Romania Agribusiness Industry Update Quarter 3 2012

  • June 2014
  • -
  • Business Monitor International
  • -
  • 118 pages

Includes 3 FREE quarterly updates

BMI View: We maintain our cautious outlook for a recovery in the Romanian agricultural market in 2012 on the back of continued weakness in private consumption and supply-related issues. Freezing temperatures and dry ground are threatening crops, and poor investment management is holding the market back. Over the longer term, however, we hold a relatively positive outlook on the Romanian consumer, largely owing to the country's large population and low base effects. We expect the poultry and dairy segments to be particularly well placed to benefit from these dynamics over our projection period to 2016.
Key Projections - Milk consumption growth to 2016: 9.6% to 5.5mn tonnes. Milk consumption, projection to reach 16kg per capita by 2016, will still be starkly lower than the European average of 75kg per capita, suggesting much more room for consumption upside.
- Wheat production growth to 2015/16: 18.8% to 8.5mn tonnes. Growth will be buoyed by EU agricultural subsidies, foreign investment and increased plantings in response to higher prices.
- Pork production growth to 2015/16: 11.5% to 282,600 tonnes. The lifting of a ban on pork exports to the EU poses upside risks to this growth outlook.
- 2012 Gross Domestic Product growth: 1.0% (down from 2.5% in 2011) - 2012 end-year consumer price inflation: 3.3% (down from 8.0% in 2011) Key Market Developments In May 2012, new health minister Vasile Cepoi revealed the government's plans to introduce a fast-food tax in Romania in order to supplement incomes in the health care system and also help to curb health problems. The idea was first floated by the government in February 2010 but was delayed. If implemented, the tax will put downside pressure on our already cautious outlook for sugar demand in the country. Indeed, our core scenario for the sugar market envisages consumption slowly declining as greater awareness about health issues encourages people to seek healthier alternatives to high-sugar and high-fat foods.
In the same month, the directorate-general for health and consumers of the European Commission decided to lift the ban on chicken meat imported from Thailand. The ban had been effective since 2004 in response to the outbreak of avian flu in Asia. We do not expect the lifting of the ban to affect local producers, as they are focused on the fresh chicken industry and are protected by strict industry ing standards. The entry of Thai poultry products on the EU industry could decrease Brazilian and Argentine firms ' industry share of the EU's non-fresh chicken industry, which they have been dominating since 2004.
In February 2012, Romanian dairy producer Covalact opened a Euros 1.1mn logistics centre in Sfantu Gheorghe. The firm plans to spend a further Euros 4mn over the coming years to boost capacity and launch new products. In December 2011 Israeli dairy producer Tnuva pulled out of the country after having invested Euros 60mn in its business there. Tnuva had intended to use Romania as one of its launch pads for international expansion, establishing a system from milk production through distribution under the Tnuva and Yoplait labels. While Covalact's investment can be viewed positively and its timing perhaps more fortuitous than Tnuva's, it is nevertheless much less significant compared with the Israeli firm 's original investment. The demise of Tnuva's Romanian story perhaps points to a business environment that still holds pitfalls for the foreign investor.

Table Of Contents

Executive Summary . 5
Industry SWOT Analysis . 7
Romania Agriculture Swot . 7
Romania Business Environment SWOT . 8
Supply Demand Analysis 9
Romania Grains Outlook 9
Romania Wheat Production and Consumption, from 2011 to 2016 10
Romania Corn Production and Consumption, from 2011 to 2016 .. 10
Romania Barley Production and Consumption, from 2011 to 2016 10
Romania Wheat Production and Consumption, from 2008 to 2012 14
Romania Corn Production and Consumption, from 2008 to 2012 .. 15
Romania Barley Production and Consumption, from 2008 to 2012 15
Romania Dairy Outlook 15
Romania Milk Production and Consumption, from 2011 to 2016 ... 16
Romania Butter Production and Consumption, from 2011 to 2016 16
Romania Cheese Production and Consumption, from 2011 to 2016 ... 17
Romania Milk Production and Consumption, from 2008 to 2012 ... 19
Romania Butter Production and Consumption, from 2008 to 2012 20
Romania Cheese Production and Consumption, from 2008 to 2012 ... 20
Romania Livestock Outlook .. 20
Romania Poultry Production and Consumption, from 2011 to 2016 .. 22
Romania Pork Production and Consumption, from 2011 to 2016 ... 22
Romania Beef and Veal Production and Consumption, from 2011 to 2016 ... 22
Romania Poultry Production and Consumption, from 2008 to 2012 .. 27
Romania Pork Production and Consumption, from 2008 to 2012 ... 28
Romania Beef and Veal Production and Consumption, from 2008 to 2012 ... 28
Romania Sugar Outlook 28
Romania Sugar Production and Consumption, from 2011 to 2016 . 29
Romania Sugar Production and Consumption, from 2008 to 2012 . 33
Commodity Price Analysis 34
Monthly Softs Update 34
Cocoa: Signs Of Life 35
Coffee: Holding Key Support ... 37
Palm Oil: Uptrend Intact . 39
Sugar: Watching Brazilian Yields 40
Cotton: Downside Risks ... 42
Select Commodities - Performance and BMI Projections .. 43
Monthly Grains Update 44
Wheat: Upside Risks Materialising .. 45
Corn: Moderation In Place .. 47
Soybean: Looking Weak ... 49
Rice: Temporary Strength 51
Commodity Performance . 51
Economic Outlook .. 52
Data : Romania - Economic Activity, from 2011 to 2016 . 54
Downstream Analysis 55
Food.. 57
Data : Romania Food Consumption Indicators - Historical Data and Projections ... 58
Data : Value/Volume Sales of Confectionery - Historical Data and Projections .. 59
Data : Value/Volume Sales of Canned Food - Historical Data and Projections, from 2009 to 2016 60
Data : Meat, from 2009 to 2016 ... 61
Data : Jams And Jellies, from 2009 to 2016 62
Pasta . 63
Data : Pasta, from 2009 to 2016 .. 63
Baked Products . 64
Data : Snack Foods, from 2009 to 2016 .. 64
Dairy . 65
Data : Margarine, from 2009 to 2016 .. 67
Data : Dairy, from 2009 to 2016 . 68
Mass Grocery Retail . 71
Data : Romania Mass Grocery Retail - Value Sales by Format - Historical Data and Projections, from 2009 to 2016 ... 73
Data : Mass Grocery Retail By Format (%) 73
Country Snapshot: Romania Demographic Data 74
Data : Romania's Population By Age Group, 1990-2020 ('000) .. 75
Data : Romania's Population By Age Group, 1990-2020 (% of total) . 76
Data : Romania's Key Population Ratios, 1990-2020 .. 77
Data : Romania's Rural And Urban Population, 1990-2020 ... 77
BMI Projection Modelling . 78
How We Generate Our Market Projections ... 78
World Food and Drink View . 81
Food and Drink Roundup 81
Food Inflation Less Of An Issue In 2012 .. 81
Domestic Demand Uncertainties Abound In Developed Industries 82
EM-Oriented Firms To Perform Strongly 84
Data : Core Views ... 91

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