Global Crop Production Increases in 2011
9 August 2011 With the stability of the world’s economies in question, key factors affecting both the agrochemical and seed markets such as crop commodity prices are increasing in volatility, according to a report by Phillips McDougall.
An increase in demand for crops used for biofuel is one of the key factors that contributed to a growth in global crop commodity prices beginning in 2007. In addition, economic development and a rise in food demand in Brazil, Russia, India and China also lended a hand to the commodity price increase.
In 2008, drought in Australia and unfavorable weather in Europe caused crop prices to jump. The following year, wheat and maize declined. Currently, the level of volatility is significant as crop commodity prices have continued to rise since 2010, according to Phillips McDougall.
Export prices continue to rise in 2010/11 because of lower wheat, maize, soybean and oilseed crop harvests in Eastern Europe, mainly Russia and the Ukraine and also in Canada. Current trends in crop production show 2010/11 estimates at 820.62 million tonnes for maize and 648.21 million tonnes for wheat, according to USDA World Agricultural Supply and Demand estimates in June. Estimates show ending stocks of 117.44 million tonnes and 184.26 million tonnes for maize and wheat in 2010/11, respectively.
At the beginning of 2011, the crop protection market began on a positive note. Agrochemical prices are currently comparable to 2010, and there are no crop shortages, according to Phillips McDougall. While some analysts were concerned that overproduction might cause crop prices to fall, a late planting season in the United States and other weather conditions have stabilized crop prices and provided a positive outlook for the crop protection market in 2012.
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