Report Published: "Greece Agribusiness Report Q2 2014"

Falling sugar prices and uncertainty over the domestic industry's capacity to compete lead us to take a pessimistic view of this segment of the Greek agriculture sector. Grains are expected to benefit both in demand and supply terms from an uptick we see taking place in consumer spending as the economy returns to tentative growth. We expect to see poultry output the biggest beneficiary of cheaper feed grain prices and this is also the only livestock category for which we forecast substantial demand growth. After several lean years, higher farmgate prices will make for a friendlier climate for milk producers although domestic demand for liquid milk will continue to slide. Cheese is expected to be the standout commodity with exports the main driver of growth.

Key Forecasts

* Pork consumption to 2018: up 2.0% to 296,000 tonnes. Only marginal growth is expected as any recovery in household expenditure will be gradual.
* Cheese production growth to 2018: 21.9% to 239,000 tonnes. Exports of feta will lead the way in keeping the dairy segment a going concern.
* 2014 real GDP growth: 1.1% (up from -4.0% in 2013; expected to grow by 1.8% in 2015).
* 2014 consumer price inflation: -0.4% (up from -0.9% in 2013).
* BMI universe agribusiness market value: 8.2% year-on-year decline to US$2.31bn in 2014; forecast to grow by 2.0% in 2015.

Full Report Details at
- http://www.fastmr.com/prod/782526_greece_agribusiness_report_q2_2014.aspx?afid=301

Key Changes to Forecasts

* Sugar production growth to 2017/18: -18.1% to 335,600 tonnes. Down from a previous forecast of 620,000 tonnes. After increasing acreages dramatically in 2012/13, sugar growers have scaled back production for 2013/14 to 2011/12 levels, in response to lower prices and perhaps also uncertainty over the effects of the end to quotas in 2017.

Industry Developments

In January 2014 the EC issued 'reasoned opinions' to Greece and three other member states (Belgium, Cyprus and France) requiring them to enforce full legislation on housing of pregnant sows or face referral to the Court of Justice. This follows the final warnings issued by the EC in March 2013 to nine countries, including Greece, threatening legal proceedings if they neglected to take action to implement the ban on sow stalls.

A disagreement over feta is among the obstacles to be overcome before the EU and US put pen to paper on the far-reaching Transatlantic Trade and Investment Partnership (TTIP). The EU is expected to insist that makers of the cheese in specified regions of Greece, along with the manufacturers of many other such regionally-specific protected products, will have exclusive rights to the name 'feta'. US producers of cheeses currently labelled as 'feta' have objected to the EU's position on the grounds of free trade.

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