MERCHANDISER
DR. PER STORMhasbecomeManaging inthefoundingandontheboardofseveral
DirectorofRawMaterialsGroup(RMG),one smallcompanies.
ofEurope’sleadingindependentgroupsof RMGhasalsostrengtheneditsboardof
mineraleconomistsandmineral directorswithtwohighlyexperiencedmembers
strategy/policyanalysts. withoutstandingminingindustrycareers:
RMGspecialisesinglobalanalysisofthe •TomNiemi,formerDeputyChiefExecutiveof
miningindustrystartingwiththeproprietary Boliden;presentChairman,FinnishGeological
ownershipandproductiondatabaseRaw Survey,hasjoinedaschairmanoftheboard.
MaterialsDatawhichcoversboththeglobal •Karl-AxelWaplan,ExecutiveVicePresident,
EuropeanOperationsNorthlandResources;
RMG New Hires
ChairmanofEndomines;formerCEOof
LundinMining.
MagnusEricsson,RMG’smainshareholderand
metalsandcoalindustriesingreatdetail. co-founder,willcontinueasSeniorPartnerwithresponsibility
BeforejoiningRMG,StormwasSecretarytotheRoyal forthedevelopmentofRMG’sconsultancybusiness.
SwedishAcademyofEngineeringSciencesfrom2001. “Iwelcomethesehighlyqualifiedmemberstoourboard.
PreviouslyheworkedasaseniorconsultantatAU-System,a WiththeirskillsandexperiencesRMGisreadytotakeitsnext
SwedishITandbusinessconsultancy. stepstowardsdevelopingaspecialisedglobalconsultancyfor
DrPerStormspentseveralyearsasactingassistant theminingandrelatedindustries”,saysEricsson.
professorinindustrialeconomicsandmanagementatthe
RoyalInstituteofTechnologyStockholmandhasbeenactive
www.rmg.se
THE SEARCH FOR alternative fuels is to some major global suppliers, such Moving forward, any changes in fac-
oftenblamedforthehighcostoffood as droughts in Australia. torssupportinghigherinputcostsand
according to Rabobank, a premier On the fuel side, many are seeking higher prices – such as changes in
bank for the global food and agricul- long-term sustainable ways to demand, exchange rates, or ethanol
ture industry. reduce reliance on foreign oils. policies – could change the agricultur-
But it’s just one of many factors say Additionally, the long-term availabil- al industry. Additionally, the food ver-
analysts with the Rabobank Food & ityofotherfuelsources,suchascoal, sus fuel debate will play a key role in
Agribusiness Research and Advisory may also need close consideration. theupcomingUSPresidentialelection,
(FAR) department in a recent discus- “The pace is heating up on finding with the policies of both candidates
sion of the food versus fuel debate. sustainable alternatives to these on areas such as biofuels, trade and
“First, food versus fuel is a handy energies and biofuels really are at energy being closely watched not just
sound-bite,”saysFARExecutiveDirector the forefront of the debate,” accord- by the agricultural industry but by
KarolAure-Flynn,“But,thefallacyofthe ing to Whitehead. food buying consumers.
“The future in this debate, with the
US Food vs. Fuel Debate
new administration coming in, will be
like a ride on a bi-plane – it will be
bumpy, but fascinating as well,” says
headlineisthatthereisadirectcompe- ThecombinedfactorshaveraisedUS Whitehead.
tition between the two; that it’s food prices by nearly 6% and could Rabobank predicts strong growth in
either/or.Therealityisthatstrongglob- see them go higher into 2009. This the worldwide food and agriculture
al economic growth has changed the hasledmanytobelievethatpricesare industry. Demand for the ‘Four Fs’
demandequationforcommodities.” increasing faster than they should, (food, feed, fibre and fuel) is set to
The depreciation of the US dollar, given the record prices that farmers continue to increase worldwide. The
soaring energy costs and changing are receiving for their commodities. combined effects of this increased
trade policies are also contributing to However, many consumers are demand are placing pressure on agri-
thecostofcommodities,whichinturn unaware that around 19% of the culture to operate more efficiently
is raising the cost of food. The mes- retail price goes to the farmer; the and this, in turn, is leading to a higher
sage: It’s a combination of all of other 81% goes toward food process- level of investment in the industry.
these factors. ing, transportation and service. Thisdevelopmentisenhancedbythe
“We’re seeing ourselves at a unique “Farmers’ profitability doesn’t fact that transportation networks
point in history where a lot of these change retail prices. And farmers’ around the world are being improved
factorshavecollidedatthesametime profitability isn’t guaranteed by high and countries with extensive natural
tocreatethisfoodversusfueldebate,” grainprices.Thesamefactorsthatare resources that were previously inac-
says FAR Vice President Michael lifting grain prices are lifting produc- cessible are now accessible. This will
Whitehead. tion costs,” says Aure-Flynn. further boost investment in agricul-
These factors have included the “So, yes, the farm price index is at ture and increase the value of inputs,
upward impact on food demand of 162% of what it was 1990-1992 [Aug particularly in South America, Eastern
growing population and rising 18
th
], but at the same time, the price Europe and Southeast Asia.
incomes, an increasing emphasis on index measuring what farmers pay –
The podcast is available online at:
food security, an uncertain global forservices,farmwagesetc.–is189%
trading environment, and disruptions of base.”
www.RabobankAmerica.com/Rabocast
22 SEPTEMBER2008 COMMODITIES NOW
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