"Venezuela Agribusiness Report Q2 2013" Published

Our outlook for Venezuela's agricultural sector is cautious given the country's uncertain political and economic outlook. The country has significant growth potential, but the government's policies of expropriation have seen production of key crops decline and a growing reliance on imports. Although the poultry section, for example, is well integrated, arable production and cash crops such as cocoa or coffee have been poorly managed. Following the death of president Hugo Chavez, we anticipate a new presidential election within months and believe that interim president Nicolas Maduro of the ruling Partido Socialista Unido de Venezuela will win and will continue the interventionist policies of Chavez's era. However, we believe the pace of reforms may be more moderate and see significant potential for economic growth over our forecast period. This will, however, be dependent on the improvement of infrastructure and the adoption of more market-friendly policies.

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Full Report Details at
- http://www.fastmr.com/prod/584579_venezuela_agribusiness_report_q2_2013.aspx?afid=301
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Key Forecasts

* Corn production growth to 2017: 45.7% to 2.04mn tonnes. Despite ongoing challenges including a lack of fertiliser and low profitability, we believe that corn output will expand strongly on the low 2012 levels.
* Coffee consumption growth to 2017: 4.7% to 1.38mn bags. After surging by 48.3% from 2007-2012 owing to a steep rise in imports, our demand forecast for the coming five years is more moderate.
* Poultry production growth to 2017: 4.0% to 697,000 tonnes. Although the poultry sector is well organised and efficient, production growth is constrained by high input costs and the state-controlled price regime, which is squeezing profitability.
* BMI universe agribusiness market value: US$4.61bn in 2013 (down from US$4.68bn in 2012; forecast to grow annually by 1.7% on average to 2017).
* 2013 real GDP growth: 2.6% (down from 5.6% in 2012; forecast to grow annually by 3.4% on average between 2012 and 2017).
* 2013 consumer price index: 30.0% year-on-year (y-o-y) (up from 20.1% in 2012; forecast to grow annually by 22.9% on average between 2012 and 2017).
* 2013 central bank policy rate: 15.5% (up from 15.0% in 2012; forecast to increase to 16.5% in 2014).

Key Revisions To Forecasts

* Corn consumption in 2012/13 revised up by 10.8% to 3.80mn tonnes. While consumption is forecast to decline in y-o-y terms, we have revised up our outlook due to an increase in demand from the livestock sector.
* Poultry consumption in 2012/13 revised down by 2.1% to 867,000 tonnes. Consumption is expected to fall due to high costs.

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