China Anticipated to Continue Influencing Agriculture Commodity Demand in 2013
By Amanda Brodhagen, Farms.com
Rabobank released the results of a poll conducted at the most recent Markets Forum held in New York City with 350 executives from the food, beverage and agribusiness sectors identifying the key issues for 2013.
The following are some of the key influences that the attendees identified:
•China’s role in agricultural commodity supply and demand
•China’s role in driving economic growth
•Weather volatility
•Enhanced risk management practices
•Corn yield projections
•Impact of social media forces
•Public perception for GMO’s
When respondents were asked to name a country that they believe will play the biggest role in driving agriculture commodity demand over the next 10years. The following was the breakdown:
•China – 61%
•India – 14%
•Africa – 10%
•Latin America – 9%
•Southeast Asia – 6%
China
While views were mixed when asked about China’s long-term economic dominance, 41% believed that China would remain one of the leading drivers of economic growth over the next five to ten years, while 40% of others said China will play a bigger role and be a driver for economic growth for the next 50 years.
Weather
Respondents also identified weather as the single biggest factor affecting agribusiness in 2013. Weather volatility was named by 68% of participants as the biggest factor and was significant compared to the other factors that were identified – consumer demand (13%) and policy/regulation (10%).
Risk Management
Tied to weather volatility, 59% of participants said that the 2012 drought changed their views on risk management. Respondents outlined that financial liquidity; increased investments in insurance, greater diversification will be vital approaches in order to manage volatility in commodity markets.
Corn Yield
When projecting corn yields, 66% of respondents predicted that U.S. corn yield will exceed 200 per acre by the year 2025, while over 90% said they expect yields to exceed 170 bushels per acre by 2025.
Social Media
When responds were asked if the rise in social media has changed how they manage brand, reputation management and communications - 51% said yes while 9% said it’s only changing how they manage customer and supply chain management. The last group of responds37% said they aren’t making any business changes in response to social media.
GMO’s
When respondents were asked what factors that they think would encourage more adoption of GMO technology in agriculture 56% said cost, while 37% said that it will be consumer acceptance.