New Food market report from Business Monitor International: "Spain Agribusiness Report Q1 2013"
Boston, MA -- (SBWIRE) -- 03/15/2013 -- BMI View: Our core view for the Spanish agribusiness sector envisages a very difficult operating environment for grain, livestock and dairy producers in the short term amid a changing regulatory framework, increasing input costs, a poor macroeconomic outlook and weak domestic demand. However, from a medium-to-longer-term perspective, we see conditions turning favourable for growth in the corn, processed dairy and pork segments.
- Wheat production to 2016/17: -6.6% to 6.7mn tonnes. Although we believe adverse weather conditions in 2012/13 will not be repeated, production is likely to grow only modestly over our forecast period to 2016/17.
- Cheese consumption to 2016/17: 18.8% to 431,600 tonnes. Cheese typically has been consumed most during social occasions in Spain. It is now becoming increasingly popular and a household staple.
- Pork production to 2016/17: 8.0% to 3.8mn tonnes. We note that two new EU directives on swine farming are likely to force some less efficient producers to leave the industry.
- 2013 GDP growth: -0.2% (from -2.1% growth in 2012)
- 2013 consumer price index: 1.3% annual average (from 1.4% in 2012)
- BMI universe agribusiness market value: 9.4% year-on-year (y-o-y) decline to US$12.1bn in 2012/13, forecast to decline an average 0.24% y-o-y between 2012/13 and 2016/17.
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In December 2012, Spanish dairy products manufacturer Grupo Leche Pascual (GLP) entered into a partnership with Asia Brewery to form AB Pascual Foods, a 50:50 joint venture firm with plans to sell pasteurised yoghurt in the Philippines. The venture is welcome news for the Spanish dairy segment, as nearly 2.6mn kg of yoghurt are to be exported from Spain at the outset. In the longer term, the firm will be examining the possibility of manufacturing yoghurts locally, according to GLP president Tomas Pascual. The development falls in line with GLP's strategy to increase product diversification in order to be less vulnerable to movements in prices of one commodity group (in this case milk) and to develop sales in emerging markets, especially Asia, where there is large potential for dairy product demand growth.
In December 2012, the European Commission introduced measures to increase sugar supplies in the bloc amid falling stocks and a gap between domestic and global prices. The move could result in increased supply of nearly 1.2mn tonnes of sugar, part of which will come from raw cane sugar imported at reduced duties and the remainder from the sale of domestic beet sugar produced over national production quotas. Plans are also under way to allow the export of an additional 700,000 tonnes of out-of-quota sugar in the 2012/13 marketing year, bringing total exports to 1.35mn tonnes. This level of export will also fall within the 1.37mn tonnes limit imposed by the World Trade Organization.
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