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Markets Signal Rationing; Focus on South America

Markets Signal Rationing; Focus on South America

10 October 2012

GLOBAL - World grain markets are showing signs of rationing after a series of poor harvests pushed commodity prices to a high level, according to a leading market analyst.

Alexis Pouye, Managing Director of Offre & Demande Agricole (ODA) UK, said there were signs that the markets were moving towards equilibrium, but there were still a number of factors that could cause volatility.

“A few weeks ago we were saying that rationing was necessary and now it is starting to happen. In the short term the markets may come under pressure, but after this prices should remain at relatively high levels,” he said.

Mr Pouye was speaking at a briefing hosted by CropWorld Global 2012, in the lead up to its conference being held at the Queen Elizabeth II Conference Centre, London, from the 6th – 7th November.

“A combination of political factors and weather events, including the financial crises in Greece and Spain, dry conditions in Western Europe and the Russian and US droughts, has created an exceptional situation,” he said.

“The pig inventory is showing signs of rationing, and we have seen ethanol producers margins drop, but the South American harvest is where the focus will be in the short term,” he said.

CropWorld Director Terri D’Elia said the current harvest reports and the influence of adverse weather events had meant there was a renewed emphasis on crop science and technology.

“The harvest reports we have been seeing for 2012 have highlighted the rising demand for food and the rising costs of productions, as well as the pressures of land and water resources. At CropWorld Global we offer a platform for industry leaders to debate and explore new solutions to the issues of crop production,” she said.

Top image via Shutterstock



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