Boston, MA -- (SBWire) -- 03/12/2013 --BMI View: We favour the sugar sector in Turkey because of the strong growth potential of the confectionary industry. We see little growth potential for the grain, dairy, livestock and rice sectors, where we believe the country's production growth will be hampered by high domestic production and input costs. In line with these views, we believe domestic confectionary companies will perform the best as they will take advantage of growing domestic sugar production capacity as well as a strong consumer story. We highlight Ulker Biskuvi Sanayi AS (Ulker) as an example for this.
Key Forecasts
- Corn production growth to 2016/17: 4.2% to 5.9mn tonnes. The increase in production will be buoyed by improving demand from the livestock sector as well as artificially high domestic prices on the back of import restrictions linked to biosafety laws.
- Sugar consumption growth to 2016/17: 3.7% to 2.5mn tonnes. This will come on the back of strong growth for the confectionary industry as a whole as well as the positive consumer outlook.
- Beef production growth to 2016/17: 5.6% to 693,800 tonnes. This will come as producers look to tap into strong domestic growth in line with rising food consumption figures. - 2013 real GDP growth: 4.4%, up from 3.0% in 2012.
- Consumer price inflation: 5.8% on average in 2013, down from 8.2% on average in 2012.
- BMI universe agribusiness market value: 7.8% year-on-year (y-o-y) decrease to US$19.8bn in 2012/13, forecast to increase by an annual average of 4.1% between 2012/13 and 2016/17.
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Key Developments
Switzerland's Barry Callebaut, the world's leading business-to-business Chocolate manufacturer, is going to build a plant in Turkey. Even chocolate, which famously often does well even in recessionary times as a quintessentially affordable luxury, has found the going tough in Western Europe while by contrast, demand for high-end chocolate continues to grow nicely across much of the emerging world. Turkey certainly falls into this category with per capita consumption of chocolates forecast to reach just 1.6kg in 2012, which is well short of the levels consumed in mature markets, such as France and the UK, as the second chart illustrates. This is where the opportunity lies for companies such as Barry Callebaut. It is believed that the Turkey plant will have a production capacity of about 15,000 tonnes.
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Turkey Agribusiness Report Q2 2013 - New Study Released
Recently published research from Business Monitor International, "Turkey Agribusiness Report Q2 2013", is now available at Fast Market Research