Grain prices have been rising for 18 months, but are once again on a downward trend. For wheat, the price of the “rendu Rouen” reference rate stood at 175€ per tonne at the end of November, against 270€ in early February.
This drop in wheat prices has led to a “squeeze” situation where the prices received by producers are below their production costs, posing risks to their income and their ability to invest.
Therefore, price volatility, which is one of the major challenges on the current debate on food security, is not reflected solely by price spikes, but also by major drops, which can last several months.
We note in passing that the world grain balance did not change significantly from one year to the next: a deficit of 7 million tonnes of wheat was offset by a surplus of 7 million tonnes of maize. This confirms that the inherent instability of unregulated agricultural markets is amplified by speculation.
French farmers are far from being alone when suffering the adverse effects of this volatility, brought on by a multiplicity of factors that go far beyond the simple conflicts in market fundamentals. Due to the agricultural sector’s specificities, which is subject to important exogenous and endogenous risks, even small variations in supply leads to very significant variations in price.
It is therefore absolutely essential to establish, in Europe and more largely, globally, regulatory measures to stabilize prices at remunerative levels for farmers. The work undertaken this year as part of the Agricultural G20 paved the way to change that must now be brought into fruition and continued. This, indeed, is the essential condition for a sustainable increase in production and the improvement to global food security.