the bulk grain trade in a complex policy environment
TRANSCRIPT
The Bulk Grain Trade in a Complex Policy Environment: Lessons from NAEGA and the IGTC
Dry Bulk Terminals Group Fall Operational and Technical Seminar
Ryan Olson Director of Operations North American Export Grain Association
Working Together to Make Trade Work
CGC NAEGA, NCGA, NGFA, USGC,
USW, CRA, USSEC
ANIAME, APPAMEX
COCERAL
GAFTA
Eastern Africa Grain
Council
CIARA-CEC
GTA, AGEA
CNFA, CNAGS, CGBA
SOPA, SEA
CAPECO
Geneva, Switzerland
ANEC
RGU
SACOTA
UGA
26 associations, 8000 businesses, 85 countries
71,411
57,889
2011-16 Annual Average International Trade of Grains and Oilseeds
Canadanet38,577U.S.net114,638
Mexiconet(22,139)
1,397
Caribbean&CentralAmerica
Regionnet(11,978)
RegionalExportsRegionalImports 270,615
36,372
SouthAmericaBrazilnet130,106
Argentinanet109,440Othersnet(5,302)
1,375
49,550
NorthAfricaRegionnet(48,175)
EURegionnet57,095
6,336
39,571
Sub-SaharanAfrica
SouthAfricanet(2,547)Othersnet(30,688)
4,780
3,503
Non-EURegionnet(1,277)
Valuesin1000MTSource:TheU.S.DepartmentofAgricultureForeignAgricultureServiceProduction,Supply,andDistributionDatabase.Updated10/11/2016VLM.Valuesdonotincludeintra-regionaltradewithintheEuropeanUnion.Totalsinclude:grains–barley,corn,millet,mixedgrain,oats,milledrice,rye,sorghum,wheat;meal–copra,cottonseed,fish,palmkernel,peanut,rapeseed,soybean,soybean(local),sunflowerseed;oil–coconut,cottonseed,olive,palm,palmkernel,peanut,rapeseed,soybean,soybean(local),sunflowerseed;andoilseed–copra,cottonseed,palmkernel,peanut,rapeseed,soybean,soybean(local),sunflowerseed.
6,521
70,566
MiddleEastRegionnet(64,045)
27,520
26,895
SouthAsiaIndianet11,178
Othersnet(10,452)
4,419
30,518
OceaniaAustralianet28,480Othersnet(2,380)
SoutheastAsiaRegionnet13,522
13,214
70,309
159,372
4,733
EastAsiaChinanet(92,137)Japannet(32,730)Koreanet(19,467)Othersnet(10,305)
FormerSovietUnionRussianet20,760Ukrainenet35,090Othersnet1,246
13,375
54,785
68,337(44,417)
175,493
2.5BMTGlobalProduction
InternationalTrade
Local/Regional
Bruinsma,Jell.“TheResourceOutlookto2050”
FAOExpertMeetingonHowtoFeedtheWorldin2050
• Roughly300millionmetrictons–about12percentoftotaldemand–enterintoworldcereal&oilseedtrade,improvingdiversityoffoods,improvingnutrition&fillingfoodneedsindeficitareas
• Worldfoodtradehelpsassureadequacyofdietfornearlyabillionpeopletodaybycomplementinglocal®ionalsupplies
Today – 7 billion rely on 2.5 BMT (cereals and oilseeds)
4.0BMTGlobalProduction
InternationalTrade
Local/Regional
• Trade’scomplementaryrolegrowsmorecrucial,&willoutplacemarketgrowth
• 1.5BMTmorefromtheworld’sbreadbaskets&otherareasisneeded
• Areasofoptimalland/watermaycontributemostwithleastenvironmentalstress
• Anestimated600MMTofgrains&oilseedsfromareasofsurplus–about15percentoftotalproduction–willbetransformed&deliveredforconsumerneeds.
InternationaltradewillplayalargerroleCarryingfoodtoamoreurbanpopulation
Bruinsma,Jell.“TheResourceOutlookto2050”FAOExpertMeetingonHowtoFeedtheWorldin2050
Tomorrow = Much More
Key Industry Objectives
7
BenefittingallfromProducertoConsumer
MoreTrade,IncreasedDemandforSafety,SustainabilityandSystemReliability,ResponsibilityandResilienceBESTCOMMERCIALandOFFICIALPRACTICES
• System integrity, predictability, and reliability. • Consistent and understandable requirements that enable markets to trade products and
provide for proportionate and effective risk mitigation and management. • Appropriate measures that allow grain systems to maximize the value of the grain
product and minimize cost inefficiencies and handling costs associated with the supply chain, while meeting plant protection needs.
• Respecting private contract terms and commitments
Aim: to achieve a market and regulatory environment supportive of trade that avoids
disruptions in the international trade of grain, oilseeds, pulses and derived products.
8
International Grain Trade Coalition (IGTC)
www.igtcglobal.org [email protected] +41 78 932 96 18
IGTC’s work with international partners
UN FAO 194 governments International Plant Protection Convention 183 governments World Customs Organization 180 governments World Trade Organization 162 governments International Grains Council 55 governments Global Low Level Presence Initiative 15 governments
1) Crop protection product approvals & residue measures
Policy opportunities in 2018
4) Harmonisation of phytosanitary control methods; UN International Plant Protection Convention (IPPC)
2) Innovation in electronic trading documentation
3) Plant Breeding Innovation
5) Cartagena Biosafety Protocol
6) Low Level Presence
11
Maximum Residue Limits (MRLs) Why now?
Decision makers
Governments, Codex Alimentarius Commission through the Codex Commission on Pesticide Residues (CCPR) and Joint Meeting on Pesticide Residues (JMPR), World Health Organization, Food and Agriculture Organisation (FAO)
Initiative Enabling more effective use of standard-setting focused on science- and risk-based approaches for the facilitation of the global grain trade
Issues At present, non-alignment is more common than alignment • Zero or near-zero default tolerances • Application of different levels of MRLs in exporting and importing Missing MRLs
resulting from misaligned policies
IGTC action
• IGTC position paper established for global advocacy (June 2017) • IGTC global MRL survey (May 2018) • Collaboration with other agri-food value chain partners (e.g., Coalition for an
Enhanced Codex)
MRLs: why and how IGTC engages
There is already widespread use of electronic trading documents…
13
IGTC survey, 2016: digitization of trading documentation
…but companies do not currently use electronic documents for all
transactions
An increasing number of industry players are aiming for at least
50% of transactions to move to electronic documentation by 2018
Industry planning for wholescale adoption by 2025: 75-100% of
electronic trade documentation for all documents in one transaction
Current state of play The look ahead
14
Electronic trading documentation: IGTC fostering an enabling environment
IGTC chairs the ‘Industry Advisory Group’ of ePhyto Solution
IGTC attends the biennial ePhyto Symposia
Above all, IGTC is continually seeking more efficient, fast and flexible solutions to facilitate trade documentation
Grain trading companies are ready to assist in ‘testing’ of the ePhyto exchange ASAP as acceptable for ESG and NPPOs
IGTC has deployed a network of ePhyto focal points (Argentina, Australia, China, Europe, Kenya, USA)
✓
✓
✓
✓
✓
IGTC is committed to promoting
innovation
Decision makers Governments: national and regional approaches to regulation are already diverging
Initiative Strategic approach on achieving alignment in regulatory approaches and information sharing along the value chain
Issues Regulatory coherence, predictability and stability for the trade, transparency, responsibility across the supply chain
IGTC action
1. IGTC position paper established for global advocacy (Nov. 2017) 2. Oversight of updates of global innovation status sheet on eight groups of tools 3. Engagement with partners, e.g., International Seed Federation, Grocery
Manufacturers’ Association, etc. 4. Emphasis on information-sharing of products in the commercial pipeline and
supply chain management
Plant breeding innovation: why and how IGTC engages
Decision makers
UN International Plant Protection Convention (IPPC): IPPC recognized in WTO SPS agreement as the only international plant health standard setting organization
Initiative Development of an International Standard on Phytosanitary Measures (ISPM) on the International Movement of Grain; 41 existing ISPMs, including on pest risk analysis, phytosanitary certification, and sampling methods
Issues (examples include)
Scope: phytosanitary measures only to be included in the standard – this is not a place for foreign material and associated tolerances; traceability, etc. Transparency: The current lack of access to information about the phytosanitary requirements of importing countries is a major hurdle to trade
IGTC action
1. Advocacy tools established, e.g., position paper, letters to national and regional authorities 2. IGTC leading grain trade input on the standard, convening significant expertise and
representation 3. Coordination of one global voice to secure a trade facilitative ISPM 4. Global outreach effort coordinated, reaching government members of the IPPC’s Standards
Committee; in total, more than half of the SC was reached
International Standard Phytosanitary Measures (ISPMs) for grain: why and how IGTC engages
Decision makers
Convention on Biological Diversity Contracting parties (governments) to the CBP
Initiative 171 parties (governments) have signed up to the Protocol, covering more than 85% of the world’s grain trade
Issues
• Transboundary movement of Living Modified Organisms (LMOs) • Risk management • Socio-economic considerations • Precautionary principle as advocated by certain governments
IGTC action
• IGTC aim: provide evidence to support sound decisions that do not undermine the cost-effective worldwide movement of grains, oilseeds, pulses and other agri-bulks
• Convening of representation and expertise to respond to issues as they emerge among governments
• Next government summit: November 2018, Egypt (so-called “COP14” and “COP-MOP 9”)
Cartagena Biosafety Protocol (CBP): why and how IGTC engages
Decision makers
Governments: The Global LLP Initiative (GLI) of 15 “like-minded” countries UN Food and Agriculture Organization (FAO), Codex Alimentarius
Initiative The accommodation of safety-assessed GM events in the supply chain: encourage countries to introduce LLP policies
Issues
Raise awareness that detection of low levels in an importing country of an event authorized in one or more countries is not a food safety issue, but a legal compliance issue. Trade stops, thereby adversely impacting importing and exporting countries and threatening global food security.
IGTC action
• Awareness raising along the value chain of the importance of process controls • Advocacy with governments to maintain momentum at the Global Low Level
Policy Initiative • Support governments in future initiatives, e.g. practical approaches in
regulatory frameworks
Low level presence: why and how IGTC engages
Improve Predictability and Transparency
• Impossibletoreduceregulatoryorphytosanitaryriskcompletely.
• Impossibleforgovernmentstobecompletelytransparent,reliableandpredictable.
• Globalruleandstandardgetuscloser
Improve Predictability and Transparency
Results in Improving Predictability
ThankYou!
Contact: Ryan Olson Director of Operations
Email: [email protected] Phone: 202-682-4030 Website: naega.org
ThankYou!