Grain and soya trade outlook mixed - October 2009

have emerged recently. Many seaborne commodity
movements could regain some positive momentum
during the period ahead. But prospects for the largest single
trade, China’s iron ore imports, are less certain: a flattening
or temporary decline in monthly volumes could be seen in
the immediate future. An accompanying acceleration of
bulk carrier fleet growth is also evident.
A more encouraging outlook for global economic activity
is unfolding. An Asian Development Bank update published
at the end of September observes that “the global economy
may just be coming out of its worst downturn since the Great
Depression of the 1930s.” Most of the countries which were
hit hardest seem to be returning to growth. How solid or
GRAIN
Much better domestic harvests in a number of key
importing countries around the world are adversely
affecting the outlook for grain trade. According to the
latest International Grains Council calculations, world trade
in wheat plus corn and other coarse grains could be 23mt
(million tonnes) or 9% lower, in crop year 2009/10 ending
June, at 224.1mt.
Conversely, soya import demand is likely to increase. After
a 5% decline in marketing year 2008/09, US Dept of
Agriculture estimates summarized in table 1 show global
soyabeans and meal trade growing modestly by 3% in
2009/10 starting October, reaching 129.6mt. Although
China’s imports may weaken, other buyers in Asia and in
Europe and elsewhere are expected to need larger volumes
IRON ORE
Steel output among key raw materials importing countries
looks set to begin a recovery in the months ahead, after
declining dramatically over the past 12 months. During
January–August 2009, European Union pig iron production
was an enormous 45% lower than seen in the same period
of last year, and Japan’s production was 31% lower. China, by
contrast, achieved a 9% increase.
Despite huge reductions in European, Japanese and Korean
iron ore imports this year, expansion in China has provided
great support. Recent Abare estimates suggest that,
consequently, world iron ore trade growth of about 2% is
foreseeable in 2009 as a whole. For 2010, these analysts
predict a strong acceleration, with a 10% rise to 995mt,
reflecting growing requirements in all the main importing
COAL
Some elements of coal trade are expanding robustly this
year. While negative influences have been particularly
noticeable in the coking coal sector, against a background of
very weak steel production in many countries, China’s coking
coal imports are an exception. Much higher Chinese
purchases reflect higher steel output and attractive
international coal prices.
India’s coal imports also are a very positive element, and
indications point to a continuation of the upwards trend
through 2010. The total for imported steam and coking coal
reached 58mt last year, and may increase by around 15%
this year. This expansion reflects shortfalls in Indian domestic
coal supplies, the superior quality of foreign material, and
MINOR BULKS
Fertilizers — including phosphate (rock and semi-manufactured
varieties), potash, sulphur and urea —
comprise a sizeable element of minor bulk commodity trade.
Global seaborne movements evidently exceeding 120mt
annually. According to some calculations, however, the total
BULK CARRIER FLEET
Forecasts of very rapid expansion in the bulk carrier fleet as
a whole in 2009 contrast with expectations of fairly
moderate growth in the Panamax-size group. As suggested in
table 2, Panamax newbuilding deliveries probably will be
sharply higher this year, but scrapping is also likely to rise.
The result may be a smaller net increase in this sector’s fleet