2013-09-13 09:30:04 - New Food market report from Business Monitor International: "Italy Agribusiness Report Q4 2013"
BMI View: Our outlook for the Italian agribusiness sector has turned more bearish, as dry conditions in Europe, high operating costs and bleak economic prospects have taken a toll on the grains, dairy and livestock sectors. Our long-held view has favoured the grains segment over rice, and we expect conditions to be particularly favourable for wheat and corn over the forecast period to 2017. We also expect poultry and cheese to outperform, mainly bolstered by the expected economic recovery, changes in consumption habits and opportunities for expansion into export markets.
Full Report Details at
- www.fastmr.com/prod/671016_italy_agribusiness_report_q4_2013.asp ..
* Wheat production growth to 2016/17: 22.1% to 7.5mn tonnes. Production is expected to rise as prices stay elevated, driven by growing demand
for food and biofuels. Production of cellulosic ethanol, of which Italy is soon set to become a world leader, also will very likely help to boost wheat production.
* Cheese consumption growth to 2017: 20.6% to 1.8mn tonnes. Per capita cheese consumption, at 28.1kg, is on a par with France and Germany and higher than northern European countries such as Sweden and the UK.
* Poultry production growth to 2016/17: 10.4% to 1.4mn tonnes. Poultry is a relatively cheap meat; as such, we expect continued strong demand amid the tough economic climate.
* 2013 real GDP growth: -1.5% year-on-year (y-o-y), compared with the -2.4% estimated for 2012.
* 2013 consumer price index: 1.5% average, down from 3.3% estimated for 2012.
* BMI universe agribusiness market value: 0.9% y-o-y decline to US$16.9bn in 2012/13, forecast to grow on average 0.4% annually between 2012/13 and 2016/17.
* revised down from 9.4mn tonnes to 8.2mn tonnes owing to the effects of adverse weather conditions.
We believe European wheat prices will recover slightly over the short term after reaching one of their lowest levels in a year, hitting EUR196/tonne leading up to mid-June. The decline in prices came on the back of falling global prices and an appreciating euro, which reached a four-month high against the dollar in mid-June. In the coming weeks, leading up the European wheat harvest, we believe prices will rebound.
Indeed, we see benchmark CBOT wheat prices remaining supported over the short term owing to concerns over the US crop, for which we continue to forecast a production decline in 2013/14. US wheat crop conditions have been poor in recent months, with official sources also calling for a decline in production to roughly 56mn tonnes, down from 61mn tonnes in 2012/13.
Lactalis do Brasil, a subsidiary of Italian dairy company Parmalat, has bought Brazil-based Balkis Industria e Comercio de Laticinios (Balkis) for BRL70mn (US$30.7mn). The acquisition of Balkis, which is a specialist in typical gourmet cheeses, enables Parmalat to boost its gourmet cheese portfolio. The acquisition price is subject to adjustment on the basis of accounting reviews at the closing date, according to Parmalat. The acquisition includes a range of operations in Sao Paulo's gourmet cheese sector, including the Balkis production units in Santo Antonio do Aracangua and Juruaia.
Local industry sources have recently indicated that Italy's beef sector is becoming more and more dependent on imports, as the beef industry only manages to produce 20-25% of the country's needs, compared with 50% in previous years. This is because, in spite of higher production costs, which are mainly linked to higher feed prices, meat prices have fallen because of subdued demand in a tough economic environment. The decrease in beef selling prices in Italy contrasts with the dynamic in the rest of Europe, especially Germany, France and Ireland, where prices have been very supported lately, helping producers cushion the effect of surging input prices.
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