Spain Agribusiness Report Q4 2012
Business Monitor International, October 2012, Pages: 101
The Spain 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 Spain's agribusiness service.
BMI View:
Severe droughts, combined with the highly discouraging macroeconomic environment and weak consumer spending, is proving to be a major dampener for agribusiness growth in Spain in 2012/13. We are currently expecting wheat, barley and milk production to suffer the most in the short term. However, medium-to-long-term prospects look favourable for corn, processed dairy and pork segments.
Market Movers:
EU-27 – Ethanol Production By Country In 2010 (%)
Source: US Energy Information Association
Key Forecasts:
- Wheat production to 2015/16: -4.1% to 6.62mn tonnes. Although we believe adverse weather conditions this year will not be repeated, production will be able to grow only modestly over our forecast period to 2015/16.
- Cheese consumption to 2015/16: 19.5% to 417,400 tonnes. Traditionally, cheese was consumed most during social occasions in Spain. It is now becoming increasingly popular and a household staple.
- Pork production to 2015/16: 6.7% to 3.7mn tonnes. We note that two new EU directives on swine farming are likely to force some less efficient producers to leave the industry in the run-up to 2013.
- 2012 GDP growth: -2.1% (from 0.8% growth in 2011)
- 2012 consumer price index: 1.4% annual average (from 2.3% in 2011)
- BMI universe agribusiness market value: 9.4% year-on-year (y-o-y) decline to US$12.1bn in 2012/13, forecast to decline an average 3% y-o-y between 2012/13 and 2015/16.
Industry Developments:
Spain and Portugal joined hands with Poland and Lithuania to request the European Commission to intervene in the region’s dairy market and help stabilise it. In September 2012, the members called for a temporary reintroduction of export refunds for milk and milk products as well as the revision of reference prices for butter and skimmed milk powder. Meanwhile, the Spanish Ministry of Agriculture is reportedly looking at ways to rebalance the value chain of milk and milk products, with the view of helping farmers deal with the increasing costs of feed. Efforts are also being made to launch a campaign to control the quality of bulk milk sold in the country.
In the same month, Spanish MEP Esther Herranz García called for EU policymakers to maintain sugar quotas until 2020 to give beet growers more time to adapt to trading in an open global market. The region of Castilla y León, which accounts for 84% of sugar produced in Spain, had previously encouraged the central government to modify the current proposals for CAP reform in order to keep sugar quotas beyond 2015.
We expect pork supply in Europe to tighten significantly in the coming years and have revised our outlook for production in the EU on the back of recent data from Eurostat showing the pig population declining in 2011. We now forecast pork production in the EU-27 to fall by 2.0% and 1.0% in 2012 and 2013 respectively. The recent surge in grain prices, especially for wheat, corn and barley, which are used in the EU for feed, is putting significant pressure on farmers’ margins. This is especially the case as retail pork prices have not increased by much in recent months, while global lean hog prices declined by 17.4%
in one day in August on the back of oversupply and disease concerns in the US.
Meanwhile, we see limits to the EU ethanol production capacity because the sector is dependent on feed imports and therefore will be impacted by high grain prices in the medium term. In fact, even though it would be possible for the region to grow all the feedstock needed for ethanol production, the European Commission believes that 30% of the feedstock for biofuels will have to be imported in order to reduce price pressure on the EU food market. This will make the union vulnerable to high global prices resulting from a tight global grains market in 2012/13. Even though we expect global grain supply to loosen slightly in the coming months, we forecast prices to remain high by historical standards, which will limit the EU’s biofuels production capacity.
Executive Summary 5
SWOT Analysis 7
Spain Agriculture SWOT 7
Spain Business Environment SWOT 8
Supply & Demand Analysis 9
Spain Dairy Outlook 9
Table: Spain Milk Production & Consumption, 2011-2016 10
Table: Spain Butter Production & Consumption, 2011-2016 10
Table: Spain Cheese Production & Consumption, 2011-2016 10
Table: Spain Milk Production & Consumption, 2008-2012 13
Table: Spain Butter Production & Consumption, 2008-2012 14
Table: Spain Cheese Production & Consumption, 2008-2012 14
Spain Sugar Outlook 14
Table: Spain Sugar Production & Consumption, 2011-2016 15
Table: Spain Sugar Production & Consumption, 2008-2012 18
Spain Livestock Outlook 19
Table: Spain Poultry Production & Consumption, 2011-2016 20
Table: Spain Pork Production & Consumption, 2011-2016 20
Table: Spain Beef & Veal Production & Consumption, 2011-2016 20
Table: Spain Poultry Production & Consumption, 2008-2012 26
Table: Spain Pork Production & Consumption, 2008-2012 26
Table: Spain Beef & Veal Production & Consumption, 2008-2012 26
Spain Grains Outlook 27
Table: Spain Wheat Production & Consumption, 2011-2016 28
Table: Spain Corn Production & Consumption, 2011-2016 28
Table: Spain Barley Production & Consumption, 2011-2016 28
Table: Spain Wheat Production & Consumption, 2008-2012 35
Table: Spain Corn Production & Consumption, 2008-2012 36
Table: Spain Barley Production & Consumption, 2008-2012 36
Commodity Price Analysis 37
Monthly Softs Update 37
Cocoa: Momentum Waning 38
Coffee: Temporary Rally 39
Cotton: Forming A Base 41
Palm Oil: Underperforming The Complex 42
Sugar: Scope For A Moderate Rebound 44
Table: Select Commodities: Performance & Forecasts 46
Monthly Grains Update 47
Wheat: Little Relief From Southern Hemisphere 48
Corn: Looking The Weakest 49
Soybean: Prices To Stay Relatively Supported 51
Rice: Still The Underperformer 53
Table: Select Commodities: Performance & Forecasts 54
Upstream Analysis 55
Europe Fertiliser Outlook 55
Europe GM Outlook 60
Spain Agribusiness Report Q4 2012
© Business Monitor International Ltd
Page 4
Europe Machinery Outlook 64
Downstream Analysis 68
Food 68
Food Consumption 68
Table: Food Consumption Indicators – Historical Data & Forecasts, 2009-2016 69
Canned Food/Prepared Food 69
Table: Canned Food Value/Volume Sales – Historical Data & Forecasts, 2009-2016 69
Confectionery 70
Table: Confectionery Value/Volume Sales – Historical Data & Forecasts, 2009-2016 70
Frozen Vegetables 71
Table: Frozen Vegetables, 2009-2016 71
Baked Goods 71
Table: Baked Goods & Jam, 2009-2016 71
Pasta 74
Table: Pasta, 2009-2016 74
Meat And Fish 75
Table: Meat, 2009-2016 76
Table: Fish, 2009-2016 77
Oils & Fats 78
Table: Oils & Fats, 2009-2016 78
Dairy 82
Table: Dairy, 2009-2016 82
Drink 86
Hot Drinks 86
Table: Hot Drinks, 2009-2016 86
Soft Drinks 87
Table: Soft Drink Value/Volume Sales – Historical Data & Forecasts, 2009-2016 88
Alcoholic Drinks 89
Table: Alcoholic Drinks, 2009-2016 89
Mass Grocery Retail 91
Table: Mass Grocery Retail Sales By Format – Historical Data & Forecasts, 2009-2016 92
Table: Grocery Retail Sales By Format (%) 92
Trade 93
Table: Food & Drink Trade Balance – Historical Data & Forecasts, 2009-2016 93
Country Snapshot 94
Table: Spain’s Population By Age Group, 1990-2020 (‘000) 95
Table: Spain’s Population By Age Group, 1990-2020 (% of total) 96
Table: Spain’s Key Population Ratios, 1990-2020 97
Table: Spain’s Rural And Urban Population, 1990-2020 97
Our Forecast Modelling
98
How We Generate Our Industry Forecasts 98
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