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Now Available: Colombia Agribusiness Report Q1 2014

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2014-01-03 19:02:35 - New Food research report from Business Monitor International is now available from Fast Market Research

Colombia's agricultural sector faces a number of challenges in the medium term. Key export crops - such as coffee and cocoa - have underperformed in recent years owing to a lack of investment in infrastructure and serious outbreaks of disease. Although regeneration work is under way, it will take time to bear fruit. The strength of the Colombian peso against the US dollar is also posing challenges for the agribusiness sector, as the competitiveness of Colombia's exports is being eroded. Finally, there is still unrest among dairy, livestock and grain producers who fear that the entry into force of the Colombia-EU free trade agreement will further erode their profitability. The Ministry of Agriculture has taken steps to support these sectors

to adapt to the arrival of inexpensive imports; however, ongoing efforts to improve infrastructure and modernise production techniques will be required.

Key Forecasts

* Sugar consumption growth to 2017: 9.3% to 1.93mn tonnes. This will mainly be driven by increases in the consumption of confectionery products as per capita incomes rise amid a growing youth population.
* Poultry production growth to 2016/17: 11.3% to 1.24mn tonnes. The consolidation of the sector will accelerate in the coming years following a difficult period in which poultry producers struggled with soaring feed prices and sluggish demand.
* Coffee production growth to 2016/17: 36.5% to 10.44mn tonnes. Production will be aided by programmes to replace aging plantations and improve resistance to disease. However, we remain cautious about the long-term trajectory of Colombian coffee production, especially with prices currently low and given the strong Colombian peso.
* BMI universe agribusiness market value: US$15.1bn in 2014; up from US$14.8bn in 2013. Growth expected to average 2.6% annually between 2013 and 2017.
* 2014 real GDP growth: 4.5%; up from 4.3% in 2013. Forecast to average 4.5% from 2013 to 2017.
* 2014 consumer price index: 3.0%; up from 2.1% in 2013. Forecast to average 3.1% from 2013 to 2017.
* 2014 central bank policy rate (average): 4.00%; up from 3.25% in 2012. Forecast to average 4.25% from 2013 to 2017.

Full Report Details at
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Key Revisions To Forecasts

* 2012/13 coffee production forecast revised up, to 9.90mn 60kg bags (compared with a previous forecast of 9.4mn bags), as favourable weather and the first harvest of new higher-yielding trees boosted output in the last six months of the season.

Industry Developments

Dairy farmers in Colombia took part in the widespread protests in August-September 2013 that were initiated by small-scale farmers throughout Colombia. Farmers from various sectors, including dairy, poultry, potatoes and coffee, protested trade agreements with the US and Europe. The trade agreement with the United States immediately abolished tariffs on 70% of agricultural imports and phases them out for remaining products. Dairy farmers in particular highlighted their concerns about milk being smuggled into Colombia from neighbouring Venezuela and Ecuador and sold at lower prices, undercutting Colombian milk producers. The government agreed to marginal changes to the import policy.

Colombia's coffee sector is reaping the fruits of improved weather and the first harvests of the disease-resistant trees replanted as part of the replanting programme initiated in 2010. Coffee output soared from April 2013, averaging 913,000 bags/month in the last six months of the season, up 46.8% y-o-y. In October 2013, the first month of the 2013/14 season, production reached 1.1mn bags, which is the highest monthly production level since 2010. Exports have also recovered strongly in recent months, with weakness in the Colombian peso and a marketing push towards untraditional export markets supporting shipments abroad.

The expected opening of the first Starbucks coffee shop in Bogota in 2014 highlights the success of Fedecafe's goal to increase coffee consumption in Colombia. The company plans on opening six shops in 2014, and mentioned in August 2013 it could have as many as 50 shops in five years. Starbucks also is forming a pact with the US Agency for International Development to invest US$3mn to secure coffee quality and supply in certain regions of Colombia.

To capitalise on the world's growing desire for chocolate, the Colombian Government released an ambitious 10-year plan to transform Colombia from a cacao importer to a major cacao exporter. According to the 'Plan Decenal,' Colombia will increase production of cacao from the 42,000 tonnes produced in 2010 to 246,000 tonnes by 2021. We see this goal as overly optimistic, as our own forecast calls for a mild increase, to 51,500 tonnes, by 2017.

About Business Monitor International

Business Monitor International (BMI) offers a comprehensive range of products and services designed to help senior executives, analysts and researchers assess and better manage operating risks, and exploit business opportunities, across 175 markets. BMI offers three main areas of expertise: Country Risk BMI's country risk and macroeconomic forecast portfolio includes weekly financial market reports, monthly regional Monitors, and in-depth quarterly Business Forecast Reports. Industry Analysis BMI covers a total of 17 industry verticals through a portfolio of services, including in-depth quarterly Country Forecast Reports. View more research from Business Monitor International at

About Fast Market Research

Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available.

For more information about these or related research reports, please visit our website at or call us at 1.800.844.8156.

Bill Thompson
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