Research and Markets: South Africa Agribusiness Report Q2 2009

• Press Release
• Source: Research and Markets
• On 1:08 pm EST, Tuesday November 10, 2009

DUBLIN--(BUSINESS WIRE)--Research and Markets (http://www.researchandmarkets.com/research/7e1a42/south_africa_agrib) has announced the addition of the "South Africa Agribusiness Report Q2 2009" report to their offering.

South Africa Agribusiness service provides proprietary medium term price forecasts for key commodities, including corn, wheat, rice, sugar, cocoa, coffee, soy and milk; in addition to newly-researched competitive intelligence on leading agribusiness producers, traders and suppliers; in-depth analysis of latest industry developments; and essential industry context on South Africa's agribusiness service.

Despite its diminishing contribution to overall GDP, agriculture remains paramount to economic prosperity in South Africa, employing nearly a third of the population. The authors publish their South Africa Agribusiness Report Q209 against a backdrop of global recession and an increasingly tight supply and demand chain. The new Business Environment Overview is introduced as a concise yet comprehensive look at industry fundamentals and as a complementary supplement to the main forecasts.

Since the end of apartheid in the 1990s, the local government has made agricultural productivity a priority. The highly regulated nature of the industry has gradually been replaced by a more liberal entity, where subsidies and other notable price supports have been ousted, in favour of more natural market dynamics. This has seen the country emerge as a major agricultural producer and exporter, self-sufficient in the majority of food staples, while competitive in international markets.

South Africa's agricultural season runs counter-cyclical to that witnessed in the Northern Hemisphere, allowing it to facilitate timely exports to EU and US markets. However, from the commodities covered in the outlook the only good with robust export demand is sugar, where South Africa has well developed capabilities and is one of the world's foremost suppliers. We forecast production to average year-on-year (y-o-y) growth of 8.7% through to 2013, regardless of lower-than-average prices on the global market. Prices have begun to strengthen of late, helped by notable shortfalls in major producers such as India and Brazil. Furthermore, farmers in many countries have began to neglect sugar plantings in favour of seemingly more profitable crops, which we believe will enable South African farmers to increase their global market share.

Grains are forecast to show strong supply and demand growth throughout the outlook period, with sorghum and barley posting the largest production gains of 21.81% and 26.67% respectively between 2009 and 2013. Consumption is destined to mirror such growth which suggests that higher consumer incomes are likely to fuel demand for local beers and malt drinks. Corn is the most widely produced crop with 13mn tonnes harvested in 2008. We foresee such a massive harvest unlikely to be repeated over the next few years, although output is likely to pick up in 2010 following a pronounced reduction in 2009. In addition to traditional exports, the region's more niche products may prove to be more popular among health conscious consumers at home and abroad. Rooibos red tea, ostrich meat and biltong are examples of local fair that are becoming increasingly desirable throughout the world.

A potential caveat to a particularly optimistic outlook may be reflected by the structure of local farming. The industry is classified as exhibiting typical dual economy characteristics; a local subsistence sector juxtaposed with a well developed commercial sector. The fact that large-scale commercial farming is controlled by a white minority will do little to quell the unrest of the majority population who characterise small-scale and subsistence production. Increasingly, capital intensive production is likely to prevail, while the jobs in labour intensive farming become obsolete, potentially resulting in growing unemployment and civil unrest; racial tension is never far from the surface.

Key Topics Covered:

• Executive Summary
• SWOT Analysis
• Industry Business Environment Overview
• Economic Outlook
• Sub-sector Supply & Demand Analysis
• Commodity Price Forecasts
• Competitive Landscape
• Forecast Modelling

For more information visit http://www.researchandmarkets.com/research/7e1a42/south_africa_agrib

Research and Markets
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