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Italy Agribusiness Report Q3 2012
Business Monitor International, June 2012, Pages: 58
The Italy 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 Italy's agribusiness service.
BMI View: Despite general dry weather conditions in Europe, Italy's grains production should rebound slightly in 2012/13. This will make the country less dependent on imports, especially thanks to high stocks and moderating consumption on the back of a bleak economic outlook. For dairy and livestock, farmers' margins are still being squeezed, especially as subdued growth in consumers' income discourage consumption of value added or more costly products like cheese and beef. However, the country still has tremendous export opportunities.
- Wheat production growth to 2015/16: 5.9% to 6.9mn tonnes Production should rise as prices stay elevated, driven by growing demand for food and biofuels. Production of cellulosic ethanol, of which Italy is soon set to become a world leader, should also help to boost wheat production.
- Cheese consumption growth to 2015/16: 17.8% to reach 1.7mn tonnesIn contrast to fluid milk, Italian per capita cheese consumption at 28.1kg is on a par with France and Germany and higher than Northern European countries such as Sweden and the UK.
- Poultry production growth to 2015/16: 17.8% to 1.4mn tonnes Poultry is a relatively cheap meat and as such can expect continued strong demand in a tough economic climate.
- 2012f real GDP growth: -1.4% ave (down from 0.7% in 2011)
- 2012f Consumer price index: 1.7% ave (up from 2.9% in 2011)
- BMI universe agribusiness market value: 3.8% year-on-year (y-o-y) decline to US$17.5bn in 2011/12, forecast to grow on average 3.5% annually between 2010/11 and 2015/16.
Industry Outlook Strong wheat stocks in Italy will reduce import needs in the coming months. In fact, local industry sources have reported that imports of wheat and corn from the country, traditionally a major grain buyer in Europe, were smaller in January-February compared to the same period in 2011. Imports of soft wheat increased by 17.0% to 689,270 tonnes in January-February, while corn imports dropped 29.0% to 387,632 tonnes and durum wheat fell 46.4% to 196,165 tonnes. Apart from high stocks, the decrease can be explained by lower demand as well as bad weather in Ukraine, the country's largest supplier, which hindered grain sales.
We have revised down our forecast for production in 2012/13 because farmers are expected to plant less rice that year. We now forecast production to fall 2.9% to 1.56mn tonnes as area is expected to fall from 247,000 hectares (ha) in 2011/12 to 238,000 tonnes in 2012/13. On the contrary, the country's wheat and corn areas are meant to rise about 15.0% and 2.0% respectively. Our forecast is based on a high yield of 6.5tonne/ha based on better technologies in the rice fields. However, the USDA's forecasts imply a 4.2tonnes/ha yield on lower investment in the crop and if these assumptions were to be validated, we would revise down our forecast in the coming months.
The recent decision by the Directorate-General for Health and Consumers of the European Commission to lift the ban on chicken meat imported from Thailand should not affect local Italian producers as they are focused on the fresh chicken market, and are protected by strict marketing standards.
Executive Summary 5
SWOT Analysis 7
Italy Agriculture Swot 7
Italy Business Environment SWOT 8
Supply Demand Analysis 9
Italy Grains Outlook 9
Table: Italy Wheat Production, Consumption & Trade 10
Table: Italy Corn Production, Consumption & Trade 10
Table: Italy Barley Production, Consumption & Trade 10
Table: Italy Wheat Production, Consumption & Trade 12
Table: Italy Corn Production, Consumption & Trade 13
Table: Italy Barley Production, Consumption & Trade 13
Italy Rice Outlook 13
Table: Italy Rice Production, Consumption & Trade 14
Table: Italy Rice Production, Consumption & Trade 15
Italy Dairy Outlook 15
Table: Italy Milk Production, Consumption & Trade 16
Table: Italy Butter Production, Consumption & Trade 17
Table: Italy Cheese Production, Consumption & Trade 17
Table: Italy Milk Production, Consumption & Trade 19
Table: Italy Butter Production, Consumption & Trade 19
Table: Italy Cheese Production, Consumption & Trade 19
Italy Livestock Outlook 20
Table: Italy Poultry Production, Consumption & Trade 21
Table: Italy Pork Production, Consumption & Trade 21
Table: Italy Beef & Veal Production, Consumption & Trade 22
Table: Italy Poultry Production, Consumption & Trade 24
Table: Italy Pork Production, Consumption & Trade 25
Table: Italy Beef & Veal Production, Consumption & Trade 25
Commodity Price Analysis 26
Monthly Softs Update 26
Cocoa: Signs Of Life 27
Coffee: Holding Key Support 29
Palm Oil: Uptrend Intact 31
Sugar: Watching Brazilian Yields 32
Cotton: Downside Risks 34
Select Commodities - Performance & BMI Forecasts 35
Monthly Grains Update 36
Wheat: Upside Risks Materialising 37
Corn: Moderation In Place 39
Soybean: Looking Weak 41
Rice: Temporary Strength 43
Commodity Performance 43
Upstream Analysis 44
GM & Europe: Growth In Plantings Restricted But Imports To Pick Up 44
EMEA Machinery: Emerging Europe Has Strong Potential 48
Country Snapshot: Italy Demographic Data 51
Italy's Population By Age Group, 1990-2020 ('000) 52
Italy's Population By Age Group, 1990-2020 (% of total) 52
Italy's Key Population Ratios, 1990-2020 53
Italy's Rural And Urban Population, 1990-2020 54
Our Forecast Modelling
How We Generate Our Industry Forecasts 55