Drones, satellites put ag markets ‘on brink of’ data revolution

Agriculture markets are, thanks to innovations such as drones, “on the brink” of an information revolution which could help fill the information gap notable in regions such as the Black Sea, and markets such as coffee.

Olivier Raevel, head of commodities at exchange operator Euronext, told the AgriRisk Forum that developments in satellite technology were already transforming the availability of data for energy investors.

Such information can, for example, give an indication of oil inventories allowing investors buying it to position ahead of benchmark monthly reports from the International Energy Agency.

“I believe we are only a few years away from getting this type of data across the world for ags as well,” Mr Raevel told the forum, in London.

“We are on the brink of acquiring data from news new means, new technology.”

From drones to ‘back to basics’

In agriculture, one promising development was the growth of aerial drones as a means of obtaining close-to-earth information on crops, said Eddie Topfik, head of foreign exchange at ADM Investor Services, part of the empire of ag trading giant Archer Daniels Midland.

“Drones are being used increasingly” as a means of assessing crops, he said, noting too the role of more advanced satellite technologies in getting more localised information than had been possible in the past.

This at a time indeed when there is growing appetite for such detailed data, Mr Raevel said, flagging this trend was also spurring growing demand for old-style assessment techniques, such as crop tours.

“We are going back to basic,” he said.

“People are going to various places where there is not always good information on,” such as the Black Sea for oilseeds and grains.

‘Real problem’

In soft commodity markets, results so far from coffee plantations of drone surveys was that they were “not perfect enough in getting detailed information on crops”, said Tom Copple, economist at the International Coffee Organization.

However, drones are “getting there”, he added, flagging the potential for them ultimately to go some way to filling a void in information particularly evident in the coffee, where assessments on world production for instance could vary by as much as 8%.

Coffee markets “have had a real problem” with the gap in information, which the ICO itself was working to address through measures such as encouraging debate “at least with historical data to get to a consensus on some baseline people can use as the basis for their analysis”.

As for more up-to-data information, the value of accurate data was such that “people do not want to disclose” what they have.

Agrimoney

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