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Venezuela Agribusiness Report Q3 2009Published by: Business Monitor International Published: Jul. 10, 2009 - 51 Pages Table of Contents
AbstractIn BMI's Venezuela Agribusiness Report for Q3 2009 we introduce the new Livestock Outlook. As withmost industrial sectors in Venezuela, livestock production has been profoundly affected by PresidentHugo Chavez' Bolivarian Revolution. Strong growth in meat production in the early years of the decadewas brought to a swift halt by the sharp recession in 2002 and 2003. Hopes of a quick recovery for thesector were dashed by the imposition of government price controls on food staples, including meat, in aneffort to improve the living standards of the country's poor.The price controls and a return to strong economic growth saw demand for meat quickly recover to prerecessionlevels. Meat production, however, has lagged far behind. Producers forced to sell at thegovernment-mandated level have struggled to turn a profit. This has been a major disincentive toinvestment in the livestock sector. Investment has been further discouraged by the threat of seizure andnationalisation by the government. Livestock farmers' difficulties were compounded by the rapid rise in feed costs through 2007 and 2008. In2007 alone, beef production fell by 23.3% year-on-year (y-o-y) as established farmers left the businessand new government-backed collectives struggled to get started. While production has been falling,demand for beef rose ever higher as oil-fuelled growth saw incomes rise. This has made Venezuela evermore reliant on beef imports, whcih rose from 2,000 tonnes in 2000 to 320,000 tonnes in 2008. While therecession in Venezuela will see imports fall this year and next, the move from self-sufficiency to a majornet importer in only a few years shows the crisis beef production is in. Unless Chavez can work a miraclewith the new collective farms or farmers are allowed to make a profit without the fear of land seizures,the outlook for beef production over the next few years looks bleak. Venezuela's modern poultry production sector has fared better than beef over the last few years. Growth,however, has also been held back by the price controls. In 2008, production was still well below the levelseen in 2002 before the recession and price controls took their toll. In 2009, with feed costs still high, weexpect to see a slight decline in production. Things are also looking fairly bleak for Venezuela's coffee growers this year. Coffee production has alsobeen hit by price controls and rising input costs. In 2009, heavy rains have exacerbated an already pooroutlook for the year's harvest. We now forecast production to fall 14.9% y-o-y to 851,000 bags. The lowoutturn could see Venezuela, once one of the world's leading coffee producers, being forced to importcoffee to meet domestic demand. Get Full Details About This Report >> |
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