Boston, MA -- (SBWIRE) -- 05/28/2014 -- We project growth for the majority of the commodities covered in this report over our forecast period to 2018; however, the rates of growth will be lacklustre. An ongoing power supply crisis - characterised by ever-increasing tariffs and frequent lengthy shutdowns - has meant rice and flour mills as well as cotton gins face very challenging operating conditions. The rising costs of diesel and fertiliser present similar obstacles for farmers. While there are some indications that the government is trying to improve the situation by holding down fertiliser costs and reforming the energy sector, any positive results may be a long time coming. More positively, rice production will recover the ground lost during 2012 flooding, and we expect to see modest growth continuing to 2018. Pakistani basmati has become more price-competitive with Indian produce, which may allow Pakistan's exporters to recover ground in the key EU and Middle Eastern markets.
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- Cotton consumption growth to 2018: 10.5% to 12.2mn 480lb bales. Favourable trade agreements with the EU will see an increase in demand from the textile industry, but higher prices will see growth rates moderate in the later years of the forecast period.
- Wheat production growth to 2017/18: 9.3% to 26.4mn tonnes. Production growth will be slow as farmers struggle with rising input costs, particularly fuel and fertiliser.
- 2014 real GDP growth: 3.4%. Down from 3.6% in 2013.
- Consumer price inflation: 9.0% in 2014 (up from 7.4% in 2013).
- BMI universe agribusiness market value: USD41.4bn in 2014 (down from USD41.9bn in 2013; forecast to grow annually by 2.4% on average to 2018).
Regulatory issues have delayed the authorisation of new varieties of Bt cotton seed in Pakistan, with responsibility for many agricultural issues the subject of constitutional wrangling between state governments and the federal government. The federal government has also delayed the passage of the Seed Act Amendment and the Plant Breeder's Right Bill, with the result that the legal status of new Bt seed varieties is in doubt. Punjab has taken matters into its own hands by authorising a further 15 Bt seed varieties without waiting for final approval from the National Biosafety Committee. Farmers across the country have begun using the Bt seeds approved by Punjab, which if effective would present an upside risk to our production forecasts.
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