2013-01-30 08:45:58 - New Food research report from Business Monitor International is now available from Fast Market Research
BMI View: Weakened demand from the US and the Europe along with lower prices for a number of key export products contributed to a year-on-year decline of 5.9% in Peru's agricultural exports from January to September 2012. Lower global prices for produce such as coffee, cocoa, avocado and paprika saw export revenues decline to US$2.9bn, down from almost US$3.2bn over the same period in 2011.
However, non-traditional agricultural exports increased by 6.0% to US$2.3bn, boosted by strong growth in sales of asparagus, grapes and evaporated milk. Despite the dip in export revenues, our outlook for Peru's agricultural sector remains positive. Coffee aside, we see production increasing in 2013 for key segments. Consistent economic growth along with investment in infrastructure and improved
production techniques will help to support output growth over our forecast period.
Full Report Details at
* Although we are expecting a moderation in real GDP growth in Peru over the next five years, we believe the economy will remain one of the most dynamic in Latin America. We forecast average real GDP growth of 5.5% between 2012 and 2017. This view is underpinned by a burgeoning consumer story and a strong investment outlook.
* High grains prices are set to see demand for barley grow in 2013. We forecast consumption to increase by 5.5% year-on-year (y-o-y) to 293,000 tonnes. Out to 2017, we forecast demand for barley to grow by 18.3% on the 2012 level to 328,500 tonnes.
* In 2013, we see beef production expanding by 1.2% y-o-y to take output to 176,000 tonnes. Out to 2017, we see production growing by 6.9% on the 2012 level to reach 186,000 tonnes. Production will be supported by robust economic growth.
* In 2013, we forecast a 3.1% increase in milk consumption to reach 988,300 tonnes as the economy continues to post strong growth. To 2017, we forecast consumption to rise by 16.2% to 1.11mn tonnes.
* Coffee production is forecast to fall by 9.6% y-o-y in 2012/13 to 4.7mn bags owing to wet weather, outbreaks of disease and labour shortages. Output is expected to rebound by 9.4% y-o-y to 5.14mn bags in 2013/14, as the coffee plants enter their 'on' year and fertilisation and regeneration programmes begin to bear fruit. Over our forecast period to 2017, we expect coffee production to increase by 4.4% on the high 2012 level to reach 5.4mn bags.
Key Trends And Developments
* US agricultural exports to Peru fell by 30% y-o-y from January to September 2012. This was caused by a 49% fall in commodity exports, which account for 67% of total agricultural exports to Peru. Wheat imports fell by 79.2% on the 2011 level of 472,000 tonnes, owing primarily to higher prices relative to Argentine wheat. Imports of US corn have fallen to almost zero, down from a high of 627,000 tonnes in 2010, as Peruvian importers again sourced cheaper produce from South American neighbours.
* In November 2012, Peru's congress implemented a bill to ban genetically modified (GM) organisms for a period of 10 years. The regulation follows the approval by the Peruvian government of a GM moratorium in December 2011. The purpose of the moratorium is to allow sufficient time for the ministry of the environment to develop the necessary infrastructure and establish a baseline on native biodiversity in order to evaluate the risk posed by GM materials. The regulations have been criticised by the US Department of Agriculture, which cited a lack of clarity as to how these objectives will be achieved and how progress will be measured. There are concerns that the law will delay the adoption of biotechnology, which is sought by a growing number of agricultural producers.
* The decline in coffee prices continued in Q312, with prices sinking to USc173/lb in October. Between January and September 2012, coffee exports stood at US$655.4mn, down by 32.1% on the same period in 2011. For the full year, exports are expected to come in at US$1bn, down 36.7% y-o-y on the back of lower prices and fewer orders.
* Peru's agriculture ministry carried out the first agricultural census for 18 years in the four weeks to November 15 2012. The census will provide updated information to inform the Peruvian government's agricultural policies. It is the fourth agricultural census in Peru, following censuses in 1961, 1970 and 1994. The census was carried out in 1,800 districts, and more than 2mn producers were registered.
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