Maize Seaborne Trade exemplification essay

Topic: BusinessOrganization
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Last updated: December 2, 2020

Commodity supply heavily depends on weather conditions, rises and also regulatory mandates with regard s to ethanol production, but demand is affected by income, price and changes in population life standards and dietary habits. Both supply and demand of the commodity, are expected to rise in the future. By nature seasonal, and irregular in volume and route, necessitates a seasonal seaborne trade, accommodated through bilkers, mainly Handyman and Panamas vessels.Freight rates are fluctuating in accordance with bulk grain indexes, until recently at very low levels compared to the historical average, due to the oversupply in bulk carriers fleet. However recently rising freight rates provide a fair degree of optimism with regard to the increasing demand for bulk carriers.

All in all, maize trade will be steadily growing in the years to come, based mainly in increased demand from developing countries and new players in the supply side. 1. Introduction Maize is one of the oldest human-domesticated plants, providing the 3rd largest planted crop after wheat and rice.It is a crop that displays more than sufficient geographic adaptability, both in the north and southern hemisphere.

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Harvesting periods span from September to November in northern hemisphere and from April o May in Southern Hemisphere, thus reducing seasonality of the production worldwide. The majority of the crop is used as livestock feed; the remainder is processed into a range of food and industrial products including starch, ethanol for use as a fuel, oil, protein, alcohol and sweeteners such as high fructose maize syrup and maize oil.Due to all of the above food applications, maize has a pivotal role in diets worldwide. According to Abdomen A. (2006), on average, around 460 million tones, or 65 percent of total world maize production is used for animal feed purposes hill around 15 percent is used for food and the remaining mainly destined for various types of industrial uses. The diversity in usage of maize stems from its multiple nutritional characteristics. Tables 1 and 2 indicate the quantities of products that can be produced from one tone of maize, and the quantities of several kinds of meat tat can be produced by one tone of maims respectively.Table 1: What can One tone of Maize produce (Source: Iowa Corn) Table 2: How much meat can One tone of maize produce Depending on their color and taste, maize grown around the world is generally categorized into two broad groups: allow : Yellow maize constitutes the bulk of total world maize production and international trade.

It is grown mostly in northern hemisphere countries where it is traditionally used for animal feed. White: White maize, which requires more favorable climatic conditions for growing, is produced in only a few countries, the United States, Mexico and in southern Africa.White maize is generally considered a food crop and has usually higher market prices. As with other cereals, for commercial and marketing purposes, maize is also assigned different types of grades and classes depending on a set of physical heartsickness and qualities such as the minimum test-weight, feeding values and foreign material.

In the United States, for example, maize classes are determined on the basis of color and are graded from 1 to 5. 1. Parameters Affecting Commodity Trade The steep financial growth of Asian countries, like China and India, results in the formation of a dynamic middle class in those countries, that has increasingly rising standards of living and consequently changing eating patterns (with increased meat consumption and consequently 3 animal feed demand). Maize demand for food as well as animal feed is affected by income, standards of life, commodity prices, eating patterns related to daily calories intake, and the continuously rising earth’s population.A recent development which has critical implications in maize production and trade is the adoption of the Genetically Modified (MM) maize seeds, initially adopted in the US because of the increased yields they provided and the decreased pesticide costs.

According to Abdomens A. (2006), GM seeds were first introduced on a commercial scale in 1996 in the United States, followed by Canada, Argentina and other European or Asian countries. The GM maize yield has been growing significantly since then, to approximately 15 % of the world planted area of maize.Public opinion and political pressure to regulate the trade of GM Crops, are mandating industry to segregate GM from non GM crops, restrict the importation of certain GM crops and products, label foods containing specific amounts of GM ingredients and finally seek importing nation’s approval before shipment of GM products.

As a result of all these, the market has gradually started to work towards identity preservation (P) from producer to the final consumer.Last but not least, the use of maims for production of bio-ethanol, which is triggered by increasing environmental pressure regarding the replacement of fossil fuels. The US federal Renewable Fuel Standard mandates that gasoline sold in the U. S. Must be blended with an increasing percentage of ethanol every year.

This requirement does not consider the price of maize or the price of crude oil the ethanol is meant to replace. However, the use of increasing quantities of maize for ethanol production, causes the depletion of the quantities available for feed/food trade. . Supply and demand of commodity Supply of commodity is affected by the size of cultivated land and parameters like either conditions and plant diseases affecting directly the crops, agricultural policies, prices and the introduction of new players to the market such as black sea countries. Table 3 indicates the medium term supply and demand for maize, as well as international trade quantities and projections for up to 2018. This table indicates that there is a rising trend, both in supply and in demand.

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