Food security and environmental concerns are driving change in the Asian agribusiness sector, with agricultural giants such as China and India modernising their production complexes by rationalising support policies and addressing excessive use of inputs. Australia and China will lead in the race to integrate IoT technology in their agribusiness sectors, while frontier markets in the Mekong struggle to improve traceability and quality control systems. Meanwhile, consumer preferences will be affected by dietary shifts and the region will see considerable uncertainty owing to China’s ongoing trade dispute with the US.

Rice production will see modest but slowly strengthening growth over the coming years, mainly driven by improved varieties and increased access to inputs. Nevertheless, energy shortages and poor yields - mainly a result of the patchy availability of new varieties of rice seeds - will curtail more impressive increases in production. Across our five-year forecast period to 2022 we continue to see growth in rice production outpacing growth in rice consumption, consolidating the reversal in the hierarchy which took place in our Q218 update. Moreover, we believe the country will remain an important exporter of rice over the medium term.

The 2018/2019 season, which began harvesting in June, will see wheat production weaken from the record output of the 2017/2018 season. Nonetheless, we still forecast the third highest wheat production on record. In the long term Russia will continue growing its share of the global wheat export market.

Grain production in Saudi Arabia stands on the threshold of disappearance, as the government aims to phase out wheat production. The national policy is aimed towards conserving water in the country and will result in virtually full reliance on grain imports to feed the growing levels of national demand. We expect steady growth in grains consumption out to 2022 with Saudi Arabia remaining a large importer of grains over the medium to long term.

GM seed usage in Africa has strong potential, but the uptake will be inconsistent. We expect limited changes from new poultry import regulations in Saudi Arabia, whilst the cocoa giants, Côte d'Ivoire and Ghana, will struggle to maintain their share of an increasingly competitive market. Increasingly challenging environmental conditions will further heighten risks to political stability in Sub-Saharan Africa over the coming years, while a significant increase in smuggling in West Africa compels us to see downside risks to Ghanaian cocoa production over the coming years.