Grain and oilseeds prices showed a sideways movement at a rather low level due to good crop yields. Despite increasingly difficult conditions, the marketing of rice was further expanded.
The low price level for grain and oilseeds continued in 2017 in a sideways trend. The good weather in South America increased the production there, especially for corn and soybeans. In the USA, we witnessed price increases of the wheat futures due to the weather in the late winter (excessive snowstorms) and then in the summer (drought). Corn and soybean prices also increased short-term on the US futures markets due to the drought.
The good supply situation was, despite the sustained strong demand from the Far East, especially for soybean to China, the reason that seen over the year no significant price increase took place. Likewise, we had a good to very good harvest in the other production areas in the northern hemisphere (wheat record harvest in Russia).
Our most important sales markets in North Africa and in the Near and Middle East were thus well-supplied with goods from the Black Sea region. Wheat from the US and also from France thus found fewer buyers in these regions. With our customers in MENA, however, we as well were able to contract significant quantities of soybean and soybean meal. Our traditional business in Spain, where we mainly supplied feed and milling wheat, also continued successfully this season.
Ship logistics in the Caspian Sea were particularly difficult this year due to the lack of available ship capacities. Nevertheless, we were again able to deliver large volumes of Kazakh and Russian barley to the Middle East.
VAIT traded substantial quantities of rice to Western and North Africa in 2017. Despite increasingly unstable markets, caused by unpredictable government decisions, difficult weather conditions and increased competition, VAIT was able to further expand its rice trading activities. While volumes to West Africa rose slightly, trading volumes to North Africa increased substantially.
Worldwide rice production in 2016/2017 grew by 2.7% compared to the previous period and reached 486 million metric tons. This increase is mainly due to the more favorable weather conditions, which followed the dry phases in 2015/2016. The big exporters in Asia, India and Thailand also had better returns than last year. The trading volume of rice increased to 43.7 million metric tons in 2017 and the flow of goods from Asia to Africa increased significantly. There was a notable development in China, the largest net rice importer, which also significantly increased exports this year, especially to Africa.
The price level on the rice market was generally, as in previous years, rather low and determined by Asia (India, Thailand, Vietnam and Pakistan). India was the largest exporter with attractive prices. South American prices remained at higher levels than the Asian and were therefore not competitive in our African markets. Our largest trading volume in 2017 came from India, where we were able to defend our strong market position. In addition, other sources such as Europe and the United States could be developed.