markets more volatile than ever

markets more volatile than ever
markets more volatile than ever

The 38th Cyclops Report on Global Markets, released during the week of May 13, 2024, has the subtitle “Wait and Hope”. There we find in particular the assessment of all the current geopolitical impasses: Ukraine, Israel and Hamas, the rise of populism… and increasingly marked breaks with “relatively sluggish global growth” but also markets more volatile than ever.

“The situation is perhaps more difficult to read today,” admits Philippe Chalmin, professor emeritus at Paris-Dauphine and co-director of the Cyclope report with Yves Jégourel, professor of raw materials economics at the Conservatoire national. arts and crafts.

Important geopolitical dimension

“There are no complete guidelines as we have so many questions. Rarely among the latest Cyclops reports published, the geopolitical dimension has been so important. It is at the heart of all markets. The world is looking for a new order that is both geopolitical and international economic,” indicated Philippe Chalmain, Tuesday May 14, 2024 at the press conference presenting this new edition.

“For three years now, we have been experiencing a profound rupture, one which was marked symbolically by Covid, then by the war in Ukraine and more generally by this fragmentation of the world that we see today,” he said. he thus supported. And added: “We are in a period of shock that will mark history. The 2020s are a time of disruption. And China has considerable weight on the markets. »

Prices are soaring again

“The year was marked by more than a decline: a collapse! , said among other things François Luguenot, agricultural raw materials market analyst at FL Consultant. These markets have completely abandoned. Indeed, with the outbreak of the war in Ukraine, things got out of control and there was an “apocalypse”, reaching world record levels. But the summer that followed, the classes started to ebb and flow and it didn’t stop. »

“It is as if from now on the situations of very strong tensions – such as the war in Ukraine, the risks in Taiwan, the straits which pose a problem (Panama or Bab-el-Mandeb), etc. — it no longer mattered. Prices began to fall as supply was abundant, particularly in the Black Sea,” adds the specialist.

“Prices have been soaring again for barely 15 days under the influence of fundamentals,” notes the analyst. The cause: weather phenomena in the Northern Hemisphere, drought and frost episodes in Russia, declining surface areas due to rainfall in the fall and crops that are not really in good condition. Thus, the northern hemisphere will probably produce less straw cereals and the South, more. The latest USDA report says that we will produce more wheat but will continue to consume more so stocks will erode. Prices are thus rising to prices not seen for a year or more. »

He adds: “on soya, it’s a little different because production could be abundant. But there is still a downside in the Rio Grande do Sul region with very heavy rainfall, which could seriously damage things. »

New chapter on biofuels

In addition, a new chapter on biofuels written by Jean-Benoit Deloron (Consulting Manager at S&P Global Agribusiness Biocarburants Consulting) completed this latest edition of the Cyclops report. “The biodiesel market is not new but those for biofuels based on lipids or vegetable oils are completely reinventing themselves through two products,” states the latter.

“The first, renewable diesel, is developing especially in Europe, the United States and Canada thanks to regulations which put in place incorporation mandates and which develop subsidy systems so that this fuel is consumed and produced in those countries. The second growing market is sustainable aviation fuel, with almost all developed countries entering these markets,” he says.

“What is interesting with these markets is that they also promote products such as waste and residues whereas for a long period, vegetable oils were the main material for biofuels,” highlights Jean- Benoit Deloron. This expanding global trade values ​​low carbon emissions. But also, it fights the famous debate between “food versus fuel oil” with today new policies which allow us to get out of it by promoting waste and residues. »

The specialist specifies that there is an explosion in the global trade in used cooking oils with less than 1 million tonnes 3 years ago and today almost 3 to 4 million tonnes. The same goes for animal fats with Brazil and New Zealand which export a lot of them. »

Céline Fricotté

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