Barcelona Cereal Market: The twelve chosen ones that set the price of the loaf of bread | Economy

Cereal prices in Spain are marked by the price sheet published every Tuesday by the Lonja de Cereales de Barcelona. This document is the basis for all grain transactions carried out in Spain. The Lonja de Cereales —made up of four hundred members of the sector— entrusts 12 representatives (mostly men) with the mission of setting a price for wheat, corn, soybeans, sunflowers, legumes, nuts… These dozen chosen ones are part of the price commission and are appointed by merchants, industrialists and brokers that take the pulse of the price of these raw materials. What these people decide depends on the price not only of the loaf of bread, but of absolutely all food, since feed is the fundamental raw material for fattening cattle.

Every Tuesday —”since time immemorial”, according to the institution’s own website— the members of the Cereal Exchange meet in the Llotja de Mar Consuls’ Hall between 12:00 and 5:00 p.m. After the session, it is the turn of the price commission, where the 12 elected determine the average of the quotes produced and the price sheet is designed. This Tuesday they met again behind closed doors, but EL PAÍS contacted several of the members of the fish market. The price trend continues to be upward. They do not remember a similar upward swing in the price of raw materials since the 2008 crisis and some warn that prices have not yet peaked and will continue to rise in 2022.

“Times are turbulent. A year and a half ago there was a drought in Canada and frosts in Brazil that caused the first increase in the price of cereals. Then it was the turn of the energy crisis, which caused a second increase in prices, and the war in Ukraine, which created the final increase”, contextualizes José Luis Esteban, president of the Barcelona Cereals Market. Esteban knows the sector and assures that this concatenation of crises has become “the perfect storm”. “In Spain, 36 million tons of feed are consumed per year and our agricultural productions are 16, 17 or 18 million tons. We are missing 20 million tons, which are what we import. Of Ukrainian corn we imported between five and seven million; this year we have only imported two”, he acknowledges.

The consequence is easy: prices have skyrocketed. “In 2017 the prices of corn and wheat were around 170 and 180 euros per ton. In just four months it has gone from costing 240 euros per ton of corn to 380 euros per ton. Wheat has gone from 300 to 440 euros and soybeans have been at levels of around 500 euros per ton in the last six months. We are no longer talking about protein materials such as rapeseed or sunflower, which have skyrocketed. To all this we must add that the Spanish harvest we believe will be worse than expected”, maintains the president of the fish market. In 2008 the price of cereals also rose, but the current situation is very different. “Russia and Ukraine account for 40% of the entire world wheat farm. This has forced the opening of new markets. Brussels has opened up to allow genetically modified organisms (GMOs) which has allowed us to import modified cereals from the United States and Brazil. With this, it has been possible not to create any shortages”, he is proud. The problem now will be the amount. “I think the maximum price has not been reached. Manufacturing had a supply gap that has allowed it to maintain prices until June or July. That is to say, there were raw materials purchased previously that have respected the prices and have not been passed on, but now there will be no other choice but to raise it”, he warns. Esteban believes that during 2022 an upward trend will continue.

The president of the price table of the Lonja de Cereales, Josep Maria Torremorell, assures that one of the greatest dangers that have made products more expensive was the word “shortage” repeated on many occasions at the time of the Russian invasion of Ukraine. “Prices have risen so much that consumption has decreased and has even made it unprofitable to produce pigs,” he acknowledges.

Torremorell does not believe that prices will rise much more. “It is that they are so high that they are destroying demand. I believe that alternatives will be sought. At the moment, the regulations for importing genetically modified cereal have already been modified. In Argentina, flexibility could be allowed with fungicides. There is still room to go”, she assures. Torremorell warns that there are countries that may have benefited from the Ukrainian war: “Surplus countries such as the United States, Brazil or France no longer have Russia or Ukraine as competitors. Even so, farmers have not benefited at all because raw materials and energy have risen.”

He knows in depth all the sides of the coin.

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The Barcelona fish market is the first in Spain and the second in Europe in terms of the volume of transactions. “Spain is the European Union country most dependent on grain imports. Our price sheet sets a chair throughout Spain and transactions are carried out based on those prices”, Esteban is proud. The president of the Lonja warns, yes, that the amounts that mark these dozen chosen ones are conditioned by everything that happens “in terms of local and imported prices in the world of cereal during that week.”

The Lonja de Cereales has its origins in the 14th century when the Casa Llotja de Mar was built in Barcelona, ​​where cereals were deposited and marketed. It is now under the guardianship of the Department of Business and Employment of the Government of Catalonia and is located within the headquarters of the Official Chamber of Commerce, Industry and Navigation of Barcelona.