Saudi Arabia Agribusiness Industry Update Quarter 3 2012

  • May 2014
  • -
  • Business Monitor International
  • -
  • 73 pages

Includes 3 FREE quarterly updates

BMI View: While wheat production is projection to decline in 2012/13, we now expect the fall to be less severe owing to limited grains exports. However, we believe the government will go ahead with its plan to phase out wheat production altogether in the next decade. For dairy, we continue to see great growth opportunities for industry players operating in the segment, with moderating milk prices boosting margins and increased investment helping to support production. For livestock, the country is very reliant on poultry imports, and slow growth in domestic production has kept prices high.

Key Projections
- Wheat production growth to 2015/16: -46.9% to 669,900 tonnes. Wheat production will continue to decrease in the coming years on the back of the government's program to phase out production.
- Poultry consumption growth to 2016: 17.2% to 1.6mn tonnes. Demand growth will be supported by population growth and rising personal incomes.
- Milk production growth to 2015/16: 17.2% to 2.1mn tonnes. High milk prices and rising demand will help to drive output. We also highlight that this growth is from a low base; the country's dairy market and capacity is still negligible and has significant room to grow over the coming years.
- 2012 real Gross Domestic Product growth: 4.6% year-on-year (y-o-y), down from 6.8% in 2011. Predicted to average 4.0% from 2011 to 2016.
- 2012 consumer price inflation: 4.9% average, down from 5.0% 2011. - BMI universe agribusiness industry value: 1.3% y-o-y increase to US Dollar 2.2bn in 2011/12, projection to increase by 3.6% on average per year between 2010/11 and 2015/16. Market Outlook The US Department of Agriculture projections total wheat imports to reach 2.5mn tonnes in 2012/13, of which 1.8mn tonnes will be imported for human consumption. The country's grain purchase agency normally issues tenders for 14% and 12.5% protein content wheat from the EU, Canada, the US and Australia. However, the agency has occasionally received some high-quality wheat shipments from Brazil, Argentina, Latvia and Lithuania. Since 2011/12, Saudi Arabia's animal feed processors have been importing feed-quality wheat with up to 11% protein content, especially from Ukraine.
We have highlighted Saudi Arabia's Almarai as one of the strongest performing major industry players in the Gulf food and drink space over the past few years. It has a very strong dairy business and has taken some positive steps to diversify both in terms of geography and business categories. It looks well placed to continue growing domestically, in the wider Gulf region and further out into the Middle East and North Africa. Almarai grew its headline revenues by nearly 15% in 2011, a strong result in what could have been a challenging year.
Poultry prices in Saudi Arabia have significantly risen in the past year and are expected to stay elevated in the medium term. This is owing to insufficient production growth in the country as well as declining output from major producers such as France and Brazil, from which the country's poultry imports come.
Also, local poultry farmers have complained of increasing production costs linked to high feed costs.

Table Of Contents

Executive Summary . 5
Industry SWOT Analysis . 7
Saudi Arabia Agriculture Swot .. 7
Saudi Arabia Political Environment and Risk Analysis ... 8
Saudi Arabia Economic Environment and Risk Analysis . 9
Saudi Arabia Business Environment SWOT .. 9
Supply Demand Analysis .. 10
Saudi Arabia Livestock Outlook 10
Data : Saudi Arabia Poultry Production and Consumption ... 11
Data : Saudi Arabia Poultry Production and Consumption ... 12
Saudi Arabia Grains Outlook 13
Data : Saudi Arabia Wheat Production and Consumption, from 2011 to 2016 .. 14
Data : Saudi Arabia Corn Production and Consumption, from 2011 to 2016 14
Data : Saudi Arabia Barley Production and Consumption, from 2011 to 2016 .. 14
Data : Saudi Arabia Wheat Production and Consumption, from 2008 to 2012 .. 18
Data : Saudi Arabia Corn Production and Consumption, from 2008 to 2012 18
Data : Saudi Arabia Barley Production and Consumption, from 2008 to 2012 .. 18
Saudi Arabia Dairy Outlook . 19
Data : Saudi Arabia Milk Production and Consumption, from 2011 to 2016 . 20
Data : Saudi Arabia Butter Production and Consumption, from 2011 to 2016 .. 20
Data : Saudi Arabia Cheese Production and Consumption, from 2011 to 2016 . 20
Data : Saudi Arabia Milk Production and Consumption 23
Data : Saudi Arabia Butter Production and Consumption . 23
Data : Saudi Arabia Cheese Production and Consumption 24
Company Profiles ... 25
Saudi Dairy and Food Stuffs Firms 25
Commodity Price Analysis 28
Monthly Softs Update 28
Cocoa - All Eyes On The Mid-Crop . 29
Coffee - Brazil Leads Improved Supply 31
Palm Oil - Strong Demand To Support Prices . 33
Sugar - Surplus Finally Dragging Prices Lower .. 35
Cotton - Finding A Base .. 37
Select Grains and Softs: Performance and BMI Projections 39
Monthly Grains Update 40
Corn: Moving Towards Support .. 40
Soybean: Overstretched ... 41
Wheat: Downtrend Remains In Place .. 42
Rice: Temporary Strength 43
Economic Outlook .. 44
Data : Saudi Arabia - Economic Activity, from 2011 to 2016 .. 46
Downstream Analysis 47
Food.. 50
Data : Food Consumption Indicators - Historical Data and Projections .. 50
Data : Confectionery Value Sales - Historical Data and Projections ... 51
Mass Grocery Retail . 52
Data : Mass Grocery Retail Sales - Historical Data and Projections ... 53
Data : Mass Grocery Retail Sales By Format .. 53
Data : Trade Indicators - Historical Data and Projections ... 54
World Food and Drink View ... 55
Food and Drink Roundup ... 55
Food Inflation Less Of An Issue In 2012 .. 55
Domestic Demand Uncertainties Abound In Developed Industries 56
EM-Oriented Firms To Perform Strongly 58
Data : Core Views ... 65
Country Snapshot: Saudi Arabia Demographic Data . 66

Section I : Population ... 66
Data : Demographic Indicators, 2005-2030 66
Data : Rural/Urban Breakdown, 2005-2030 ... 67

Section II : Education And Healthcare .. 67
Data : Education, from 2003 to 2005 .. 67
Data : Vital Statistics, 2005-2030 67

Section III : Labour Industry And Spending Power .. 68
Data : Employment Indicators, 1999-2006 .. 68
Data : Consumer Expenditure, from 2000 to 2012 (US$) 68
BMI Projection Modelling . 69
How We Generate Our Market Projections ... 69

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