Turkey Agribusiness Report Q1 2013Published by: Business Monitor International Published: Nov. 14, 2012 - 85 Pages Table of Contents
AbstractBMI View: We are below consensus for grains production, as we believe the country will be affected bydroughts during plantings. Therefore, we expect Turkey’s export capacity for wheat flour to be limited inthe coming months. More investment in the poultry sector confirms our view for the sub-sector to have themost growth potential over the medium term. We are still cautious about the country’s sugar sector, aswe believe production quotas and high prices are affecting the industry’s efficiency. Only changes tothese factors could make it easier for confectionery manufacturers to operate in their domestic market.Inflation Picking Up Food & Non-Alcoholic Beverages Prices (% chg y-o-y) Source: Bloomberg, Turkish Statistics Institute Key Forecasts Wheat production growth to 2016/17: -8.1% to 20.0mn tonnes. The decline over the 2011/12to 2016/17 period is owing to base effects. Growth between 2012/13 and 2016/17 will be drivenby farmers’ preference for wheat due to its good profitability and high domestic demand. Also,the development of the wheat flour milling industry will boost production growth. Poultry consumption growth to 2016/17: 11.3% to 1.5mn tonnes. This strong demand growthwill be driven by increasing disposable incomes and the rise of fast-food chains and higher-endeateries providing poultry dishes. Sugar production growth to 2016/17: 16.6% to 2.7mn tonnes. Growth will be supported byslight improvements in industry efficiency, as reform efforts filter through and risk appetitereturns to private investors, leading to improved equipment and production methods. However,we caution that this growth outlook could change if sector reforms are not aggressively pursued. 2013 real GDP growth: 4.7%, up from 3.0% in 2012. Consumer price inflation: 6.6% on average in 2013, down from 8.8% on average in 2012. BMI universe agribusiness market value: 7.6% year-on-year (y-o-y) decrease to US$20.4bnin 2012/13, forecast to increase by an annual average of 2.1% between 2010/11 and 2015/16. Key Developments We are below consensus for grains production in Turkey in 2012/13, as we believe official figures fromthe Turkish Statistical Institute underestimate weather problems during plantings. For wheat, we haverevised down our forecast to 17.0mn tonnes, which represents a 22.1% y-o-y decline. For barley, weforecast production to decrease 21.1% y-o-y to 5.6mn tonnes in 2012/13 owing to dry weather conditionsin spring and the long duration of cold temperatures in winter. We forecast corn production to increase by14.3% y-o-y to 4.8mn tonnes in 2012/13 because of a more significant increase in plantings and lesssevere droughts during plantings. Aviagen-owned poultry firm Ross Breeders Anadolu announced it will step up production capacity inTurkey with the commissioning of a new hatchery. The new hatchery, located in Elmadag, will includesetters, hatchers and a hatchery information system, which are aimed at improving productivity at thecompany’s hatchery. The company is expected to more than double annual day-old breeder chickproduction for its domestic market, taking total capacity to 13mn per year. Turkey’s biggest candy maker, Ulker Biskuvi Sanayi, whose parent company Yildiz Holding purchasedparts of Godiva from Campbell Soup in 2007, has established a US$200mn loan from Bank of AmericaMerrill Lynch to finance its business. The company said it would offer a 340-basis-point margin overinternational benchmarks for the two-year loans. Get full details about this report >> |
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