Kitahara reflects on several years of expansion

by World Grain Staff
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Accurate information compiled in an objective manner is vital to keep the world’s grain markets informed. Governments and everyone involved in trading and processing grain around the world look to the International Grains Council (IGC) to provide that information. It’s a role which has expanded further since Etsuo Kitahara became the IGC’s executive director just over three years ago.

In an interview with World Grain at his office in London, England, Mr. Kitahara stressed that the IGC remains committed to its role as a provider of information. "Our core function is to monitor and analyze the grain and oilseeds markets and provide market information to our members and stakeholders, in a timely manner, from a neutral point of view as an intergovernmental organization" he said. "Another important function is to provide forums for discussion of members’ concerns."

As well as the IGC’s successful annual conference, which attracts members and industry representatives and achieved a record turnout of over 400 last year, there are also Market Conditions Committee meetings in March and early October and Council Sessions in June and December.

Mr. Kitahara believes the volatility which has affected the grain markets in recent years makes accurate information more necessary than ever. "Any supply concerns in the major exporting countries could trigger turbulence. That’s what we need to watch carefully," he said.

The IGC’s role is providing its members and stakeholders with the information they need to assess the situation. "It needs to be noted that the IGC is not an organization intended to enforce rules or disciplines governing grains trade," he said. "The tools with which the IGC can contribute to world food security are to provide updated market information as well as a forum where policy makers can get together to assess the global situation and outlook."

The big change in the IGC’s role has been the formal recognition of rice and oilseeds. "It took more than one and a half years after I proposed to include rice as a grain in the Convention and for the Council to place oilseeds within its information activities," he said.

The change has meant much wider coverage. "Members recognized that grains and oilseeds should be addressed in their totality," he said.

Rice has changed the geographical focus of IGC and also forced it to look at a market which works in a different way to the international wheat market, for example. Rice markets are highly segmented, ranging from Indica to Japonica types.

"Rice is also a regional crop," Mr. Kitahara said. "Asia accounts for 90% of global production. "In many countries rice trade is still governed by governments, not private traders" he said. The expansion in oilseeds coverage means that the IGC will be able to provide better information on biofuels. "It will enable the Secretariat to provide more information on biodiesel as well as bioethanol so that there is total information on biofuels," he said. "The surge in the use of grain for ethanol has been remarkable."

However, it had not caused as much disruption as some had feared. "There were some concerns from importing members about export availabilites of maize (corn) from the U.S.," he said. "What we observed was the power of the market. The market mechanism has functioned well by substantially increasing production to offset the growing use of maize for ethanol."

There is more information now from the IGC on genetically modified crops.

The IGC won’t take sides on whether GM crops should be sold more freely. "The issue is about public acceptance," he said. "It is consumers who will decide what to buy and what to eat."

As well as expanding its coverage in terms of commodities, the IGC also provides information about trade measures and related national policies. He pointed out that the countries which have restricted exports were not breaking any rules. "In the end, there are no disciplines against export restrictions in the WTO," he said. "When there are shortages, you can’t expect them to export." At the same time, importers are understandably concerned about the reliability of supplies."

Although government measures taken had an impact on markets, he advised against being too concerned about their effects. "News of some countries’ introduction of export restrictions could stoke up movements in markets, but when we check actual exports sometimes there’s not much of an effect," he said.

Providing more information has meant much more work for the IGC’s small secretariat. "The IGC has 17 members on staff," he said. "Over the past decade we’ve expanded the coverage of commodities from 8 to 15."

The seven new commodities are rice plus the six products covered under the heading of oilseeds: soybeans, soy meal, soy oil, rapeseed/canola, sunflowerseed and palm oil. The extra work means there isn’t likely to be any further expansion of the IGC’s coverage.

The IGC’s executive director aims to increase the number of members, bringing in some countries which are playing an increasing role in the world grain market, but which have, so far, remained outside the IGC structure.

"We are working on potential new members," he said. IGC membership is complicated by the need to get all the right departments in a government involved. "The membership issue can involve several ministries: foreign affairs, trade and, of course, agriculture," he said. "We have just one office in London, so it’s not easy."

The IGC is involving non-member countries, for example, by receiving observers at its Council meetings and at the IGC conference. For instance, Brazil, China and Indonesia have all recently attended. "It enables us to expand our networking" he said. "We will have several speakers from non-member countries at the next conference."

LOOKING FURTHER AHEAD

A further expansion of the IGC’s role has been to take a look at the longer term, with new five-year projections of supply and demand for maize, wheat and barley. "We have previously focused on forecasting for the next year until very recently," he said. "It’s not the easiest thing to provide five-year projections, but we want to give a sense of direction in terms of supply and demand for grains."

Other changes are on the way. Members of the Food Aid Committee have realized that the Food Aid Convention needs to be rewritten. "There’s a growing recognition among donors that it’s necessary for them to formulate a new convention, focusing even more on the needs of the recipients," he said. But they have to wait until a new WTO agreement has been reached, because it set the framework under which food aid takes place. "Members have started to discuss informally what the objectives of a possible new convention should be," he said. "They cannot move this process forward until the outcome of the WTO is known."

"Meanwhile, members of the Food Aid Committee are identifying areas where it can improve actual food aid operations," he said. "They’re trying to improve the effectiveness of these operations."

For more information about IGC, visit www.igc.org.uk.

Chris Lyddon is World Grain’s European editor. He may be contacted at: chris.lyddon@ntlworld.com.

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