Central America Agribusiness Industry Update Quarter 4 2011

  • October 2013
  • -
  • Business Monitor International
  • -
  • 137 pages

BMI View: Adverse weather conditions during the 2009/10 and 2010/11 harvest years have led to shortages of corn, which is a staple for many families in Central America, particularly for rural subsistence farmers. Consequently, domestic prices have soared, putting pressure on many poorer families. By June 2011, corn prices had increased by 56% year on year (y-o-y) in Guatemala and 112% in El Salvador. In Guatemala, the price of the staple tortilla was up by 33% y-o-y. This steep increase has led the UN Food and Agriculture Organisation (FAO) to express concern over the impact of high corn prices on the region's food security. The increase in food prices has been pushing up inflation across the region. In Guatemala, inflation stood at 7.63% y-o-y in August 2011, prompting the Monetary Board of Guatemala to increase the leading interest rate by 50 basis points to 5.50%. The increase follows a previous rise in the leading interest rate from 4.75% to 5.00% in July 2011. El Salvador, Honduras, Nicaragua and Panama have also seen an uptick in inflation, to which increases in food prices have contributed.

Key Projections
.. In 2010/11, sugar production is projection to shrink by 3.0% y-o-y to 4.39mn tonnes. This is primarily due to storm damage the region in September 2010, most notably in Guatemala, by far the region's largest producer, where output is projection to decline by 3.0%. Output in Costa Rica is projection to drop by 13.8% y-o-y, owing to adverse weather conditions and rat infestations. Over the longer term, however, we see the region's sugar production rising, as production techniques become more efficient. We currently see output growing by 7.3% y-o-y in 2011/12, to 4.71mn tonnes, with Guatemala, Nicaragua and Costa Rica all set to see strong growth in output. To 2014/15, BMI projections sugar production growth in Central America of 14.5% on 2009/10 levels, with growth linked to improving sugar prices.
.. The 2011/12 harvest promises to be a stronger year for grain producers as rainfall has been good during the planting season and high prices have encouraged production. We currently see output growing by 3.8% y-o-y to reach 3.31mn tonnes. Out to 2014/15, BMI projections corn production growth in Central America of 17.5% on 2009/10 levels. However, as recent years have demonstrated, Central American producers are being forced to contend with increasingly extreme and erratic weather conditions, which could cause further significant crop damage in the future.
.. With coffee prices remaining high in 2010/11, we projection that increase in demand will be relatively slow across the region, and see consumption growing by 1.8% y-o-y to 1.21mn bags. Out to 2015, we projection demand growth for the coffee segment in Central America increasing by 16.1% on 2010 levels to 1.38mn bags. Central American Gross Domestic Product per capita, from a very low base, is projection to rise at a substantial rate with the subsequent positive implications for private consumption. Regional Gross Domestic Product growth is set to average around 3% annually with regional Gross Domestic Product per capita expected to jump by more than 100% during the decade to come.
.. Pork consumption has been boosted by the improving quality of domestic pork production and investment in advertising by the Chamber of Swine Producers. Out to 2015, consumption is projection to continue growing rapidly at 25.9% on the 2010 level for the region as a whole. Growth is projection to be strongest in Honduras and Panama, at 37.5% and 43.7% respectively, while in Guatemala increase in demand is expected to be much slower at 8.0% on the 2010 level.

Key Trends And Developments
.. In the year up to August 2011, Nicaraguan beef exports stood at US Dollar 277mn and with current levels of growth, the year-end total could reach around US Dollar 450mn, up by more than 40% from US311.6mn in 2010. In late August 2011, the International Development Bank (IDB) announced that it would provide funding for the National Cattle Traceability Programme to establish a registration programme for livestock farms and to provide identification tools to trace 900,000 head of cattle. The news will provide a further boost for the export segment as it will help smalland medium-scale farmers to meet the sanitary requirements to export livestock.
.. Despite high coffee exports in 2010/11, BMI cautions that exports could be constrained in 2011/12, as ending stocks for 2010/11 are set to stand at a record low of 319,000 bags, 22.5% lower than the four-year average of 412,000 bags. Production is projection to remain relatively subdued, with y-o-y increase of 2.0%. This is likely to contribute to a global supply deficit, as Brazil enters the 'off-year' for arabica production and output in Colombia, Indonesia and Vietnam are also projection to remain subdued. We therefore see coffee prices remaining high, fuelled by the tightening of supply. Any decrease in exports in volume terms should, therefore, be compensated in terms of value. In the medium term, however, we see coffee prices moderating at around US¢200/lb as the 2012/13 crop comes on line.
.. A growing number of coffee farmers in Costa Rica are setting up their own micro-processing plants in a bid to serve international buyers directly, according to an article in the local newspaper La Nación. Figures from the Instituto del Café de Costa Rica (Icafé) revealed that the number of processing plants has increased to 161 in 2011 from 94 recorded plants in 2010. The establishment of micro processing plants allows small coffee farmers to sell directly to roasters on the international industry by skipping exporters. Information from Icafé reveals that the microprocessing plants are enabling farmers to receive up to US Dollar 100 more per quintal (46 kilos) of processed coffee.
.. In September 2011, the Nicaraguan government announced that it would authorise the import of 1,150 tonnes of poultry duty-free. The move came in response to the unilateral decision by poultry distributors to increase the price of chicken from NIO2.15 per kilo to NIO2.44 without the government's backing. The increase came despite a previous pledge by the segment to keep prices stable until December 2011. Poultry producers argue that the price rise is necessary as a result of the spiralling cost of yellow corn that is used as poultry feed. However, the government has taken the move to permit tariff-free imports to avoid further price hikes for consumers.

Table Of Contents

Industry SWOT Analysis .... 8
Central America Agricultural SWOT .... 8
Supply Demand Analysis .. 9
Central America Grains Outlook 9
Data : Costa Rica, Guatemala, Honduras, Nicaragua, Panama, El Salvador Corn Production, Consumption and Trade . 10
Data : Costa Rica, Guatemala, Honduras, Nicaragua, Panama, El Salvador Corn Production, Consumption and Trade . 13
Central American Coffee Outlook .. 15
Data : Costa Rica, Guatemala, Honduras, Nicaragua, El Salvador Coffee Production, Consumption and Trade .... 17
Data : Costa Rica, Guatemala, Honduras, Nicaragua, El Salvador Coffee Production, Consumption and Trade .... 22
Central America Livestock Outlook .... 24
Data : Costa Rica, Guatemala, Honduras, Nicaragua, El Salvador Beef and Veal Production, Consumption and Trade 26
Data : Guatemala, Honduras, Panama, El Salvador Pork Production, Consumption and Trade .... 26
Data : Guatemala Poultry Production, Consumption and Trade ... 27
Data : Costa Rica, Guatemala, Honduras, Nicaragua, El Salvador Beef and Veal Production, Consumption and Trade 30
Data : Guatemala, Honduras, Panama, El Salvador Pork Production, Consumption and Trade .... 30
Data : Guatemala Poultry Production, Consumption and Trade ... 31
Central America Sugar Outlook 33
Data : Belize, Costa Rica, Guatemala, Honduras, Nicaragua, Panama, El Salvador Sugar Production, Consumption and Trade ... 33
Data : Belize, Costa Rica, Guatemala, Honduras, Nicaragua, Panama, El Salvador Sugar Production, Consumption and Trade ... 36
Commodity Price Analysis .... 39
Monthly Grains Update .. 39
Corn .. 39
Rice ... 40
Soybean . 41
Wheat 42
Monthly Softs Update . 43
Cocoa 43
Coffee 44
Palm Oil 45
Sugar 46
BMI Projection Modelling ... 47
How We Generate Our Market Projections ... 47

View This Report »

Find all the market research you need - instantly, in one place.

+1.2 Million Research Documents & Statistics +200,000 Trusted Public Sources 350 Industries With Global Coverage

24/7 Customer Support

Talk to Louis

+1 718 618 4302

Purchase Reports From Reputable Market Research Publishers

The Hot Beverages Market in the Global Market (30 countries)

The Hot Beverages Market in the Global Market (30 countries)

  • $ 3 265
  • Industry report
  • September 2014
  • by FFT

** The Hot Beverages Market, Global (30 countries) ** Market demand for years 2008, 2012, 2013 and forecasts for years 2014, 2015 and 2016. Company market shares and brands for 2014 and continuously updated. ...

Global Hot Drinks Market 2014-2018

Global Hot Drinks Market 2014-2018

  • $ 2 500
  • Industry report
  • August 2014
  • by Infiniti Research Limited

About the Hot Drinks Market The Global Hot Drinks market comprises coffee, tea, and other hot drinks. The demand for hot tea is highly driven by the aging population owing to its health benefits, whereas, ...

Instant Coffee: Versatility and Convenience Drive Growth

Instant Coffee: Versatility and Convenience Drive Growth

  • $ 1 995
  • Industry report
  • June 2014
  • by Euromonitor International

Although fresh coffee dominates the overall coffee industry, instant coffee continues to gain share, thanks in large to its appeal amongst new coffee drinkers. The convenience, versatility, and branded ...


ReportLinker is an award-winning market research solution that finds, filters and organizes the latest industry data so you get all the market research you need - quickly, in one place.