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How to reliably implement the German Supply Chain Due Diligence Act

How to reliably implement the German Supply Chain Due Diligence Act

BVA e.V. and VdG e.V. inform agricultural traders in their seminar series “Good to know in agricultural trade”

Berlin/Hamburg, January 27, 2022. What are the risks in my supply chain? How do I set up a complaints management system? And how can I generally make my company legally compliant in terms of due diligence? These and other questions were the content of a three-hour online seminar on January 25 on the new supply chain due diligence law held by the Bundesverband Agrarhandel (BVA) e.V. and the Verein der Getreidehändler der Hamburger Börse (VdG) e.V.. As part of their online seminar series “Good to know in agricultural trade”, the two industry associations gave companies the opportunity to receive concrete action recommendations by experts and gain clarity.

“For many companies, there is often still uncertainty about the extent to which they are affected by the new law and what adjustments are necessary in their business,” explains BVA Managing Director Martin Courbier, who moderated the seminar. “With this seminar, we were able to provide concrete, practical support and help clarify pressing questions.” The associations had invited speakers who showed how implementation succeeds from a company perspective, as well as two experts from the “Helpdesk on Business & Human Rights“. As a free support service of the German government, the helpdesk advises companies of all sizes on the implementation of human rights due diligence processes. The speakers explained the requirements of the law and presented useful online tools: The CSR Risk Check helps assess the local human rights situation as well as environmental, social and governance issues in individual countries and for different commodities. The SME Compass supports the implementation of due diligence processes in companies. “The first step is to identify the risks in your own business area and in the supply chain and to counter them with appropriate preventive and remedial measures,” says Sabine Peters-Halfbrodt, a consultant at the Helpdesk on Business & Human Rights. “A change in perspective also helps to gain a comprehensive view of the situation: What impact do the company’s operations have on the people who may be affected by the company’s activities?” As a conclusion of the seminar, it became clear that although the implementation of the requirements is very individual, companies can receive a lot of help that will facilitate the process.

“For many companies, there is often still uncertainty about the extent to which they are affected by the new law and what adjustments are necessary in their business.”

Under the name “Good to know in agricultural trade”, BVA e.V. and VdG e.V. have been offering practical online seminars for members and non-members since the beginning of 2021. Upcoming topics include financial topics, such as credit protection and customer creditworthiness, or carbon farming. The associations provide information on the seminars on their websites.

Bundesverband Agrarhandel e. V.

The Bundesverband Agrarhandel e.V. (BVA) (Federal Association of Agricultural Trade) represents the interests of the agricultural trade in Germany. The BVA member companies qualitatively process the agricultural raw materials supplied by agriculture, such as grain and oilseeds, by drying and cleaning them and market these products as food and animal feed in Germany and abroad. They also sell seed, crop protection agents and fertilizers as well as animal feed to the agricultural sector. Agricultural trade thus plays a crucial role in the agricultural value chain.

Über den VdG e.V.:

The Verein der Getreidehändler der Hamburger Börse e.V. (VdG) (Grain Traders Association of the Hamburg Stock Exchange) is the federal association of international wholesale and foreign trade in cereals, oilseeds, feeds and pulses and has been the official voice of the industry at the world trading center of Hamburg for over 150 years. It acts as a service provider for its members and also as a partner for administration, politics and business in Berlin, Bonn and Brussels.

Press contact:

Verein der Getreidehändler der Hamburger Börse e.V.
Anika Nicolaudius
Public relations
Adolphsplatz 1
20457 Hamburg / Germany
Tel: +49 (0)40-369879-12
E-Mail: nicolaudius@vdg-ev.de

Picture: Miltiadis Fragkidis / Unsplash

Prices for agricultural commodities are rising – what’s behind?

Prices for agricultural commodities are rising – what’s behind?

World market prices for agricultural commodities are at their highest level in over 10 years (1). As of November 2021, the price index for agricultural commodities had increased by 27.3 percent since the same month last year. Cereals in particular have increased significantly – by 3.1 percent compared to October 2021. We already notice this when grocery shopping at the supermarket. Food prices recently rose by 4.8 percent – exceeding the general inflation rate of 4.5 percent.

But what is the cause of this seemingly unstoppable price trend that industry experts have been observing since last year?

Demand exceeds supply

The simple apparent reason is that globally, demand has exceeded supply over an extended period of time, since around 2017/2018. This has reduced stocks around the world that had previously served as a buffer, compensating fluctuations in supply and demand. This discrepancy is initially attributable to a combination of economic growth and lower production in individual regions: Weather-related poorer harvests, particularly in Brazil, Canada, Russia and the USA, led to lower availability of cereals and oilseeds on the markets. At the same time, the economies in the USA and China grew and with them the demand for raw materials. Demand also piled up globally during the first phase of the Corona pandemic, which unloaded through 2021. But other factors are paying into the current trend.

Biofuel quotas drive demand for vegetable oils

For example, the U.S. election in 2020 led to a shift in the country’s environmental policy: More biofuels were to be blended with fossil fuels. These biodiesel mandates briefly increased demand for vegetable oil significantly. Palm, soy, corn and canola, in particular, are used to produce biofuels. In the meantime, the government around Joe Biden has reduced the blending volume again, which could contribute to an easing of the market. This has also been helped by the fall in crude oil prices in the meantime. However, if crude oil prices continue to rise, as they have since the middle of the year, biofuels will become more interesting again and their availability could decline again.

Gas and input prices fuel production costs

Gas has also become steadily more expensive over the past few months, driving up the cost of producing agricultural commodities. However, it is not just agricultural and food production itself that has been affected by the rise in energy prices, but also the production of inputs. Fertilizer production in particular requires a lot of gas as a raw material and energy supplier: In the production of ammonia and nitrogen fertilizers, gas accounts for up to 80 percent of production costs. Current production shortfalls could even impact the 2022 harvest. In addition, major fertilizer exporters, such as Russia and China, have now begun regulating nitrogen fertilizer exports through quotas. This further curbs availability.

In the short term, only higher global production would help against the demand overhang. However, this will be affected by unpredictable factors, such as weather, and limited by external variables, such as energy and input availability. As a result, consumers will still face rising food prices in the coming months.

Photo: Robert Wiedemann / Unsplash

1: FAO = Food and Agriculture Organization of the United Nations

At the start of the EU Council Presidency: Security of supply requires multilateral trade

At the start of the EU Council Presidency: Security of supply requires multilateral trade

Hamburg, 1 July 2020. The start of the German EU Council Presidency today marks the beginning of a phase of opportunities for shaping the EU – with a focus on securing the food supply. The Grain Traders Association of the Hamburg Stock Exchange (VdG e.V.) appeals to the representatives of agricultural and trade policy not to focus one-sidedly on regional food production, but to continue to promote international trade in agricultural commodities.
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