World Grain - July 2016 - 35

FEATURE: UNCERTAINTIES INFLUENCE GRAIN MARKET

He explained that lower fuel prices
mean lower chemical input prices.
"We would expect farmers to be more
judicious about the fertilizers they're using, but fertilizer prices have been falling," he said.
REFORMS AID THE E.U.
Jens Schaps, director for agricultural
markets in the Directorate-General for
Agriculture and Rural Development
of the European Commission, said the
E.U. is proud of the reforms it has made.
³:HDOOEHQH¿WIURPGHUHJXODWHGPDUkets," he said.
He also explained that the euro rate
against the dollar has given European
producers a competitive advantage.
Lower oil prices have helped farmers. "Crude, for the entire agricultural
sector, is a major input factor," he said.
"This gave a lot of relief for the farm
situation."
A long period of low transportation
costs has also helped. "It certainly gave
a boost for international trade," he said.
"There is little sign that these costs will
increase."
He described the level of stocks as reasonable and not dramatically increasing.
"Since the peaks in 2014, prices have
declined all over the world," he said.
"Prices have picked up again. That is
good news for producers."
What happens to prices next depends
on how the harvest develops. He explained that the E.U. accounts for 20%
of global wheat production.
"For oilseeds, the situation is totally
different," he said. "Europe is dependent
on imports. This is traditionally a problem that Europe has always had. The proWHLQGH¿FLWLVURXJKO\PLOOLRQWRQQHV
"Wheat will continue to be our most
important cereal. We have to recognize
that there is enormous pressure on wheat
production in Europe from environmental requirements."
GROWTH SLOWS IN CHINA
Li Xigui, division director of the
analysis and forecast department
at the China National Grain & Oils

Information Center, described China's
supply and demand situation as relaxed.
"China has become more and more
important," he said. "We are the largest
consumer and importer in the world.
The Chinese economy is one of the
major players in the world economy."
In recent months, however, growth

has slowed in China. "Now we have
reached a transition period," he said.
"Our grain prices are also going down."
The Chinese people are becoming more urbanized and consumption
patterns are changing, he said. "Our
nutrient level is increasing," he said.
"Our own domestic production is in-

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World Grain - July 2016

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