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Spain Agribusiness Report Q2 2009Published by: Business Monitor International Published: Apr. 24, 2009 - 47 Pages Table of Contents
AbstractBMI's Spain Agribusiness Report Q209 continues on the themes touched upon in the previous publicationas the Spanish farming industry seeks to become more competitive in line with the demands of anincreasingly affluent population. As the global economic recession continues apace, the Spanish economyis set to feel the effects of shrinking tourism expenditure, while the agricultural sector needs to becomemore efficient in line with the EU's Common Agricultural Policy (CAP) health checks. If this fails to takeplace adequately, the economy is at risk of becoming more import-based, to the detriment of localproducers, potentially leading many farmers to leave the industry in favour of urban employment.The local livestock industry is well-developed, particularly in pork production where EU ascension hascontributed to Spain gaining cutting edge technology, thus enabling a strong and vertically integratedsector second only to Germany in terms of output. Processed products account for the vast majority ofdomestic demand for pig meat and consumers seem prepared to pay relatively high prices for quality localproduce, such as Serrano ham. We predict pork to show the largest production gains over the outlookperiod with a 7.1% expansion between 2009 and 2013. Consumption is also predicted to outpace thegrowth recorded between 2004 and 2008, as expansion accelerates during the latter stages of the outlookin light of waning recessionary effects. 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 may also 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 CAP reforms are the most likely threat to domestic agricultural production due to the highdependence of farmers on generous EU support such as export subsidies and import controls. The threatof more efficient producers flooding the EU with cheaper food may come as a welcome tonic toconsumers, but it is foreseeable that many producers may be forced to either drastically alter productionmethods or cease production altogether. At the same time, the increasingly health-conscious consumptionhabits of Western European citizens may lead to a greater focus on quality and organic produce, helpingsome producers regain profitability. 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. Spain is already the top organic producer in the EU, an avenue that could also befocused on in future. Get Full Details About This Report >> |
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