an outlook: abundant opportunities in sa agribusiness amt conference 22 september 2010 john purchase
TRANSCRIPT
An Outlook: Abundant opportunities in SA Agribusiness
AMT Conference22 September 2010
John Purchase
Average Weekly Food Consumption
Bhutan: The Namgay family of Shingkhey
VillageFood expenditure for one week: $5.03
Chad: The Aboubakar family of BreidjingCampFood expenditure for one week: $1.23
Peter Menzel, www.menzelphoto.com
Soybean production, domestic use, net trade and prices
Average Weekly Food Consumption
Egypt: The Ahmed family of CairoFood expenditure for one week: $68.53
Ecuador: The Ayme family of TingoFood expenditure for one week: $31.55
Peter Menzel, www.menzelphoto.com
Average Weekly Food ConsumptionGermany: The Melander family of
BargteheideFood expenditure for one week: $500.07
Peter Menzel, www.menzelphoto.com
USA: The Revis family of North CarolinaFood expenditure for one week
$341.98
Global Food & Agriculture environment• Complex and diverse – subsistence to corporate
farming, basic staples to highly processed products.
• Globally markets generally work, but purchasing power & distribution problems major challenges.
• One billion out of 6 billion people chronically hungry• Food security major focus of many countries today,
especially after food price crisis of 2008.• Skewed government support and trade environment,
as well as under-investment in many cases.• Need to produce ~50% more food by 2030, and double (100% increase) food production by 2050.
The Future of Food...“Evolution of World Food Chains:
Response of Companies in Developing Countries”
Prof. Dr. Marcos Fava NevesProfessor at School of Economics and Business - University of São Paulo, Brazil
Out Topics – Future of Food1. Introduction to our Group and Style2. 1990-2010 – Exciting 20 Years of Changes3. 2010-2020 - What to Expect, How Should Companies in Developing
Countries Respond?4. What is the Role of Governments?5. Research Agenda on Food Chains for South Africa
Chapter ()
Note: 2010F and 2014F are calculated using fixed exchange rates based on the average rates of 2009 from www.oanda.com (01.01.09 to 07.12.09).
Source: IGD Research, December 2009
2006 2010F 2014F
Rank Country €bn Rank Country €bn Rank Country €bn
1 US 612 1 US 638 1 China 761
2 China 328 2 China 529 2 US 745
3 Japan 297 3 Japan 345 3 India 448
4 France 206 4 India 279 4 Japan 360
5 India 190 5 France 205 5 Russia 322
6 UK 188 6 Russia 186 6 Brazil 284
7 Germany 150 7 Brazil 185 7 France 228
8 Italy 127 8 UK 170 8 UK 198
9 Russia 116 9 Germany 160 9 Germany 168
10 Mexico 112 10 Italy 130 10 Indonesia 167
2,326 2,827 3,681
BRIC to drive Modern Retail growth
% of Population living <1.0$ pd
% of Population Undernourished
SAARF LSM Segments: Proportion of SA adult population and average monthly household
income in 2009
Source: SAARF (2010a) & BFAP, 2010
LSM class mobility: All adults during the period 2004 to 2008
Source: SAARF AMPS data for the period 2004 to 2009, as quoted by BFAP
Consumer trends• 2009 Consumer expenditure on food: R339,7bn• Supermarket phenomenon• Globally, massive move to animal protein,
impacting on grain production as well• BFAP Consumer trends: - Health and well being - Indulgence - Ethical and environmental concerns - Simplicity - Convenience
Primary Production: Performance of SectorGross Value of Production in R million
0
10000
20000
30000
40000
50000
60000
2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08
Crops Horticulture Animal products
R'm
illio
n
Source: DAFF, 2009.
Performance of Sector
0
20 000
40 000
60 000
80 000
100 000
120 000
2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08
Ra
nd
X1
00
0 0
00
Seasons
Gross and Nett Farming Income
Gross Farming Income Nett Farming Income
Source: DAFF, 2009.
Agricultural trade trends
18Source: DAFF/NAMC, 2009.
Total
-
5
10
15
20
25
2004 2005 2006 2007 2008
R b
illi
on
Year
Primary exports Primary imports Primary trade balance
Primary
-10
-5
-
5
10
15
20
25
30
35
2004 2005 2006 2007 2008
R b
illi
on
Year
Processed exports Processed imports Processed trade balance
Processed
Agricultural trade
Major agricultural products exported: (R millions)
2007 2008 2009
Wine R4 749 R6 220 R6 133
Citrus R4 322 R5 869 R5 624
Corn R226 R4 210 R3 748
Table grapes R2 570 R3 198 R3 201
Apples R2 323 R3 030 R3 074
Sugar R1 947 R1 798 R3 260
Major agricultural products imported: (R millions)
2007 2008 2009
Rice R2 130 R3 827 R3 868
Wheat R1 844 R3 668 R2 377
Soybean cake R1 479 R2 573 R2 505
Palm oil R1 380 R2 469 R1 957
Soybean oil R1 495 R2 380 R901
Whisky R1 498 R1 674 R1 699
Soybean oilcake production, consumption, net trade and prices
Source: BFAP, 2010
Soybean production, domestic use, net trade and prices
Source: BFAP, 2010
SA Meat Consumption
Source: BFAP, 2010
SA chicken production, consumption and chicken:maize price ratio
Source: BFAP, 2010
Farming Debt (X R1 000 000)
Source: DAFF, 2009.
Opportunities• Farming requisites, machinery and inputs• Financing and insurance• Technology service provision• Storage and handling• Processing• Agro-logistics• Trade and marketing services• Retail
Conclusion• Growing markets create opportunities, but
with risks and stiff competition.• Technology and scale key to
competitiveness.• Developing and developed agriculture.• South Africa has a highly diversified and
competitive agro-food industry, and a lot more credit should be afforded the industry for providing safe, nutritious and affordable food to the people of our country.
Thank you
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