|
|
 |
|
Viewing report
|
|
|
|
Australia Agribusiness Report Q1 2012
Business Monitor International, Jan 2012, Pages: 62
Business Monitor International's Australia 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 Australia's agribusiness service.
- Use BMI's independent 5-year industry forecasts to test other views - a key input for successful planning in dynamic agribusiness markets.
- Apply BMI's medium term commodity price forecasts to assist with budgetary planning and the identification of investment opportunities and potential risks
- Exploit latest competitive intelligence on your competitors and peers in Asia, Europe, Latin America, the Middle East and Africa through our company rankings and analysis.
BMI View: Strong production across the different agricultural sectors should make for a good year for Australian agriculture exporters; we expect the highest growth in wheat and livestock output in 2011/12. According to the Ministry of Agriculture, the total value of Australian agricultural, fisheries and forestry exports is projected to reach AUD38.4bn (US$38.0) in 2011/12, up 6.3% from AUD36.1bn in 2010/11.This is reinforced by rural confidence having rebounded from the lowest level in two years, according to a survey conducted by Rabobank completed in November 2011. For all agriculture segments except dairy, there was an improvement in expectations for the next quarter, with positive sentiment increasing from 18% to 24%, up from the previous quarter.
Key Forecasts
- Beef production growth to 2015/16: 5.7% to 2.3mn tonnes. We expect Australia to remain a strong exporter of the meat over the long term.
- Wheat production growth to 2015/16: 1.2% to 28.2mn tonnes. Australia will remain an important player in the wheat market as the fourth largest exporter in the world.
- Sugar production to 2015/16: 48.1% to 5.3mn tonnes. We expect strong production on the back of industry consolidation, which should spur economies of scale and boost output.
- 2012 real GDP growth: 1.6% (down from 1.8% in 2011; predicted to average 2.5% from 2011 to 2016).
- 2012 central bank policy rate (average): 3.5% (Down from 4.75% in 2011).
Industry Developments
2011 has been a year of significant consolidation in the Australian sugar industry, and BMI believes that this will trend will remain in play over the medium term. The most recent development is a deal between Australia's largest sugar miller Sucrogen, which is owned by Singapore-based Wilmar, and Proserpine Cooperative Sugar Milling Association, the country's fifth largest sugar company. After receiving approval from the Queensland Supreme Court on December 8 to permit Sucrogen to purchase AUD65mn in debt owned by Proserpine, a majority of Proserpine creditors voted in favour of Sucrogen's offer, comprising an AUD120mn headline price plus working capital and cost adjustments. In effect, this also translates into a rejection of a counter-offer of AUD128mn by the Chinese state-owned agribusiness firm Cofco.
A vote representing about 60% of Australia's pork producers agreed on a levy increase from AUD1.35 to AUD2.25 per pig slaughtered to be paid to Australian Pork Limited (APL). The increase will occur over three tranches starting in July 2012 and will end in July 2016. The funds will be channelled to the APL to undertake marketing, research and development, and policy activities on behalf of the industry. As there has not been a levy increase since 1994, we believe that this investment into improving the industry is much needed and will help boost production methods in the pork sector, which has largely been overshadowed by the more established beef sector.
With 26 sugar factories in the country owned by 10 milling groups, BMI believes that consolidation will remain a dominant theme of the Australian sugar industry in the coming years. In particular, we foresee consolidation spearheaded by foreign companies rather than domestic firms as the industry is highly export oriented. Notably, we highlight that Cofco, which recently successfully bid for Tully Sugar, has expressed continued interest in the Australian sugar sector, and we expect to see activity to continue in the sector throughout 2012.
Product samples
A sample for this product is available. Please Login/Register to download this sample.
|
|
|
|
