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Turkey Agribusiness Report Q3 2013 - New Market Study Published

Fast Market Research recommends "Turkey Agribusiness Report Q3 2013" from Business Monitor International, now available


Boston, MA -- (SBWIRE) -- 06/21/2013 -- We favour the sugar sector in Turkey because of the strong growth potential of the confectionary industry. We see little growth potential for the grain, dairy, livestock and rice sectors, where we believe the country's production growth will be hampered by high domestic production and input costs. In line with these views, we believe domestic confectionary companies will perform the best as they will take advantage of growing domestic sugar production capacity as well as a strong consumer story. We highlight Ulker Biskuvi Sanayi AS (Ulker) as an example for this.

Key Forecasts

- Wheat production growth to 2016/17: -0.9% to 19.8mn tonnes. We expect the country to remain a large importer over the medium term and believe production growth will lag behind consumption growth.
- Sugar consumption growth to 2016/17: 3.7% to 2.5mn tonnes. This will come on the back of strong growth for the confectionary industry as a whole as well as the positive consumer outlook.
- Beef production growth to 2016/17: 5.6% to 693,800 tonnes. This will come as producers look to tap into strong domestic growth in line with rising food consumption figures.
- 2013 real GDP growth: 4.4%, up from 2.2% in 2012.
- Consumer price inflation: 5.8% on average in 2013, down from 8.9% on average in 2012.
- BMI universe agribusiness market value: 7.8% year-on-year (y-o-y) decrease to US$19.8bn in 2012/13, forecast to increase by an annual average of 4.1% between 2012/13 and 2016/17.

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Key Developments

Turkey's confectionery industry is among Europe's most exciting, with great opportunities for growth. This is especially true given that incomes in the country are expected to rise - a fundamental driver of premiumisation, which of course is where the higher margin opportunities are. Consolidated confectionery volume sales for Turkey, which for our purposes is broken down into chocolate, sugar confectionery and gum sales, are forecast to grow at a compound annual rate of 2.5% to 2017.

We have revised down our forecast for wheat production in Turkey in 2013/14 to 18.0mn tonnes, from a previous forecast of 19.0mn tonnes. Plantings were reported to be lower in the 2013/14 season, and snow coverage was insufficient for plant development. The US Department of Agriculture indicated recently that the area planted to wheat decreased almost 10.0% year-on-year (y-o-y) for 2013/14 as farmers dedicated more acreage to corn, sunflower and forage crops. The shift in plantings was unexpected, and local industry sources do not believe it will continue in the coming seasons.

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