While there is a lot of focus on China and the impact it will have on the grains and oilseeds marketplace in the short run, a Rabobank analyst recently said India is likely to be a big player in the future.
Rabobank Food & Agribusiness Research and Advisory (FAR) Vice President Sterling Liddell said, “China’s problems with land availability, water issues, slow adoption of technology and an older population present obstacles for future growth. On the other hand, India should emerge as one of the most significant players in the future.”
Currently, 60 percent of the field corn produced in India is grown using hybrid seeds. In comparison, corn hybrids have been used exclusively in the United States for decades. For India, this leaves a lot of room for the use of hybrid seeds to increase, which will increase yields.
Additionally, with a younger population and the fastest growing workforce around the globe, the demand for a higher standard of living is rising in India. This translates into an increase in protein consumption and thus a need for additional feed.
“India has the potential to double its corn yield and poultry production over the next decade,” said Liddell, who made his comments during his presentation, “The Case for Volatility,” which was delivered during this year’s Farm Progress show in Boone, Iowa.
Highlights from around the globe
While India was highlighted in Liddell’s presentation, he also stressed that – for every country – volatility is here to stay. There are tight global stocks, increasing demand and expansion into more volatile geographic areas. Additionally, he also touched upon major themes in Brazil, China, Russia and the United States:
- Brazil – Infrastructure will be key. Often the cheapest corn in the world is found in Mato Grosso, Brazil. However, the high cost of getting it to port limits export growth. As roads are built, the cost of transportation decreases and increases its global opportunities.
- China – In the next few years, China is going to dramatically industrialize its pork production, which could increase its imports of soybeans – and cause the country to start importing corn.
- Russia – Over the past 10 years, Russia has played a greater role in the global wheat supply. However, after this year’s drought the government has banned exports through the end of next year’s harvest. The end result is uncertain, but estimates are that Russia, Ukraine and Kazakhstan will export very little grain for the 2010/11 marketing year.
- United States – This year, 36 percent of the U.S. corn crop will be used in ethanol production. While industry expansion appears to be on a plateau, the government has mandated an additional 25 percent production by the year 2015.