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Spain Agribusiness Report Q3 2009Published by: Business Monitor International Published: Jul. 10, 2009 - 53 Pages Table of Contents
AbstractThe Spain Agribusiness Report Q309 looks at the domestic farming industry during a global recessionthat shows little sign of abating. For a country boasting nearly a third arable land, agriculture in Spain is,according to sources, diminishing both in terms of GDP (3.5%) and labour force participation (4%). Theservices-based industry is by far the country's top employment sector; yet in a response to the slowdown,it has been among the worst affected, particularly in the tourism subsector as belt-tightening consumerscurtail their holidays in the sun. As such, efforts to promote agricultural development have stepped up inthe hope that Spain can capitalise on strong export promise.The pork industry is one of the sectors where growth has taken off considerably and it has shownconsiderable strength over the last 20 years, attributable to such factors as EU-entry, closer ties betweenfeed sellers and livestock producers, and changing consumption habits. In addition to feeding locals, BMIsees the export market becoming progressively pertinent to the considerations of Spanish pork producers.Exports almost doubled in the two-year period to 2008, to 1.255mn tonnes, while notable pork consumingnations, including China, will provide ample opportunities for strong revenue growth, as its own industrytakes the weight of rapid population expansion and increased urbanisation. While raw pork exports will comprise the bulk of foreign trade, there exists considerable potential forvalue-added sales via increased marketing and exposure of regionally processed pork; chorizo and avariety of cured and seasoned hams - including Serrano or Iberico varieties - are presently consumedmainly in Spain, although these niche products are becoming increasingly popular across a progressivelycosmopolitan continent. Processed pork currently represents a paltry 5% of entire Spanish pork exports,underpinning our view that such goods will play a larger role in future pork production decisions- andhelp drive pork output growth of 7.1% in the four year period ending in 2013. Spain's pig traders' association, Ancoporc, believes that rising feed costs will contribute towards a furtheryear-on-year (y-o-y) reduction of the country's already shrinking pig herd by a couple of percentagepoints in 2009, which, while it is likely, is not deemed to stunt overall industry growth and productivitygains. Despite a positive outlook for the consumption of sugar-based products, overall sugar consumption is setto continue on a downward trajectory, which has been the trend witnessed in the preceding outlookwindow. The prevalence of public health consciousness is likely to lead an increasingly conscious publicto look for sugar substitutes. Additionally, consumers could well forego the consumption of refined whitesugar on breakfast cereals or in hot beverages, as a means of lowering intake. We forecast consumption todiminish by 0.6% to 1.34mn tonnes by the end of the projection period. Production is set to fall by almost50% as support measures are removed and a host of players leave the industry. The grains industry looks particularly promising through to 2013, with all three categories covered in ouroutlook forecast significant double digit production growth. Barley in particular is predicted a staggeringfive year growth rate of 81.72% as the less moisture dependent plant is seen to exhibit greater yieldconsistency than corn or wheat. However, the latter mentioned crops will also benefit as producers look toraise export revenues to pick up the slack from reduced output from other EU countries suffering fromreduced subsidies. At a time when domestic producers are likely to face increasing competition from foreign entities, webelieve that the diversity of Spanish agriculture may provide the industry with the chance to gain valuablerevenues through the marketing of regionally branded value-added produce, which are sure to be popularin foreign countries. As well as the produce covered in our outlook, the nation is a top producer of olives,grapes (Spain has a flourishing wine industry) and tomatoes, while the country is the top organic producerin the EU and will be sure to earn favourable revenues when ethical consumers regain the financial abilityto support their moral convictions. Get Full Details About This Report >> |
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