Recently published research from Business Monitor International, "Italy Agribusiness Report Q3 2012", is now available at Fast Market Research
Boston, MA -- (SBWIRE) -- 07/31/2012 -- BMI View: Despite general dry weather conditions in Europe, Italy's grains production should rebound slightly in 2012/13. This will make the country less dependent on imports, especially thanks to high stocks and moderating consumption on the back of a bleak economic outlook. For dairy and livestock, farmers' margins are still being squeezed, especially as subdued growth in consumers' income discourage consumption of value added or more costly products like cheese and beef. However, the country still has tremendous export opportunities.
- Wheat production growth to 2015/16: 5.9% to 6.9mn tonnes Production should 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, should also help to boost wheat production.
- Cheese consumption growth to 2015/16: 17.8% to reach 1.7mn tonnesIn contrast to fluid milk, Italian 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 2015/16: 17.8% to 1.4mn tonnes Poultry is a relatively cheap meat and as such can expect continued strong demand in a tough economic climate.
- 2012f real GDP growth: -1.4% ave (down from 0.7% in 2011)
- 2012f Consumer price index: 1.7% ave (up from 2.9% in 2011)
- BMI universe agribusiness market value: 3.8% year-on-year (y-o-y) decline to US$17.5bn in 2011/12, forecast to grow on average 3.5% annually between 2010/11 and 2015/16.
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Strong wheat stocks in Italy will reduce import needs in the coming months. In fact, local industry sources have reported that imports of wheat and corn from the country, traditionally a major grain buyer in Europe, were smaller in January-February compared to the same period in 2011. Imports of soft wheat increased by 17.0% to 689,270 tonnes in January-February, while corn imports dropped 29.0% to 387,632 tonnes and durum wheat fell 46.4% to 196,165 tonnes. Apart from high stocks, the decrease can be explained by lower demand as well as bad weather in Ukraine, the country's largest supplier, which hindered grain sales.
We have revised down our forecast for production in 2012/13 because farmers are expected to plant less rice that year. We now forecast production to fall 2.9% to 1.56mn tonnes as area is expected to fall from 247,000 hectares (ha) in 2011/12 to 238,000 tonnes in 2012/13. On the contrary, the country's wheat and corn areas are meant to rise about 15.0% and 2.0% respectively. Our forecast is based on a high yield of 6.5tonne/ha based on better technologies in the rice fields. However, the USDA's forecasts imply a 4.2tonnes/ha yield on lower investment in the crop and if these assumptions were to be validated, we would revise down our forecast in the coming months.
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