in world prices.
November 2011/ OECD.
http://www.oecd.org/
