Market Report, "Brazil Agribusiness Report Q3 2011", published

July 19, 2011 - PRLog -- BMI View: High prices across the agricultural commodity complex (including coffee, sugar, grains, cattle, soybean and cocoa) will provide many benefits to Brazilian farmers. However, despite maintaining its role as a global production leader, the sector will continue to confront growing pains over the medium term. Specifically, the growth in infrastructure required to move Brazil's vast quantities of produce has yet to match the growth in production itself. Consequently, issues such as port delays will continue to be a factor as production increases. This could be beneficial to domestic consumers, as farmers may choose to sell their goods domestically, reducing prices. Overall, both the domestic and international markets will provide incentives for producers and we forecast double-digit output growth across all sectors out to 2014/15.

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Full Report Details at
- http://www.fastmr.com/prod/208347_brazil_agribusiness_report_q3_2011.aspx
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Key Trends:
* Corn consumption growth to 2015: 18% to 55.6mn tonnes. This growth will largely come from livestock consumption for which corn is used as feed. Pork and poultry production are estimated to have accounted for 60% of total corn consumption in Brazil in 2010.
* Cocoa production growth to 2014/15: 30% to 301,000 tonnes. New farms in Para in the far north are boosting cocoa production in the country. Producers hope that Para's high soil quality and favourable climate will enable Para to rival Bahia as Brazil's prime cocoa producing region.
* Poultry consumption growth to 2015: 22% to 11.2mn tonnes. This will be underpinned by increasing macroeconomic growth and the subsequent rise in per capita incomes.
* 2011 Real GDP Growth: 4.5% (down from 7.5% in 2010; predicted to average 5.4% from 2010 until 2015).
* Consumer Price Inflation: 6.6% year-on-year in May 2011 (up from 5.2% y-o-y in May 2011).


Industry Developments

BMI is revising up its 2010/11 Brazilian cocoa forecasts by 6% to 230,000 tonnes, as good weather has improved yields. Although cocoa arrivals have slowed in recent weeks, production is still up 15% yearon- year. Brazil is no longer among the world's largest cocoa producers, being well behind world leaders Cote d'Ivoire and Ghana. However, government investment has been extended to the sector in recent years and the country will still play a role in determining where cocoa prices go over the medium term, particularly if production increases significantly. Although production is forecast to rebound in 2010/11 to 230,000 tonnes, Brazil remains a relatively small player in the cocoa universe. Since 1999, Brazil has averaged around 6% of global production, while ascending stars such as Ghana have gone from 9% in 2003/04 to 20% in 2010/11.

A greater area planted, good weather and the use of genetically modified (GM) seeds will allow Brazil's 2010/11 soybean harvest to come in at near record levels. Although the harvest was somewhat delayed due to wet weather, BMI is still forecasting a record crop of over 70mn tonnes. The large increase has been seen in Mato Grasso, the country's largest soybean growing state, which saw a 7% y-o-y increase in production to over 20mn tonnes. This was mainly due to an increase in yields, although planted area increased as well. Production in Parana, the second largest growing state, saw a 6.6% increase to 10mn tonnes, driven by both rising yields and a higher area planted.

The start of Brazil's down-year coffee harvest had some observers worrying that quality would become an issue amid heavy rains towards the end of La Nina. However, the weather has turned more co-operative and the crop's prospects appear to be improving. Many pickers are heading back to fields to collect beans and observers from several local co-operatives have said that the quality of the beans is exceptional due to even ripening. Although heavy rains could cause problems at this stage, there is no rain in the short-term forecast for several coffee growing regions and the harvest should remain on track. That 2011/12 is expected to be strong should help mitigate the fact that the crop is in its down-year, which is expected to tighten the coffee market even further and force global ending stocks to one of their lowest levels ever. However, the current output coming on stream should put short-term pressure on coffee prices that are already looking weak on a technical basis.About Business Monitor International

Business Monitor International (BMI) offers a comprehensive range of products and services designed to help senior executives, analysts and researchers assess and better manage operating risks, and exploit business opportunities, across 175 markets.  BMI offers three main areas of expertise: Country Risk BMI's country risk and macroeconomic forecast portfolio includes weekly financial market reports, monthly regional Monitors, and in-depth quarterly Business Forecast Reports.  Industry Analysis BMI covers a total of 17 industry verticals through a portfolio of services, including in-depth quarterly Country Forecast Reports.  View more research from Business Monitor International at http://www.fastmr.com/catalog/publishers.aspx?pubid=1010

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Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available.