New Market Research Report: Mexico Agribusiness Report Q3 2010

July 5, 2010 - PRLog -- The Mexican agricultural sector continues to contend with the effects of the economic recession, as the country has been slower to emerge from recession than we had previously anticipated. Domestic demand has been hit as consumers tighten their purse strings and production has suffered as the rising costs of energy and transportation have also increased costs, placing further strain on the agricultural sector. The continued weakness of the peso against the US dollar has made Mexican exports more competitive, but has also presented difficulties, particularly for the livestock and dairy sectors as the cost of imported grains has risen. Some support may come from private investment: Swiss multinational Nestle has announced plans to invest US$390mn in the Mexican cocoa and coffee sectors, both of which are in dire need of modernisation. Q310 also saw the privatisation of three sugar mills, which BMI welcomes as a positive move for the sugar industry, which has the potential to improve efficiency and increase exports over our forecast period.

* Mexican nominal GDP is forecast to expand from US$876.1bn in 2009 to USbn909.8bn in 2010 and US$1,023.3 in 2011. However, GDP is still some way off the 2007 level of US$1,083.4bn.
* Per capita income is forecast to increase from US$8,146 in 2009 to US$8,393 in 2010 and US$9,368 in 2011. As with GDP, it will take some time to recover to the 2008 level of US$10,155.
* 2009/10 looks set to be a poor year for Mexican grain producers, following two successive years of strong harvests in 2007/08 and 2008/09. Corn is forecast to have fallen by 9.8% year-on-year (y-o-y) to 21.84mn tonnes from a high of 24.23mn tonnes in 2008/09. Barley production has been decimated by the dry weather, dropping by a whopping 27.7% year-on-year (y-o-y) to 586,000 tonnes, while production of sorghum is down 6.2% to 6.63mn tonnes. The 2010/11 harvest promises to be a stronger year: corn output is set to increase to 23.93mn tonnes, while Barley production is forecast to bounce back to 748,000 tonnes as yields return to a more usual level.
* The Mexican soybean harvest is forecast to fall steeply in 2009/10 owing to poor weather conditions in the main growing regions, along with a slight reduction in the area harvested. Production is forecast to drop by 23.4% y-o-y to 117,500 tonnes, down from the bumper crop of 153,300 tonnes in 2008/09.
* The dairy industry has been hit by the economic recession. Milk production is now forecast to register only slow growth of 1.9% y-o-y in 2009/10 to take output to 11.35mn tonnes. However, we see production of butter growing by 4.1% in 2009/10 after two years of successive falls as demand from the baking and confectionary sector fell off. We forecast strong growth in demand processed dairy products over our forecast period. From 2009-2014 we forecast that butter consumption will grow by 10.4% to reach 246,300 tonnes in 2014, while cheese will increase by 11.4% to reach 326,500 tonnes.
* Mexico's sugar production has been low for the second successive harvest. Output is forecast at 5.29mn tonnes, only marginally higher than the 5.26mn tonnes achieved in 2008/09 and significantly lower than the 2007/08 harvest, when production reached 5.85mn. The decline has seen Mexico's usually strong trade balance wiped out as the country has been forced to open up additional import quotas to meet domestic demand. Demand for sugar has fallen in the face of restricted supply and reduced disposable incomes. We forecast consumption to fall by 1.8% y-oy in 2009/10 to 4.97mn tonnes, down from 5.07mn in 2008/09.

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Partial Table of Contents:

Executive Summary
SWOT Analysis
- Mexico Agricultural SWOT
- Mexico Political SWOT
- Mexico Economic SWOT
- Mexico Business Environment SWOT
Industry Forecast Scenario
- Mexico Rice Outlook
- Table: Mexico - Rice Production, Consumption & Trade
- Table: Mexico - Rice Production, Consumption & Trade
- Mexico Cocoa Outlook
- Table: Mexico - Cocoa Production, Consumption & Trade
- Table: Mexico - Cocoa Production, Consumption & Trade
- Mexico Sugar Outlook
- Table: Mexico -Sugar Production, Consumption & Trade
- Table: Mexico -Sugar Production, Consumption & Trade
- Mexico Dairy Outlook
- Table: Mexico -Milk Production & Consumption
- Table: Mexico -Butter Production, Consumption & Trade
- Table: Mexico -Cheese Production, Consumption & Trade
- Table: Mexico -Whole Milk Powder Production, Consumption & Trade
- Table: Mexico -Milk Production & Consumption
- Table: Mexico -Butter Production, Consumption & Trade
- Table: Mexico Cheese Production, Consumption & Trade
- Table: Mexico -Whole Milk Powder Production, Consumption & Trade
- Mexico Livestock Outlook
- Table: Mexico -Poultry Production, Consumption & Trade
- Table: Mexico -Pork Production, Consumption & Trade
- Table: Mexico -Beef & Veal Production, Consumption & Trade
- Table: Mexico -Poultry Production, Consumption & Trade
- Table: Mexico - Pork Production, Consumption & Trade
- Table: Mexico - Beef & Veal Production, Consumption & Trade
- Mexico Grain Outlook
- Table: Mexico -Wheat Production, Consumption & Trade
- Table: Mexico -Corn Production, Consumption & Trade
- Table: Mexico -Barley Production, Consumption & Trade
- Table: Mexico -Sorghum Production, Consumption & Trade
- Table: Mexico -Wheat Production, Consumption & Trade
- Table: Mexico -Corn Production, Consumption & Trade
- Table: Mexico -Barley Production, Consumption & Trade
- Table: Mexico - Sorghum Production, Consumption & Trade
- Mexico Coffee Outlook
- Table: Mexico - Coffee Production & Consumption
- Table: Mexico - Coffee Production & Consumption
- Mexico Soybean Outlook
- Table: Mexico - Soybean Production, Consumption & Trade
- Table: Mexico - Soybean Production, Consumption & Trade
Competitive Landscape
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Full Table of Contents is available at:
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