Pakistan Agribusiness Industry Update Quarter 4 2011

  • August 2014
  • -
  • Business Monitor International
  • -
  • 104 pages

BMI View: Pakistan's agricultural output has steadily declined in its contribution to Gross Domestic Product in the past decade, down from 24.0% in 2000/01 to 20.9% in 2010/11. That said, the segment still remains a government priority as the country deals with issues of food security and is particularly vulnerable to natural disasters. Over the long term, we foresee the dairy, poultry and wheat markets as benefiting the most from increased investment. However, we believe that vast improvements in infrastructure and better supply chains will have to be implemented before we can begin to get bullish towards the Pakistani agriculture segment 's growth prospects.
Key Trends:
- Rice production out to 2014/15: 5.4% to 7.2mn tonnes. We expect the country to increase its share in the basmati rice trade as production grow s over our projection period.
- Milk consumption out to 2015: 14.2% to 17.8mn tonnes. Consumption growth will be driven by rising incomes and population growth, as well as increased access to good-quality milk.
- Sugar consumption out to 2015: 14.0% to 5.0mn tonnes. Large-scale consumers such as confectioners, candy makers and soft drink manufacturers account for about 60% of the total sugar demand and will be the main drivers of growth.
- 2011 Real Gross Domestic Product Growth: 2.4% (down from 3.8% y-o-y in 2010; projection to average 3.2% from 2010 to 2015).
- Consumer Price Inflation: 13.9% average in 2011 (up from 11.7% in 2010).
- Central Bank Policy Rate: 14.0% (higher than 2011 at 12.5%)

Industry Developments
In July, domestic chicken prices increased 53.5% month-to-month to PKR165. This is because the mortality rate for poultry stocks were higher than expected and more than 50% of the country's chicken was smuggled to Afghanistan, Iran and other neighbouring countries. This has created tightness on the domestic industry, but has also pushed poultry prices far higher than much of the local population can afford.
The better-than-expected sugar outturn for 2010/11 has led to expectations of reduced imports this year. The state-run Trading Corporation of Pakistan reportedly has ample supplies of the sweetener and government officials have expressed that there is no intention to import sugar until November 2011, when harvest from the next crop starts coming online. These dynamics also contribute to our view for sugar prices to remain subdued in the medium term.
Pakistani dairy wholesalers and retailers have been allowed to sell milk at PKR55 (US Dollar 0.65) and PKR60 respectively from April 2011 onwards. This is in response to higher international milk prices. This is the second milk price hike in a relatively short period of time. In March, dairy farmers had increased the price by PKR10. However, according to The International News, the decision was withdrawn during a meeting with the District Coordination Officer of Karachi, Muhammad Hussain Syed, who is also the controller of general prices.

Table Of Contents

Executive Summary 5
Industry SWOT Analysis 7
Pakistan Agricultural SWOT 7
Pakistan Political Environment and Risk Analysis .. 8
Pakistan Economic Environment and Risk Analysis 9
Pakistan Business Environment SWOT ... 10

Market Projection Scenario ... 11
Pakistan Rice Outlook.. 11
Data : Pakistan - Rice Production, Consumption and Trade 11
Data : Pakistan - Rice Production, Consumption and Trade 14
Pakistan Livestock Outlook .. 15
Data : Pakistan - Poultry Production and Consumption ... 16
Data : Pakistan - Beef and Veal Production and Consumption ... 16
Data : Pakistan - Poultry Production and Consumption ... 18
Data : Pakistan - Beef and Veal Production and Consumption ... 18
Pakistan Dairy Outlook .. 19
Data : Pakistan - Milk Production and Consumption ... 19
Data : Pakistan - Butter Production and Consumption 20
Data : Pakistan - Milk Production and Consumption ... 21
Data : Pakistan - Butter Production and Consumption. 21
Pakistan Sugar Outlook .. 23
Data : Pakistan - Sugar Production, Consumption and Trade ... 24
Data : Pakistan - Sugar Production, Consumption and Trade ... 25
Pakistan Grains Outlook .. 26
Data : Pakistan - Wheat Production, Consumption and Trade .. 28
Data : Pakistan - Corn Production, Consumption and Trade ... 28
Data : Pakistan - Barley Production, Consumption and Trade .. 28
Data : Pakistan - Sorghum Production, Consumption and Trade .. 29
Data : Pakistan - Wheat Production, Consumption and Trade .. 30
Data : Pakistan - Corn Production, Consumption and Trade ... 30
Data : Pakistan - Barley Production, Consumption and Trade .. 30
Data : Pakistan - Sorghum Production, Consumption and Trade .. 31
Commodity Price Analysis 32
Monthly Grain Update . 32
Corn 32
Rice . 33
Soybean .. 34
Wheat .. 35
Monthly Softs Update ... 36
Cocoa.. 36
Coffee.. 37
Palm Oil . 38
Sugar .. 39
Downstream Supply Chain Analysis 40

Market Projection Scenario .. 40
Consumer Outlook .. 40
Food. 43
Food Consumption .. 43
Data : Pakistan Food Consumption Indicators -- Historical Data and Projections, from 2008 to 2015 ... 44
Canned Food .. 44
Data : Pakistan Food Categories - Value/Volume Sales -- Historical Data and Projections, from 2008 to 2015 . 45
Mass Grocery Retail ... 46
Data : Pakistan MGR Value Sales by Format -- Historical Data and Projections, from 2008 to 2015 . 46
Data : Grocery Retail Sales by Format -- Historical Data and Projections .. 46
Trade .. 47
Economic Outlook . 48
Data : Pakistan - Economic Activity, from 2008 to 2015 50
Industry Trend Analysis ... 51
Carbonates Leading Soft Drinks Growth 51
Data : Pakistan Soft Drink Sales Breakdown - Historical Data... 52
Data : Pakistan Soft Drink Sales Breakdown - BMI Projections, from 2009 to 2015 . 55
BMI Projection Modelling 56
How We Generate Our Market Projections .. 56

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