Argentina Agribusiness Report Q4 2010
Business Monitor International, September 2010, Pages: 57
The Argentina Agribusiness service provides proprietary medium term price forecasts for key commodities, including corn, wheat, rice, sugar, cocoa, coffee, soy and milk; in addition to newly-researched competitive intelligence on leading agribusiness producers, traders and suppliers; in-depth analysis of latest industry developments; and essential industry context on Argentina's agribusiness service.
Argentine grain and soybean production is estimated to rebound significantly in 2009/10 following the country's worst drought in years in the 2008/09 season. The increase in grain and soybean output should help the country control its food price inflation problems and help the country's famous, albeit embattled, beef sector to increase output. Over the short term, we forecast production gains across the grains and livestock segments. However, the acrimonious relationship between the Argentine government and its farmers poses a significant downside production risk.
- Wheat production growth to 2014: 93% to 17.4mn tonnes. We expect the area harvested to increase as improved prices and export opportunities arising from increasing livestock and biofuel production encourage farmers to plant corn. However, some of this growth will also be due to base effects.
- Sugar consumption growth to 2014: 5% to 2.8mn tonnes. Demand for sugar has been hit by the increased use of sweeteners in the food processing sector. Consumption will increase mainly because of population growth, rather than significant per capita consumption increases, as well as increasing long-term ethanol production from sugar.
- Poultry consumption growth to 2014: 16% to 2.8mn tonnes. We also forecast steady growth in Argentine poultry consumption as consumers turn towards the healthier option. They are also gradually turning to poultry due to the rising price of beef.
- Consumer Price Inflation: 11.2% year-on-year (y-o-y) in July 2010, up from 5.5% y-o-y in July 2009.
From 2010, under the government's biofuel law, all gasoline sold in Argentina must contain at least 5% ethanol. In February 2010, service stations in the capital Buenos Aires began selling the 5% ethanol blend. YPF, Shell and Petrobras are already selling the blend in stations in north-west Argentina. The new law will cause domestic production of ethanol increase and we expect millers to invest in ethanol production in the coming years. ProsperAr, Argentina's national investment development agency, anticipates that the biofuel law will create annual captive demand for about 243,000m3 of bioethanol. Argentine beef has always enjoyed a reputation as some of the best in the world. Cattle roam vast grasslands and consumers benefit from the superior taste and texture that this semi-wild rearing gives the meat. However, there is significant government interference in the sector. In another attempt to control soaring food price inflation, the government banned beef exports in July 2010. The ban highlights our poor 2009/10 beef production outlook, which combined with high domestic consumption rates has led to a tightened local market. The government's move also highlights the poor relationship between it and Argentina's farmers, many of which have sent fewer animals to market in order to raise prices.
Argentina is the world's third largest soybean producer, behind the US and Brazil, and is the biggest exporter of the crop. In 2010/11, we expect soybean production to decline slightly as the area harvested is forecast to fall to 18.5mn hectares. More area is being used for corn, the price of which is relatively high by the standards of recent quarters. Through to 2013/14, we expect strong worldwide demand for soybeans, especially from emerging markets, to ensure production growth remains strong and we forecast production to rise to nearly 68mn tonnes
Executive Summary
SWOT Analysis
Argentina Political SWOT
Argentina Economic SWOT
Argentina Business Environment SWOT
Industry Forecast Scenario
Argentina Sugar Outlook
Table: Argentina Sugar Production, Consumption & Trade, 2009-2014 ('000 tonnes)
Table: Argentina Sugar Production, Consumption & Trade, 2005-2010 ('000 tonnes)
Argentina Livestock Outlook
Table: Argentina Poultry Production, Consumption & Trade, 2009-2014 ('000 tonnes)
Table: Argentina Pork Production, Consumption & Trade, 2009-2014 ('000 tonnes)
Table: Argentina Beef & Veal Production, Consumption & Trade, 2009-2014 ('000 tonnes)
Argentina Dairy Outlook
Table: Argentina Milk Production, Consumption & Trade, 2009-2014 ('000 tonnes)
Table: Argentina Butter Production, Consumption & Trade, 2009-2014 ('000 tonnes)
Table: Argentina Cheese Production, Consumption & Trade, 2009-2014 ('000 tonnes)
Table: Argentina Whole Milk Powder Production, Consumption & Trade, 2009-2014 ('000 tonnes)
Table: Argentina Milk Production, Consumption & Trade, 2005-2010 ('000 tonnes)
Table: Argentina Butter Production, Consumption & Trade, 2005-2010 ('000 tonnes)
Table: Argentina Cheese Production, Consumption & Trade, 2005-2010 ('000 tonnes)
Table: Argentina Whole Milk Powder Production, Consumption & Trade, 2005-2010 ('000 tonnes)
Argentina Grains Outlook
Table: Argentina Wheat Production, Consumption & Trade, 2009-2014 ('000 tonnes)
Table: Argentina Corn Production, Consumption & Trade, 2009-2014 ('000 tonnes)
Table: Argentina Barley Production, Consumption & Trade, 2009-2014 ('000 tonnes)
Table: Argentina Sorghum Production, Consumption & Trade, 2009-2014 ('000 tonnes)
Table: Wheat Production, Consumption & Trade, 2005-2010 ('000 tonnes)
Table: Argentina Corn Production, Consumption & Trade, 2005-2010 ('000 tonnes)
Table: Argentina Barley Production, Consumption & Trade, 2005-2010 ('000 tonnes)
Table: Argentina Sorghum Production, Consumption & Trade, 2005-2010 ('000 tonnes)
Argentina Rice Outlook
Table: Argentina Rice Production, Consumption & Trade, 2009-2014 ('000 tonnes)
Table: Argentina Rice Production, Consumption & Trade, 2005-2010 ('000 tonnes)
Argentina Soybean Outlook
Table: Argentina Soybean Production, Consumption & Trade, 2009-2014 ('000 tonnes)
Table: Argentina Soybean Production, Consumption & Trade, 2005-2010 ('000 tonnes)
Competitive Landscape
Table: Agricultural Commodity Producers & Traders
Table: Agribusiness Suppliers
Table: Integrated Agricultural Producers
Commodity Price Analysis
Softs Update
Cocoa
Table: Cocoa
Coffee
Table: Coffee
Milk
Table: Milk
Sugar
Table: Sugar
Grains Update
Corn
Table: Corn
Rice
Table: Rice
Soybean
Table: Soybean
Wheat
Table: Wheat
Downstream Supply Chain Analysis
Macroeconomic Forecast
Table: Argentina - Economic Activity, 2007-2014
Industry Trend Analysis
Table: Argentina – Soybean Production, Consumption & Trade
BMI Forecast Modelling
How We Generate Our Industry Forecasts
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