France Agribusiness Report Q1 2013Published by: Business Monitor International Published: Nov. 14, 2012 - 71 Pages Table of Contents
AbstractBMI View: We highlight that French wheat has become more competitive on export markets, mainlyowing to a decrease in competitiveness for the Black Sea region. The French livestock sector isencountering more difficulties because of a squeeze in margins. For poultry producer Doux, for example,we expect the asset liquidation and restructuring to increase efficiency in the sector over the long term. Inthe dairy segment, producers are being hit by weak economic growth in Europe, but milk prices couldhelp to support production growth in the coming years.Strong Export Capacity France – Wheat, Corn & Barley Production Balance (‘000 tonnes) f = BMI forecast. Source: Agreste, BMI Key Forecasts Barley production growth to 2016/17: 6.4% to 9.4mn tonnes. The positive figure is owing tobase effects; with barley prices remaining low relative to wheat and intervention buying ending,production is likely to fall in year-on-year terms for most of our 2012-2017 forecast period. Milk consumption growth to 2016/17: -3.6% to 5.5mn tonnes. Elevated farmgate milk pricesvery likely have discouraged consumers from buying milk, especially given the recent period ofslow economic growth. We expect this decline in consumption to continue, with more milkbeing used for other products and exported rather than being consumed domestically. Pork production growth to 2016/17: -2.3% to 1.9mn tonnes. Farmers liquidated part of theirherds because of liquidity constraints on the back of high feed prices. Also, the application ofEU welfare standards will hurt uncompetitive producers in the short term. 2013 real GDP growth: 0.6% (up from -0.2% in 2012). Consumer price inflation: 1.4% annual average in 2013 (slightly down from 2.2% in 2012). BMI universe agribusiness market value: 0.4% year-on-year (y-o-y) decline to US$47.7bnin 2012/13. Industry Outlook A recent French experiment on the effects of genetically modified (GM) foods and pesticides has madeanti-GM protesters more vocal on the potential dangers of the crops. The experiment, conducted bybiologist Gilles-Eric Séralini from the University of Caen, studied the effect of feeding rats withherbicide-resistant GM corn or corn treated with the herbicide Roundup, on a large scale (200 animals)and over the long term (two years). The results showed that all the groups fed with either GM corn,Roundup-treated corn or both, presented liver or kidney failures after one year (1.3-5.5 times morefrequent than for the control group). Also, 80% of males and 70% of females in the tested groups diedprematurely. The study noted that there was no degree of proportionality between the doses of GMorganisms and herbicides administered to the rats and the effects observed, which is often true whenhormonal cycles are disrupted. Our view that France-based poultry group Doux would avoid bankruptcy has played out well Indeed, thecommerce tribunal in Quimper, France, recently organised the takeover of most of the company’s freshdivision production sites. The group was placed under compulsory liquidation in June, and thegovernment was put under pressure by syndicates to save as many jobs as possible in the process. Five ofDoux’s eight sites have already received offers from French poultry groups LDC, Glon Sanders andDuc. Doux will only keep one of these as part of its continuation plan. The offers will protect about 715jobs out of the group’s total 1,692. Other parts of the group are still being investigated by the tribunal, andoffers were expected to follow in subsequent coming months, with November 30 set as the deadline fornegotiations. French food manufacturer Danone has turned to the Chinese and Indian markets as the EU tightens ruleson advertising the health benefits of food, according to Business Week. Asian marketing laws are lessrestrictive than in Europe, where Danone had to withdraw claims in 2010 that its Actimel probioticyoghurt boosted the immune system, as this claim was not medically proven. The global market forprobiotic foods is predicted to grow 51% by 2016, reaching US$42bn in value, with the Asia-Pacificregion worth US$18bn and Western Europe generating US$11bn. Get full details about this report >> |
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