Russia Agribusiness Report Q1 2013Published by: Business Monitor International Published: Nov. 14, 2012 - 85 Pages Table of Contents
AbstractBMI View: The recently adopted agriculture development programme demonstrates the Russiangovernment’s increased commitment to support the industry in spite of the recent accession to the WTO.New measures ensure that most agricultural support complies with the WTO rules, such as thetransformation of price support into income support. Russia’s grain output has been severely affected bydroughts during plantings, and the livestock and dairy industries are experiencing tighter margins as aresult. That said, we continue to see strong growth potential for production in both sectors as thelivestock industry benefits from protective measures and the dairy industry attracts foreign investment.Another Drop Wheat Production (‘000 tonnes) & Yields (tonnes/ha) (RHS) f = BMI forecast. Source: BMI, USDA Key Developments Wheat production growth to 2016/17: 18.1% to 65.1mn tonnes. Yield gains and better accessto export markets in Asia are expected to result in increased wheat production. Milk consumption growth to 2016/17: 0.3% to 12.0mn tonnes. This slight increase inconsumption will most likely be aided by increased interest in coffee, as milk is acomplementary good. Consumption of premium coffee as a niche-but-growing segment isdemonstrated by the rapid growth of domestic coffee house chains. Pork production growth to 2016/17: 20.5% to 2.4mn tonnes. Increasing efficiency in farmingmethods as investment is drawn to the sector by the potential rewards on offer will lead to gainsin production. Government measures curbing imports will also play a part. 2013 real GDP growth: 3.6% (up from 3.4% in 2012; predicted to average 3.9% over 2012-2017). Consumer price inflation: 6.6% year-on-year (y-o-y) on average in 2013 (up from 4.9% y-o-yon average in 2012). BMI universe agribusiness market value: -7.2% y-o-y increase to US$40.8bn in 2012/13,forecast to grow on average 2.7% annually between 2011/12 and 2016/17. Industry Outlook We revised down our 2012/13 forecast for Russia wheat production as dry and hot weather havecontinued to damage crops in key growing regions such as the Volga Valley, the Urals and Siberia. Wenow expect output to drop 23.8% y-o-y to 42.0mn tonnes in 2012/13, compared with a previousexpectation for output of 50.0mn tonnes. The drought is expected to slash wheat yields by almost 40% yo-y, to 1.87 tonnes/hectare (ha), according to the US Department of Agriculture, while area harvested isalso estimated to decline relative to 2011/12. The steep drop in production will leave the Russianproduction surplus at a relatively low level of 4.4mn tonnes, compared with the 10-year average of11.0mn tonnes. New investment in the dairy sector by French firm Danone is in line with the company’s objective torapidly increase its share of the country’s dairy market through acquisitions. In fact, the company’sRussian division, Unimilk, announced its purchase of a Rostov-based dairy project from grain andoilseed company OAO Aston. The project was started seven years ago, but the dairy plant has not yetbeen built; as a result, Danone will take over the whole process. Original milk processing capacity was for600 tonnes per day. This comes after Danone-Unimilk increased its stakes in two local dairies,Yekaterinburgskiy Gorodskoy Molochny Zavod, based in the central city of Ekaterinburg, andKingisepp Dairy, based in north-western Russia. The acquisition processes were started before Danonetook over Unimilk in 2010 and is part of the company’s objective to take over more national brands aswell as to strengthen its offering of formula milk products on the Russian market. Egypt’s resumption of rice exports after a four-year ban will adversely impact US and Russia rice exportsto the Middle East and North Africa region. Both countries had filled in the gap for lower Egyptianexports in recent years. The decision of the Egyptian trade minister to resume rice exports is linked to abumper crop expected in 2012/13 as well as to strong stocks. The country indicated it could export asmuch as 1mn tonnes of rice in the coming year. Get full details about this report >> |
|
|
|
About MarketResearch.com
|
||
|
|
On the WEB
1/17/2013 - 32