Colombia Agribusiness Report Q1 2011
Business Monitor International, January 2011, Pages: 81
The Colombia 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 Colombia's agribusiness service.
BMI View: During Q410, Colombia was hit by torrential rains brought about by La Niña weatherphenomenon that have caused widespread flooding and left at least 1.5mn people homeless. At least 170people have been killed by landslide and floods. The scale of the devastation led the Colombiangovernment to declare a national state of emergency in late November 2010. The flooding is the worst in60 years and there are fears that the rains could continue into 2011. The adverse weather conditions haveflooded some 800,000 hectares of crop and pasture land and washed away roads, disruptingtransportation. The rains have caused particular damage to the 2010/11 coffee harvest, denting hopes for arecovery in output after two successive years of low production. The rains have also raised fears thatinflation will increase, with food prices likely to come under pressure.
Despite the widespread devastation caused by the flooding, our outlook for the Colombian economygoing forward is extremely positive. Its accommodative business environment and investor-friendlypolicy mix imply its growth is set to accelerate over the medium term, while other key economies in theregion are slowing down. We forecast real GDP growth to come in at 3.9% in 2010, 4.7% in 2011 and4.9% in 2012. The new President Juan Manuel Santos' social reform agenda and strong stance against therebel movement augurs well for an improvement in the country's security situation over the medium term.This in turn will aid the agricultural sector by encouraging much needed investment in moderntechnologies and infrastructure.
Key Forecasts
We have revised down our estimate for the 2009/10 coffee harvest to 8.40mn 60kg bags on the back ofpoor weather. We have also revised down our forecast for 2010/11 as a result of the recent heavy rains.We now see increasing by 10.8% year-on-year (y-o-y) on historically low levels to reach just 9.30mnbags.
Sugar production is forecast to increase by 2.5% y-o-y in 2010/11 to take output to 2.26mn tonnes. Thiscomes after a disappointing harvest in 2009/10, which saw production fall by 3.2% y-o-y to 2.21mntonnes after drought followed by heavy rains caused extensive crop damage. Demand is forecast to growby 3.5% y-o-y to 1.66mn tonnes as Colombia's economy posts strong growth and demand from thebaking and confectionary industries picks up along with increases in consumers' disposable incomes.The increased demand for feed from the livestock and dairy sectors will see corn consumption growingstrongly in 2010/11. Demand is forecast to rise by 4.9% y-o-y to 5.33mn tonnes.
Production and demand for processed dairy products are both forecast to increase in 2010/11, fuelled bystrong economic growth and the increase in consumers' disposable incomes. We forecast butter outputincreasing by 4.6% y-o-y to reach 23,420 tonnes, and anticipate a 6.1% y-o-y expansion in cheeseproduction to 62,320 tonnes. On the demand side, we see demand in 2011 for butter rising by 5.6% y-o-yto 24,110 tonnes; while cheese consumption is forecast to increase by 2.9% y-o-y to 61,670 tonnes.
Key Trends and DevelopmentsRelations continue to improve between the Colombian and Venezuelan governments following the longrunningdispute that led to the suspension of trade in July 2009. Colombian President Juan Manuel Santosmet with his Venezuelan counterpart Hugo Chávez in Caracas in November 2010 to discuss a free tradeagreement (FTA) that will govern trade between the two countries following Venezuela's withdrawalfrom the Community of Andean Nations (CAN) in April 2011. The meeting was the first of six plannedrounds of negotiations.
In October 2010, the Federacion Nacional de Avicultores de Colombia (FENAVI) won the inauguralInternational Poultry Council (IPC) generic marketing award at the IPC annual meeting held in Santiago,Chile. The award came in recognition of the success of FENAVI's three-year campaign to increaseColombia's consumption of chicken. The campaign featured cartoon chicken commercials, with thestraplines 'Let's eat chicken' and 'Without chicken, there is no meal'. The campaign helped to increase percapita consumption from an estimated 21.3kg to 23.7kg in two years. Per capita consumption of chickennow outstrips beef, which stands at just over 19kg per person.
The duty on imports of US corn to Colombia was reduced from 15% in September 2010 to 5% in Octoberin response to the spike in the price of corn on the international market. Corn prices surged by more than70% from May-October, due to increased demand from emerging markets, along with reduced output inthe US, the world's largest corn exporter. Grain production in Russia, Ukraine, Kazakhstan and SouthAmerica has also been hit by drought, fuelling fears of a supply shortage. The tariff reduction is intendedto offset to some extent the price hike. The reduction is likely to lead to an increase in imports from theUS between December and March, when there is little supply of corn from Argentina and Colombia.
The 27th National Congress of cocoa growers took place in Bogota in November 2010. At the Congress,the Colombian government pledged to increase its support to the beleaguered cocoa sector during 2011.Juan Camilo Restrepo Salazar, the Colombian Minister of Agriculture and Rural Development, assuredcocoa growers that the government would increase investment to ensure that cocoa production continuesto grow over the coming years. In particular, funding will be made available to combat Moniliophthora(Monilia), or frosty pod rot, a fungal disease that attacks cocoa trees, particularly during the winter,causing major decreases in yield. The government's backing for the cocoa sector will prove crucial goingforward, as investment is urgently needed in order to modernise ageing cocoa plantations and tomaximise the sector's rich potential."
Executive Summary
Key Forecasts
Key Trends and Developments
SWOT Analysis
Colombia Agriculture SWOT
Colombia Political SWOT
Colombia Economic SWOT
Colombia Business Environment SWOT
Industry Forecast Scenario
Colombia Grains Outlook
Colombia Wheat Production, Consumption & Trade
Colombia Corn Production, Consumption & Trade
Colombia Barley Production, Consumption & Trade
Colombia Wheat Production, Consumption & Trade
Colombia Corn Production, Consumption & Trade
Colombia Barley Production, Consumption & Trade
Colombia Cocoa Outlook
COLOMBIA Cocoa Production, Consumption & Trade
COLOMBIA Cocoa Production, Consumption & Trade
Colombia Sugar Outlook
Colombia Sugar Production, Consumption & Trade
Colombia Sugar Production, Consumption & Trade
Colombia Livestock Outlook
Colombia Poultry Production, Consumption & Trade
Colombia Pork Production, Consumption & Trade
Colombia Beef & Veal Production, Consumption & Trade
Colombia Poultry Production, Consumption & Trade
Colombia Pork Production, Consumption & Trade
Colombia Beef & Veal Production, Consumption & Trade
Colombia Coffee Outlook
Colombia Coffee Production & Consumption
Colombia Coffee Production & Consumption
Colombia Dairy Outlook
Colombia Milk Production & Consumption
Colombia Butter Production, Consumption & Trade
Colombia Cheese Production, Consumption & Trade
Colombia Whole Milk Powder Production, Consumption & Trade
Colombia Milk Production & Consumption
Colombia Butter Production, Consumption & Trade
Colombia Cheese Production, Consumption & Trade
Colombia Whole Milk Powder Production, Consumption & Trade
Competitive Landscape
Table: Agricultural Commodity Producers & Traders
Table: Agribusiness Suppliers
Table: Integrated Agricultural Producers
Commodity Price Analysis
Monthly 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
Industry Forecast Scenario
Consumer Outlook
Food
Total Food Consumption
Table: Food, drink and tobacco indicators
Canned Food/Prepared Food
Table: Canned Food Sales
Confectionery
Table: Confectionery Sales
Mass Grocery Retail
Table: Structure of Colombia's Mass Grocery Retail Market - Sales by Format (COPbn)
Table: Sales Breakdown by Retail Format Type
Trade
Table: Trade Balance
Macroeconomic Forecast
Colombia - Economic Activity
Company News Alert
Exito Results Highlight Strong Bounce In Colombian Consumer Demand
Alqueria Well Positioned To Capitalise On Growing Demand For Dairy Following World Bank Investment
Global Food & Drink View
- Exito
- Alqueria
Product Samples
A sample for this product is available. Please Login/Register to download this sample.
Customers who bought this item also bought
All rights reserved. © Copyright 2013 Research and Markets WWW5
Terms and Conditions Privacy Policy Publishers Employment Opportunities Site Map Link to us Webmaster Affiliate Network
