International Grains Council celebrates 50th anniversary

by Teresa Acklin
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Fundamental changes seen in grain economics, technology in past 50 years

   The 1999 International Grains Conference in London in June marked the 50th anniversary of the formation of the International Wheat Council, pre- decessor to the International Grains Council, and the first International Wheat Agreement in 1949.

   There have been fundamental changes in the economics and technology of grain production, handling, transportation and marketing since 1949, Germain Denis, the council's executive director, said in his opening remarks. “Technology (in 1949) had just begun to make an impact on yields and productivity in a few advanced countries,” he said. “Biotechnology was certainly not a hot topic and green revolutions in developing countries had yet to begin.”

   The role of public stocks has declined and marketing and distribution systems have evolved toward privatization and deregulation, Mr. Denis said. There is now a greater role for traders and merchandisers, more accountability to producers and more direct seller-customer relationships, he said. Policy reforms have begun to restore market orientation and greater sensitivity to price signals.

   The first International Wheat Agreement was about the regulation of exports within fixed price ranges, and market transparency was not given the same attention it currently receives, he added.

   Annual trading volumes for wheat have quadrupled since 1949, and those for coarse grains have grown even more, with the biggest growth in the 1960s and 1970s, he said. Developing countries in Asia, Africa and Latin America have become the engine of demand, accounting for three-quarters of the trade in wheat and nearly as much in coarse grains. Food aid has contributed to trade flows while improving the food security of developing countries as a result of 30 years of food security under successive Food Aid Conventions since 1968.

   The product composition of trade flows also has changed, Mr. Denis said. “Value-added products and food processing have contributed to a diversification of the market,” he said. “Consumers are making a difference by demanding a greater variety of grains and expecting quality, public health safety and reliability.” Turning to the short-term outlook for the market, Mr. Denis said that availability of grain for the next crop year remained plentiful but there would be some draw down of stocks as global consumption exceeded production. Demand for an additional 6 million tonnes is expected to come mainly from the drought-affected countries in Near East Asia.

   Global output of wheat is expected to decline for the third consecutive year but economic conditions in parts of Asia and South America will probably prevent a substantial return to increased consumption, Mr. Denis said. The fall in coarse grain production will be less marked, he added, and consumption is likely to be well below last year's as many countries in Asia struggle to revive their feed industries.

   Over the next five years, the expected expansion in the trade of wheat will likely come from the geographic and product diversification of markets achieved in recent years, Mr. Denis said. Future wheat growth will be tied to the requirements of larger, more urbanized, more prosperous and better-fed populations in developing countries.

   The Council expects a substantial rise in trade in coarse grains by the year 2005, assuming Asia and other developing countries resume reasonable economic growth. The coarse grains sector is also likely to benefit most from changes in marketing and distribution systems and from consumer needs for specific qualities of grain, Mr. Denis said.