'It goes without saying that sufficient grain is declining'

The year is 1872. The Nieuwe Waterweg in Rotterdam is put into use, but the Oranjes locks are also opened. The scheduled connection between Rotterdam and New York, with steamships, is a fact. In 1872, six Rotterdam grain traders came together to discuss Committee of Grain Traders to shape. In 2022, it is still the only trade organization for the Dutch grain sector in feed and food. The Committee is active in promoting interests in both The Hague and Brussels, whether or not through the umbrella European organization.

Can you tell us more about the reason for its founding at the time?
"The immediate reason at the time was the search for more insight and openness about grain prices. A letter with prices was published every week in the NRC. The Netherlands had always been an important trading country. Don't forget that even the VOC traded in grain. Dutch ships, for example, fetched grains from the Black Sea region and Poland. With the arrival of grain elevators and larger ships, import and export scaled up. Until 1980, trade fair days were held weekly in Rotterdam, where traders physically met. Technology made that redundant. Prices are now so transparent that every farmer knows what the stock markets do, whether you live in the Netherlands, Africa or Australia."

You have been chairman of the Committee since May 2021. Do you also trade yourself?
"I am active in the trade every day. This is different than before. In the past, the Committee has had some retired grain traders as chairman or people who are on the fringes of this sector. The fact that I am close to the trade is an advantage."

Is the current situation on the market unique?
"The situation is exceptional. Not only are grain prices extremely high, but also the price of rapeseed, for example. This is partly due to corona, a smaller harvest and high demand, but partly it is also speculative behavior. When you consider that the volume of soy beans is traded on the CBoT is three to four times world production, you can see that many speculators and investors are active. They see that there is money to be made. In addition, there is inventory behavior of countries and a shortage of means of transport. Ships, cars, containers Everything. You can afford it, but the delivery security is lacking. Availability is no longer what we are used to. The 'daily craziness' is difficult to deal with. Drivers are in quarantine much more often. You notice that. Fortunately, the recent quarantine measures have been relaxed."

Is that what you mainly do, talking to politicians?
"As an advocate for more than 120 companies, we hope to involve politicians more closely in the sector. There is (too) big a difference between policy and practice. With the new cabinet we are dealing with four ministries, which is quite difficult. Also In Brussels we try to influence policy. This is done through the umbrella European organization Coceral. We are also closely involved with BO Akkerbouw."

What other tasks does the Committee have?
"Our main goal is to achieve free, transparent trade. We firmly believe that only free world trade is a good and fair basis. We are committed to promoting the interests of agriculture and trade policy. This covers a wide range of topics. Think to food safety and legislation and regulations. There is an arbitration institute to resolve business disputes. Last but not least We organize an extensive Grain Trade course every year for newcomers to the sector. This is given by people from the field."

Do the members only consist of trading parties?
"I estimate that 80% of all grain traders in the Netherlands are members of the Committee. This also includes compound feed factories that buy and sell, logistics parties, banks and insurance companies. Basically everything that has to do with international trade."

Back to politics: is the policy in place (Farm2Fork, protein strategy) a curse or a blessing?
"We are very busy with this, but it is a long-term challenge that can have a huge impact on everyone in the chain. The European Union is one of the largest wheat producers and exporters in the world. The world wheat price is partly determined in Europe. The Farm2Fork strategy changes that radically. Consider 25% organic cultivation. If you look at current studies, you have to conclude that the European Union will soon become a net importer, instead of an exporter. This has an impact on the global market. This means that prices are rising and dependence on imports is growing. Very strange in light of food security."

If the import of soy is severely restricted, will that be a major loss for your members?
"Growing soy in Western Europe is difficult, but it works better in Eastern Europe. We have to look for alternatives: beans, peas, lupins. There is currently no margin. We stand for free world trade. That also means soy import from South America, because the growing conditions there are ideal. We understand that things need to change and the initiative has been taken. But, the current scenario is not realistic in our view. Especially with 25% organic, it means a higher price. consumers must be prepared to pay, or politicians must step in. We believe in a self-regulating market with supply and demand where everyone earns a fair living."

That is a nice bridge to the policy of countries in need of imports. Will their hoarding behavior continue to disrupt the grain market?
"Governments can only subsidize up to a certain level. Normally you see that the trade builds up a stock. In the current market, countries take over this because the (price) risks are too great. At these prices, the trade does not build up a stock. High prices are always short-term. Ultimately, the consumer must be able and willing to pay the price. The way down is steeper than the way up, is a frequently heard statement in the sector. If you look at the current market situation with logistical problems, inflation and the energy market is out of balance, then there are sufficient reasons for unrest in the world."

Unrest sounds like a recipe for high grain prices?
"Countries in Asia and Africa are taking larger positions and buying raw materials more easily. The demand is there, which keeps prices up. I don't have a crystal ball, but I don't see the wheat price falling in the short term. Then there are logistical problems, that will last at least until the summer. Bear in mind that ships that have to load and unload in Rotterdam are now on hold for two to three months. The costs are enormous. You cannot build extra ships, then the traffic jam will only get longer. Ports are quickly congested. locked down as a result of corona outbreaks. My current assessment is that we will not see a return to low price levels for transport."

Current wheat prices make growers interested. Should farmers pay more attention to market developments?
"Farmers who are active on the grain market know very well what to do. It is easy to gather information. The Committee also announces prices weekly via the Rotterdam stock exchange. Traders, importers, producers and brokers provide information for this purpose. The Published prices are based on completed transactions or the bids on the market at that time. It is a truly global market in which the Netherlands also plays an active role."