Grain Prices Seen by Economics Professor Chalmin Lower in 2013

Grain prices in 2013 are expected to be lower on average than last year on increased supply, according to Philippe Chalmin, a professor of economics at University Paris-Dauphine who studies food markets. Following are comments he made yesterday at a grain-industry meeting in Evreux, France:

“The situation at the start of 2013 is that we’re still in the third crisis that we’re experiencing in five years. We’re on the razor’s edge.”

“For wheat, the situation will probably be saved by an exporter we hadn’t considered, India. For soybeans, we may have a good surprise from South America. One of their problems, nevertheless, will be to get the Brazilian soybeans out.”

“The only grain for which we have a balanced situation, and therefore prices haven’t reacted a lot, is the rice market.”

“We expect average grain prices in 2013 that will be lower than 2012. But those figures are based on normal weather. I don’t know what the weather will be like in the world in 2013. I don’t know what the temperatures will be, whether there will be a new episode of El Nino in Australia.”

“In 10 years, the world will demand, will consume about 350 million tons of cereals more than today. That’s the challenge. If the market is at high levels, it’s not because of the empty hand of some villainous speculators, it’s the market saying, you have to feed the world.”

China all the same has an obsession, that of food security. There are still a number of regions in China with poverty in food. They know very well that on soybeans their dependence is total. They’re more or less at equilibrium for rice and wheat. Their concern is to have prices for consumers that are stable, because it’s from there that discontent arises. They have no interest in having food riots.”

To contact the reporter on this story: Rudy Ruitenberg in Paris at rruitenberg@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net

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