New Food market report from Business Monitor International: "Nigeria Agribusiness Report Q4 2013"
Boston, MA -- (SBWIRE) -- 09/24/2013 -- BMI View: The upturn in cocoa prices we expect to see in 2014 and 2015 has led us to take a more optimistic view of the sector's medium term future. Over the last quarter cocoa has attracted significant private investment and we see opportunities for further growth as global demand recovers. Corn production will struggle to recover from the floods that destroyed swathes of farmland in the autumn of 2012 as seeds for the next harvest remain in short supply. Grain production and the poultry sector have also been disrupted by the deteriorating security situation in northern Nigeria. While we expect the government to restore order in the three states in which a state of emergency was declared in May, the crisis has damaged infrastructure and discouraged investment.
- Cocoa production growth to 2016/17: 31.1% to 308,000 tonnes. A rebound in global prices due to the struggles of other West African producers will provide stimulus to production growth supported by burgeoning investment.
- Sugar consumption growth to 2017: 37.2% to 1.7mn tonnes. Lower prices in the global market will combine with higher incomes to sustain strong demand growth.
- BMI universe agribusiness market value: 10.7% year-on-year (y-o-y) decrease to US$6.9bn in 2013, forecast to grow by 2.4% in 2014 and by an average of just under 6% a year from 2014-17.
- Real GDP growth 2013: 6.7% y-o-y, (up from 6.6% in 2012; expected to be 7.2% in 2014).
- Unemployment rate 2013: 23.6% (down from 24.4% in 2012).
- Inflation (annual average, % chg y-o-y) 2013: 8.8% (down from 12.0% in 2012; expected to be 7.5% in 2014).
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Key Revisions To Forecasts
- Corn forecast for 2012/13: revised down to 7.6mn tonnes (from a previous forecast of 9.4mn tonnes). More up-to-date information reveals the full extent of devastation caused by the floods.
Nigerian cocoa producers have had problems of their own with falling production due to bad weather in 2011/12 and 2012/13, but West Africa's biggest producers, Cote d'Ivoire and Ghana are also expected to see stagnating or falling production out to 2017 leading us to revise our forecasts for cocoa prices upward. We now see LIFFE cocoa prices averaging GBP1,475/tonne in 2013 and GBP1,550 in 2014 before averaging higher in the following years. This compares to our previous forecast for GBP1,350/tonne in 2013 and 2014. These higher prices could provide the impetus we previously saw as lacking in the government's attempts to increase production.
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