The IGC now provides coverage on a daily, weekly and monthly basis on 15 basic commodities, having added oilseeds (Soybeans, rapeseed/canola and sunflower seed) as well as rice during Kitahara’s tenure.
Kitahara opened an interview with World Grain at the IGC’s headquarters in London, England in May by highlighting major developments that have occurred in the organization during the past 10 years.
“The first thing I should mention is the expansion of commodity coverage,” he said. “Rice was formally added in 2009, oilseeds in 2013.”
Adding information on these commodities to the IGC menu was not a simple process, Kitahara said. “I guess people might think that it’s straightforward to add rice and oilseeds to wheat and coarse grains, but that wasn’t so because when commodities are added under the Grains Trade Convention, it involves recalculation of votes for members adding trade volumes for new commodities with the number of votes is used to calculate members’ annual contributions.
“What that means is major exporters or importers of rice and oilseeds were asked to pay more as a result of redistribution of members’ votes. In the case of rice, it took four council sessions and two years before members finally reached an agreement to add rice to grains. India and Pakistan were the countries which would have to pay more contributions as a result.”
The move cost India 50% more and Pakistan 30% more beginning in 2009. “Fortunately, India and Pakistan agreed to add rice and, without any conditions, to pay more contributions as the result of a formal agreement.
“The same thing happened for oilseeds. By oilseeds I mean soybeans, rapeseed/canola and sunflower seed. In the case of oilseeds, three members had to pay more contributions as a result of the redistribution of votes.”
That meant increases for the U.S. of 6%, with the E.U. up by 4% and Canada, as a major exporter of canola, up by 2%.
Push to increase membership
The inclusion of oilseeds raised the question regarding major producer Brazil not being a member, something Kitahara has been trying to address.
“In 2012, I had a meeting with the then-Brazilian Minister of Agriculture Mendes Ribeiro at the Brazilian Embassy in London,” Kitahara said. “He said Brazil would rejoin the IGC.
“At that point, IGC members expected Brazil to rejoin the IGC very soon. The Brazilian ambassador to international organizations in London explained to members at a council session it would take at least a year, possibly one and a half years for Brazil to rejoin, for the Congress to approve the IGC membership issue. But nothing happened.”
Since then there have been a series of agriculture ministers in Brazil and the IGC is still hoping that it will become a member.
Kitahara is hoping to meet the current minister during a visit to São Paulo in July. Brazil was a member until 1991, when it decided to leave the then-International Wheat Council for budgetary reasons.
However, other countries have joined in recent years, including Saudi Arabia in 2010 and Iraq in 2014.
“As soon as I heard about the policy change of Riyadh (Saudi Arabia) in 2008 to phase out their domestic wheat production, I began to contact the embassy. Then, I was able to visit Riyadh to explain the benefits of IGC membership to the agriculture minister, (Fahd bin Abdul Rahman) Balghunaim, and their membership followed soon after,” he said.
Kitahara identified three main geographical gaps in IGC membership: Latin America, Africa and Southeast Asia, notably China.
Even without Brazil, IGC members agreed to include oilseeds, which went into effect in July 2013. “The expansion of commodity coverage laid the foundation for IGC to play a greater role in international commodities in association with organizations such as the FAO and OECD, through the AMIS initiative,” he said.
AMIS, the Agricultural Market Information System, is a G20 initiative established in September 2011 under the French presidency of the G20.
“Brazil and another non-member of the IGC, China, are members of the AMIS, so we can engage those countries through the platform of AMIS. What’s important is, in the AMIS, we are one of the international organizations taking the lead in providing more information to the general public,” Kitahara said. “In terms of market information services, it is FAO and IGC that are the main drivers providing market information for AMIS commodities wheat, maize, rice and soybeans, which are exactly the commodities we are focusing on as a result of the expansion of commodity coverage.”
The IGC joined the AMIS secretariat in October 2012.
“No other organizations are providing members and subscribers with daily, weekly, monthly and annual information,” he said.
He said the IGC has resolved to be as efficient as possible as it has added to its offerings.
“Members are asking us to do more using the same amount of resources,” he said. “We are delivering what has been requested by members.”
It is vitally important to increase membership, Kitahara said.
“We need to have more members for two reasons, because if we have new countries as members we will be able to get more information and it would also ease the financial burden of existing members,” he said.
The IGC is focusing on improving contacts with China.
“We will have a six-member Chinese delegation in August from the State Administration of Grain,” he said.
The group will include regional officials, which is one reason it couldn’t be arranged in time for the IGC’s annual conference in June.
“It is very important to have a dialogue,” he said. “China was a member previously, from the 1971 until 1973. At that time, China was represented by the Republic of China, Taiwan. As a result of the one China policy adopted by the UN headquarters, Taiwan was unable to stay in the IGC.
“My hope is to receive two parties as members of the IGC in the future: China, as a formal member of the IGC, then the Taipei Chinese, or Taiwan.”
The China National Grain and Oils Information Center and IGC are exchanging monthly reports.
“That has been very helpful on each side,” he said.
The center is sending a speaker to the IGC’s conference.
“I am visiting Beijing every year to keep them updated on developments in the IGC, and I have asked the Chinese authorities to consider joining the IGC because this year China has the G20 presidency.”
Another challenge for IGC is the growing amount of arrears owed by some members. Arrears came down in the years after Kitahara became IGC director, but the financial problems of some member governments meant that they have increased more recently.
“That is a major concern at the moment,” he said.
Flour production data
Collection of reliable flour production data has been a long-standing challenge, he said. “We are always looking for new sources of information, but official surveys tend to come and go for cost reasons in the countries concerned,” he said. “Reliable flour production statistics remain unavailable for some key countries such as China, India and Nigeria. Egypt’s flour production statistics have restarted with 10 months available for 2014, so hopefully 2015 will provide a full 12 months of statistics for Egypt.
“Figures for Australia have not been available since 2008. That’s a pity. Figures for Italy have not been available since 2012. That’s another problem. Some governments try to cut down costs for statistical services and even the USDA considered dropping some of their surveys a couple of years ago.”
Strengthening ties with grain traders
In recent years, the IGC has worked to build links with commercial grain trade participants.
“The IGC members decided to invite the president of IGTC, the International Grain Trade Coalition, when they met in Buenos Aires last November, with effect from June 2016,” he said.
“So during the next council session we will have Mr. Gary Martin, who is currently president of the IGTC, as an observer. The council will have a regular agenda item from June of this year on a biannual basis under the agenda item ‘Dialog with the IGTC on major policy issues affecting grains trade.’
“I believe it is essential for representatives from the sector and policy makers to discuss issues of common interest and to try to find ways to contribue to trade facilitation.
“The IGC wants to play an instrumental role for stakeholders in the global grain trade sector.”