New Market Research Report: Saudi Arabia Agribusiness Report Q3 2013

Saudi Arabia will increasingly be dependent on global grain supply, as the country has decided to phase out domestic grain production in a bid to preserve the country's water supply. The government has not abandoned its strategy of self-sufficiency in poultry and has been ramping up incentives to expand capacity production. This strategy has paid off, as the three major producers in the sector have all started heavy investment initiatives. We believe Saudi Arabia will find sufficient grain supply from the Black Sea region and the EU to supply its meat and food processing industry in the coming years. However, the country will remain highly vulnerable to volatile grain and feed prices. Recent spikes in feed prices have turned us more cautious on margins for dairy and livestock producers in the country, especially those that import inputs from abroad.

Key Forecasts

* Wheat production growth to 2016/17: -56.3% to 487,900 tonnes. Wheat production will continue to decrease in the coming years on the back of the government's programme to phase out production.
* Corn consumption growth to 2017: 30.5% to 2.7mn tonnes. Corn consumption will mainly be driven by the strong growth of the poultry sector, as corn is a major feed ingredient.
* Poultry production growth to 2016/17: 50.0% to 885,000 tonnes. This spectacular growth will mainly come from expansion of the three major poultry farms (Al-Watania, Al-Fakieh and Almarai), along with continuous government support.
* BMI universe agribusiness market value: US$2.2bn in 2013, forecast to increase by 6.3% on average per year between 2012 and 2017.
* 2013 real GDP growth: 4.1% year-on-year (y-o-y), down from 6.8% in 2012, projected to average 3.4% from 2012 to 2017.
* 2013 consumer price inflation: 4.5% average, same than in 2012, projected to average 4.5% from 2012 to 2017.

Full Report Details at
- http://www.fastmr.com/prod/596888_saudi_arabia_agribusiness_report_q3_2013.aspx?afid=301

Key Revisions To Forecasts

* 2012/13 wheat production forecast revised down, to 800,000 tonnes (compared with a previous forecast of 1.0mn tonnes). Output is being phased out as a faster pace than expected.

Industry Developments

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