2013-01-08 16:48:17 - New Food market report from Business Monitor International: "Brazil Agribusiness Report Q1 2013"

BMI View: We expect strong grain and soybean crops in 2012/13 to contribute towards a loosening of global markets in the medium term after grain prices reached record highs in recent months on a subdued US crop. For sugar, the pace of the harvest has continued to accelerate in recent months, and Brazilian exports have provided some relief to global prices. The country's strong coffee crop is expected to drive increases in the global market and keep prices subdued. The livestock and dairy sectors are performing strongly, and the country has not been affected by margins restrictions to the same extent as other producers, mainly thanks to sufficient domestic grain stocks.


Full Report Details at
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Key Forecasts

¦ Sugar production

growth to 2016/17: 16.8% to 43.1mn tonnes. Because replanting has been slower than initially expected, we project average growth over our forecast period. There are upside risks to our view. * Coffee consumption growth to 2016/17: 11.5% to 22.3mn bags. Coffee consumers in emerging markets that do not have a strong coffee culture are often very price-sensitive, which will drive demand for the cheaper robusta given its lower production costs. * Pork production growth to 2016/17: 24.6% to 4.1mn tonnes. This will come as input costs continue to fall and as export demand rises. As in the rest of the domestic livestock complex, pork production will considerably outstrip consumption and will thus heavily rely on exports in order to continue growth over the medium term. * 2013 real GDP growth: 3.7% (forecast to average 3.6% over 2012-2017). * 2013 consumer price inflation: 5.5% average. * BMI universe agribusiness market value: 2.4% year-on-year (y-o-y) increase to US$172.5bn in 2013, forecast to increase by an average of 2.3% annually between 2011/12 and 2016/17.

Industry Outlook

Despite favourable government policy and competitive production costs, Brazil is expected to only partially compensate for the weak global production outlook among major pork producers in 2012/13. Some observers have projected a spike in pork prices in the coming months amid fears of a global shortage, largely owing to poor production outlooks in the EU, Canada and the US, which combined account for roughly 80% of all pork exports. Although data suggest that pigs are being rushed to market in the wake of high grain prices, we are cautious about predicting a significant shortage in pork production over the medium term.

We maintain our forecast for Brazil's sugar production to grow 5.1% to 38.8mn tonnes in the 2012/13 season that started in April 2012. The pace of sugar cane crushing remains behind previous years' rates due to maintenance-related stoppages at mills in September, but it is catching up with 2011/12's levels. Mills in the South-Central region crushed 381.4mn tonnes of sugar cane from April to the end of September, down 7.8% y-o-y. Looking at the 2013/14 season, which begins in April 2013, we expect sugar production to rise further to 39.7mn tonnes, up 2.4% y-o-y, as favourable weather is currently helping plantings. Production will also be supported by reinvestment in the sector leading to replanting of ageing and low-yielding crops.

We maintain our bullish outlook on dairy production in Brazil, as the country is making efforts to improve quality, efficiency and investment in the sector. We forecast milk production to grow 3.0% y-o-y to 32.4mn tonnes in 2013. Over our forecast period, we expect production to continue to see steady growth and reach 40.8mn tonnes in 2016/17. This will come as a result of government efforts to improve the health of cattle herds through vaccination, increase water management efficiency, and mobilise financial resources for the sector.

Partial Table of Contents:

BMI Industry View
- BMI Industry View
SWOT
- SWOT - Brazil - Q113
Industry Forecast
- Brazil Livestock Outlook
- Table: Brazil Poultry Production & Consumption, 2012-2017
- Table: Brazil Pork Production & Consumption, 2012-2017
- Table: Brazil Beef & Veal Production & Consumption, 2012-2017
- Table: Brazil Poultry Production & Consumption, 2007-2012
- Table: Brazil Pork Production & Consumption, 2007-2012
- Table: Brazil Beef & Veal Production & Consumption, 2007-2012
- Brazil Cocoa Outlook
- Table: Brazil Cocoa Production & Consumption, 2012-2017
- Table: Brazil Cocoa Production & Consumption, 2007-2012
- Brazil Grains Outlook
- Table: Brazil Wheat Production & Consumption, 2012-2017
- Table: Brazil Corn Production & Consumption, 2012-2017
- Table: Brazil Barley Production & Consumption, 2012-2017
- Table: Brazil Wheat Production & Consumption, 2007-2012
- Table: Brazil Corn Production & Consumption, 2007-2012
- Table: Brazil Barley Production & Consumption, 2007-2012
- Brazil Sugar Outlook
- Table: Brazil Sugar Production & Consumption, 2012-2017
- Table: Brazil Sugar Production & Consumption, 2007-2012
- Brazil Coffee Outlook
- Table: Brazil Coffee Production & Consumption, 2012-2017
- Table: Brazil Coffee Production & Consumption, 2007-2012
- Brazil Soybean Outlook
- Table: Brazil Soybean Production & Consumption, 2012-2017
- Table: Brazil Soybean Production & Consumption, 2007-2012
- Brazil Cotton Outlook
- Table: Brazil Cotton Production & Consumption, 2012-2017
- Table: Brazil Cotton Production & Consumption, 2007-2012
- Brazil Dairy Outlook
- Table: Brazil Milk Production & Consumption, 2012-2017
- Table: Brazil Cheese Production & Consumption, 2012-2017
- Table: Brazil Butter Production & Consumption, 2012-2017
- Table: Brazil Milk Production & Consumption, 2007-2012
- Table: Brazil Cheese Production & Consumption, 2007-2012
- Table: Brazil Butter Production & Consumption, 2007-2012
Commodities Price Analysis
- Monthly Grains Update
- Soybean: Struggles To Continue
- Corn: Still In Surplus
- Wheat: Not Toast Yet
- Rice: Range Bound
- Table: Select Commodities Performance & Forecasts
- Monthly Softs Update
- Cocoa: Short-Term Tightness
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Full Table of Contents is available at:
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