Today: March 30, 2017, 2:40 pm

Market Report, "Colombia Agribusiness Report Q2 2014", published

New Food research report from Business Monitor International is now available from Fast Market Research 2014-03-27 13:24:09
Colombia's agricultural sector will face a number of challenges in the medium term. Key export crops - such as coffee and cocoa - have underperformed in recent years owing to a lack of investment in infrastructure and outbreaks of disease. Although regeneration work is under way, it will take time to bear fruit. The strength of the Colombian peso against the US dollar is also posing challenges for the agribusiness sector, as the competitiveness of Colombia's exports is being eroded. Finally, there is still unrest among dairy, livestock and grain producers who fear that the entry into force of the Colombia-EU free trade agreement will further erode their profitability. The Ministry of Agriculture has taken steps to support these sectors to adapt to the arrival of inexpensive imports; however, ongoing efforts to improve infrastructure and modernise production techniques will be required.

Full Report Details at
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Key Forecasts

* Sugar consumption growth to 2018: 6.7% to 2.1mn tonnes. This will mainly be driven by increases in the consumption of confectionery products as per capita incomes and young population rise. * * Poultry production growth to 2017/18: 10.2% to 1.26mn tonnes. The consolidation of the sector will accelerate in the coming years after poultry producers experienced difficult conditions over recent years, including soaring feed prices and sluggish demand. * * Coffee production growth to 2017/18: 13.9% to 11.3mn tonnes. Production will be aided by programmes to replace aging plantations and improve resistance to disease. However, we remain cautious about the long-term trajectory of Colombian coffee production, especially with prices currently low and given the strong Colombian peso. * * BMI universe agribusiness market value: US$14.0bn in 2014; down from US$14.2bn in 2013. Growth expected to average 4.2% annually between 2014 and 2018. * * 2014 real GDP growth: 4.5%; up from 4.3% in 2013. Forecast to average 4.6% from 2014 to 2018. * * 2014 consumer price index: 3.1%; up from 2.0% in 2013. Forecast to average 3.4% from 2014 to 2018. * * 2014 central bank policy rate (average): 3.75%; up from 3.25% in 2013. Forecast to average 4.55% from 2014 to 2018.

Key Revisions To Forecasts

* 2013/14 coffee production forecast revised up, to 10.5mn 60kg bags (compared with a previous forecast of 9.4mn bags), as favourable weather and the first harvest of new higher-yielding trees boosted output in the last six months of the season.

Industry Developments

Dairy farmers in Colombia took part in the widespread protests in August-September 2013 that were initiated by small-scale farmers throughout Colombia. The trade agreement with the United States immediately abolished tariffs on 70% of agricultural imports and phases them out for remaining products. Farmers also protested against soaring land prices and the government crackdown against 'unregistered' (ie unpatented) seeds. Dairy farmers in particular also voiced concerns about milk being smuggled into Colombia from neighbouring Venezuela and Ecuador and sold at lower prices, undercutting Colombian milk producers. Following negotiations between the protestors and the government, the latter has agreed to eliminate the 3,000 tonne quota for whey protein dairy products originating from countries that do not have an ongoing FTA with Colombia.

Colombia's coffee sector is seeing the results of improved weather and the first harvest of disease-resistant trees replanted as part of a programme initiated in 2010. Coffee output soared in 2013, averaging 907,000 bags monthly, compared with 645,000 bags on average in 2012. Between October 2013, the first month of the 2013/14 season, and January 2014, production reached 4.3mn bags, up 34.1% y-o-y. Production reached 1.1mn bags in November and December 2013, the highest monthly level since 2010. Exports have also recovered strongly in recent months, with weakness in the Colombian peso and a marketing push towards untraditional export markets supporting shipments abroad.

The expected opening of the first Starbucks coffee shop in Bogota in 2014 highlights the success of Fedecafe's goal to increase consumption. The company plans on opening six shops in 2014, and mentioned in August 2013 it could have as many as 50 shops in five years. The stores will be operated through a joint venture between Alsea SAB and Grupo Nutresa SA, and will sell locally sourced and roasted coffee. In Colombia, Starbucks will compete with chains such as Juan Valdez, whose parent company Procafecol SA was created in 2002 by the Colombian Coffee Growers Federation.

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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

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Press Information

Published by
Bill Thompson

# 863 Words
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