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Rethinking the F&A Supply Chain report by Rabobank

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Rabobank presents their report titled ‘Rethinking the F&A Supply Chain: Impact of Agricultural Price Volatility on Sourcing Strategies’ at the Duzienberg lecture in Washington, USA.

According to the report, Rabobank believes the world is facing a period of significant agri-commodity scarcity, which would set to last for at least this decade. The global food system’s battle for agr-commodities will intensify as the situation marks the start of a profound transition in the global F&A sector.

Global agri-commodity prices are expected to rise and become more volatile, especially with a possible double dip recession or the rolling back of biofuels legislation affecting its outlook. F&A leaders, farmers and governments are looking into minimising the risks involved by securing their current future agri-commodity supplies, while tacking with higher price-risk levels.

In the report, it is predicted in the next 40 to 50 years the F&A sector will need to double their agri-commodity supply with only about half of the current land, water and mineral resources, which would be a significant challenge for F&A leaders and farmers.

Rabobank believes these occurrences will create some significant dynamic changes in the F&A sector. Rabobank predicts that global food companies with market power will strengthen their influences in the supply chain industry, which would cause considerable pressure for smaller and midstream processors and traders.

Farmers without market power and strong balance sheets will be most vulnerable in these changes and would find themselves in significantly pressured situations. However, F&A companies
are becoming increasingly aware of these pressures and are working towards providing farmers with the right support.

The Rabobank report recommends F&A companies to consider looking beyond their own chains and outside alternatives, such as farm technology, chemicals, paper and pulp in order to lower the resource footprint and help establish a sustainable food supply.

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