New Food market report from Business Monitor International: "Mozambique Agribusiness Report Q3 2012"

Boston, MA -- (SBWire) -- 08/07/2012 --BMI View: Increased cultivation, an improving macroeconomic outlook, access to export markets and investments into enhancing the productivity of domestic mills are the key factors behind our highly optimistic outlook for sugar production in Mozambique. While these factors will also have an effect on production and consumption growth in the livestock and grains segments, we highlight that growth in these sectors remains highly vulnerable to external factors. Weather-related hazards such as flooding and drought pose serious downside risks to grains production, and the recurring problem of pests and diseases threatens the livestock sector. Nevertheless, we believe that government support and incentives could be the biggest encouragement for growth in these sectors.

Key Forecasts

- Corn production growth to 2016: 14.8% to 2.4mn tonnes. Strong corn output growth will occur on the back of a rapidly expanding population as well as a steady increase in the use of corn as a feed for livestock and poultry.
- Sugar production growth to 2015/16: 89.6% to 534,000 tonnes. As one of Mozambique's key cash crops, long-term production growth will reflect an increase in export-driven demand and the opening up of new markets; sugar production is also expected to benefit from investment in biofuels.
- Poultry production growth to 2015/16: 28.3% to 54,800 tonnes. Although we expect steady production growth, Mozambique is expected to develop a growing reliance on imported poultry meat. This reflects a widening shortfall in the supply of edible poultry meat relative to rising consumption demand.
- Real GDP growth 2012: 7.4% (down slightly from 7.5% in 2011); predicted to average 7.5% in the five years to 2016.
- Consumer price inflation 2012: 6.8% (down from an average of 6.1% in 2011; predicted to average 7.7% to 2016). As an importer of significant quantities of wheat, sugar, milk and rice, Mozambique is vulnerable to rising international commodity prices. High prices for these staples inevitably feed inflation, sapping consumer purchasing power.

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Key Views And Developments

Mozambique's agribusiness will continue to benefit from a relatively new wave of 'south-south' investment, which has seen a number of rapidly growing emerging markets - particularly from Asia but also from countries such as Brazil - invest in industries with strong growth potential. In June 2012, Armando Ussivane, the chairperson of the board overseeing the state-owned Lower Limpopo Irrigation Scheme, revealed that its management is looking to partner with China with a view towards boosting productivity within areas covering 12,000 hectares (ha). The initiative looks to increase productivity in wheat and rice cultivation from the current 3 tonnes/ha to about 10 tonnes/ha.

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