Tuesday, July 28, 2020

Bulk Shipping: FAO Projections For Grains, Slow Growth But Growth Nonetheless

Trying for a bit of Schiller in the headline:
"Spät kommt ihr doch ihr kommt!"
 (You come late, yet you come!) 
Not. Even. Close.

From Hellenic Shipping News, July 29: 

Extra support for grain and soya trade optimists
In the past few months covid-nineteen has cast a dark shadow over dry bulk commodities. Previous trade forecasts were rendered null and void, replaced by new forecasts of dubious plausibility. The path of the pandemic and its consequences for commodities is not yet clear. But grain and soya predictions are, perhaps, more convincing than those for other trades.

Availability of cereals, and to a great extent also oilseeds, usually attains priority status as an essential product. This contribution to food supplies is widely regarded as a basic necessity for sustaining human life and preserving civilisation, including minimising political disturbances arising from food shortages. Research just published reinforces expectations of longer-term growth in global grain and soya trade.
. .
A refreshed outlook
World trade in wheat, corn and other coarse grains, and soyabeans could expand by about one-sixth during the period up to the end of the current decade. This positive outlook is based on a new set of projections, published in July 2020 by the Organisation for Economic Cooperation and Development (OECD) jointly with the United Nations Food and Agriculture Organization (FAO), entitled ‘OECD-FAO Agricultural Outlook 2020-2029’. The trade trends envisaged are shown in the graph.
Trends indicated in the report are described as projections, not forecasts, because the figures are based on specific assumptions about the most significant influences. One major influence highlighted is the “unique circumstances” created by the coronavirus pandemic. Owing to difficulty in assessing the impact of this unusual event, the full effects could not be incorporated. The authors suggest that there is more uncertainty about the next few years than about later years.

Figures for global trade shown in the graph (these volumes are mainly seaborne trade, but include some land movements) indicate that the annual wheat, coarse grains and soyabeans volume could total 541 million tonnes in 2020. Nine years later, in 2029, annual trade may reach 628mt, growth of 87mt or 16 percent over the period. Looking at the main components individually, wheat trade is projected to increase by 28mt (15 percent) to reach 213mt in 2029. Coarse grains trade could increase by 36mt (17 percent) to 243mt, while soyabeans trade rises by 23mt (16 percent) to 173mt.

Short-term: hazy, long term: bright
Assessing short-term prospects has become problematic, reflecting the extraordinarily wide range of possible ramifications arising from the covid pandemic. However, assuming that a global economic recovery unfolds over the decade ahead, the OECD and FAO analysts argue that upwards trends in grain and soya trade volumes can be foreseen, based on influences including population growth, strengthening economic activity, and the results of other drivers such as urbanisation, agricultural policies, prices, and consumer preferences....

The U.N. agencies like the Food and Agriculture Organization above or the Intergovernmental Panel on Climate Change are really reluctant to call what they do forecasts, in part because forecasts can be falsified (proven incorrect) and then where would we be?
The IPCC goes with "scenarios", the FAO "projections".

There seems to be a concerted effort to get around Karl Popper and  falsifiability; to make science whatever you say it is, an effort I resist by standing athwart history and yelling "Where are we going and why are we in this handbasket."