New Market Research Report: India Agribusiness Report Q3 2013

From: Fast Market Research, Inc.
Published: Mon May 20 2013

We hold a positive view on India agribusiness sector, as the country will remain an agricultural powerhouse and is likely to be able to maintain high levels of self-sufficiency for major food crops. Production growth of various commodities will be driven by strong government support and robust demand growth for manufactured foodstuffs. We see significant growth opportunities in sub-sectors such as dairy, coffee and livestock. However, India will be increasingly vulnerable to exceptional weather phenomena owing to climate change effects and serious water shortages. Moreover, the country will remain prone to erratic government intervention, which seriously hampers its reputation as an international provider. As such, we see the partial liberalisation of the sugar industry as a first positive step that will incentivise production growth and investment in the sector.

Key Forecasts

* Coffee production growth to 2016/17: 15.6% to 6.8mn 60kg bags. Strong growth will be driven by major export potential, government support, the expansion of cultivated area and India's robust coffee consumption growth.
* Palm oil consumption growth to 2017: 35.1% to 9.6mn tonnes. Domestic palm oil consumption will be propelled by strong demand for domestic food use, which makes up about 80% of total domestic palm oil demand.
* Milk production to 2016/17: 24.1% to 151.5mn tonnes. Growth will be driven by the improvements in breeding techniques, robust expansion of domestic consumption and increasing dairy prices, which will renew interest in dairy production as a commercial activity.
* BMI universe agribusiness market value: US$226.5bn in 2013 (up from US$226.0bn in 2012; forecast to grow annually by 3.0% on average to 2017).
* 2013 real GDP growth: 5.5% (up from 5.0% in 2012; predicted to average 6.0% from 2012 to 2017).
* 2013 consumer price inflation: 7.0% (down from 8.1% in 2012; forecast to average 5.6% from 2012 to 2017).
* 2013 central bank policy rate: 7.25% average (down from 7.50% in 2012; forecast to average 7.13% from 2012 to 2017).

Full Report Details at

Key Revisions To Forecasts

* Sugar production in 2013/14 revised down, to 24.5mn tonnes (compared with a previous forecast of 25.5mn tonnes). Drought conditions in key producing states Maharashtra and Karnataka are hampering the output recovery after lower rainfall in 2012.
* Wheat production in 2013/14 forecast revised down, to 90.6mn tonnes (compared with a previous forecast of 94.8mn tonnes). This is due to lower-than-expected area harvested.

Industry Developments

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