CLITRAVI 50th Annual General Assembly, Portoroz, Slovenia, 8 May 2008 Lars Hoelgaard, Deputy...
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Transcript of CLITRAVI 50th Annual General Assembly, Portoroz, Slovenia, 8 May 2008 Lars Hoelgaard, Deputy...
CLITRAVI 50th Annual General Assembly,Portoroz, Slovenia, 8 May 2008
Lars Hoelgaard, Deputy Director-General
EU Agriculture in a globalised context
Portoroz, Slovenia, 8 May 2008 2
Before Now Ahead?
Portoroz, Slovenia, 8 May 2008 3
Before – ”Good old days” Stable framework Intervention prices Tariffs Export refunds Intervention stocks Surplus – minimum/maximum prices Monetary compensatory amounts – green
rates/accession compensatory amounts
Portoroz, Slovenia, 8 May 2008 4
Disappearance of public stocksComposition of public stocks in the EU (mio t), 1995-2014
0
2
4
6
8
10
12
14
16
18
20
22
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
wheat barley rye maize
EU-15 EU-25 EU-27
Butter, SMP, beef – same picture
Portoroz, Slovenia, 8 May 2008 5
Now – ”volatility” - EU-related
CAP-reform – market orientation Real ”Filet de sécurité” Direct payments – income security – but
price volatility Exchange rate US-dollar/Euro
Portoroz, Slovenia, 8 May 2008 6
Volatility - global Energy crisis – 120$/barrel Global warming Bio energy - EU:
– Renewables – 20% - 2020– Bio fuels – 10% - 2020
Others Demand for raw materials Food/feed/energy/industrial Renewables - environment
Portoroz, Slovenia, 8 May 2008 7
Slightly expanding cereal markets and emerging bioethanol markets….
Development of cereal markets in the EU, 1995-2014 (mio t)
0
50
100
150
200
250
300
350
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Production
Non-feed use
Feed use ExportsImports
EU-15 EU-25 EU-27
Bioethanol
Portoroz, Slovenia, 8 May 2008 8
Food crisis? – or price adjustment to real cost of production
Energy cost of production Environment – water cost of production Global warming – renewables CO² - cost
of production
Portoroz, Slovenia, 8 May 2008 9
Demand driven Bio ethanol – maize – US – Iraq - war Odd man out – sugarcane and bio ethanol –
Brazil Emerging economies ”Chinda” (China/India)
etc. - Diet patterns Population growth – 9 billion in 2050 Hedge funds – Soros – add to speculation –
gold/oil
Portoroz, Slovenia, 8 May 2008 10
Opportunities/supply
Africa potential – high prices good or bad? GMO’s – productivity and environment US-dollar – reserve currency – imbalances Deficit in federal budget (Iraq war) Deficit in trade balance (China) Low interest rates house prices inflated
consumption subprime
Portoroz, Slovenia, 8 May 2008 11
WTO Lower tariffs No refunds 2013
Market outlook
Portoroz, Slovenia, 8 May 2008 12
EU to remain net importer of beefEU production, consumption, trade and intervention stocks (mio t c.w.e.)
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013
Pro
du
cti
on
, C
on
su
mp
tio
n
0.0
0.5
1.0
1.5
2.0
2.5
Tra
de
, S
tock
sProduction
Exports ImportsEnding stocks
EU-15 EU-25EU-12
Consumption
EU-27
Portoroz, Slovenia, 8 May 2008 13
Growth rates for pig meat production and consumption are expected to be lower than in the 90sEU production, consumption and trade (mio t c.w.e.)
0.0
5.0
10.0
15.0
20.0
25.0
30.0
1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013
Pro
du
cti
on
, C
on
su
mp
tio
n
0.0
1.0
2.0
3.0
4.0
5.0
6.0
Tra
de
Production
Consumption
Exports
Imports
EU-15 EU-25EU-12 EU-27
Portoroz, Slovenia, 8 May 2008 14
Meat Beef production to continue falling below consumption throughout
the projection period due to:– Declining cattle herd from dairy sector– Impact of decoupling of direct payments
Pig meat production expected to keep its slight growth thanks to:– Solid demand both in the EU-15 and in the EU-12– Exports to decline slightly due to greater competition from low cost
exporters, imports to remain at low level
Poultry meat demand to grow faster than production, leading to EU becoming net importer of poultry meat
EU sheep/goat meat production to continue its declining trend
Portoroz, Slovenia, 8 May 2008 1515
Imports from developing countries (2005)Imports from developing countries (2005)
(billion US dollars / % of total)
68,6%
20,0%
45,7%
33,8%30,4%
24,9%
37,7%
0
10
20
30
40
50
60
70
EU25 Canada US Japan Australia New Zealand Sum on 5
Commodities Intermediate products Final Products Share of total (%)
Portoroz, Slovenia, 8 May 2008 16
Health check (HC) – how does this fit? Further decoupling Modulation Balance Pillar I and Pillar II More market orientation Article ”68” (old 69) LFA’s ”New challenges”
Portoroz, Slovenia, 8 May 2008 1717
CAP expenditure and CAP reform path CAP expenditure and CAP reform path
0
10
20
30
40
50
60
70
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
billion €
0,0%
0,1%
0,2%
0,3%
0,4%
0,5%
0,6%
0,7%
Export subsidies Market support Direct aidsDecoupled payments Rural development % of EU GDP
EU-10 EU-12 EU-15 EU-25
Portoroz, Slovenia, 8 May 2008 18
Challenges
Demand is there Can Europe keep pace? RD + innovation Reinvent yourselves – value added Competition – more, not less
Portoroz, Slovenia, 8 May 2008 19
Conclusion - ahead More volatility More market Risk management Instruments – hedging – futures Locking in prices But public intervention still necessary –
market does not solve all Future CAP post 2013?