Transcript 09 AGINFO 2016 Agri

Absa AgriBusiness
Agri outlook
Presented By
Ernst Janovsky
29 September 2016
Disclaimer: Although everything has been done to ensure the accuracy of the information, the Bank takes no
responsibility for actions or losses that might occur due to the usage of this information.
World commodity prices to move sideways
Two commodity price shifts over the past 60 years ended by two economic crises
> 4% world GDP
growth
Industrialisation
Slow recovery surplus capacity
Slow
recovery
Surplus
capacity
> 4% world
GDP growth
(Capitalism)
Energy crisis
Iraq / Iran
Financial
crisis
Fall of Communism as economic
system in the world Berlin wall
‘98 / Hong Kong ‘99
2
SA’s Economic Competitiveness Agri to become export driven to survive
3
World growth in population shows signs of slowdown
4
World per capita demand for food to reach a plateau
5
Agricultural production opportunity
6
Water is the key for economic development !
7
SA’s Climatic trends – forecasts looks better
8
Technology to reshape production and demand trends - Adapt or Die
Technology to reshape Companies and Countries
•
Education gap to shrink (cheaper & best in class)
•
Work skill competition to increase (Middle class to exceed 3,5
billion in 2050 )
•
Technology to change where food will be produced (vertical vs.
horizontal) and will also change food production processes
•
Companies to deliver personalized value to individuals
•
Marketing to move to one to one
•
Changing companies to become proactive
9
World maize production, trade and price trends
10
Domestic maize outlook
11
World soyabean production, trade and price trends
12
Domestic oilseed trends
13
World wheat production, trade and price trends
14
Domestic wheat outlook
15
World sugar consumption, production, trade and price trends
16
Domestic sugar outlook
17
World Orange consumption, production and trade trends
18
Domestic orange outlook
19
Domestic grapefruit outlook
20
Domestic lemon outlook
21
Domestic soft citrus outlook
22
Where does our meat for export heading?
23
World poultry production, consumption and trade terns
24
Domestic poultry production outlook
25
Domestic poultry price outlook
26
Domestic beef production and herd trends
27
International Beef trade
28
Domestic beef price trends
29
Chop as feedlot energy source is losing its ground and new
energy sources needs to be developed
30
Mutton outlook
31
Fibre trends
32
Domestic wool price expectations
33
World dairy production and price trends
34
Domestic dairy outlook
35
Land price trends
1.
2.
3.
Growth in fix asset prices
expected to slow down due to:
• Lower net farm income growth
due to drought
• A weakening debt to fix asset
ratio hampering access to
credit
• Unfriendly land reform policies
creating uncertainties
• Expected increase in interest
rate making investors more
careful
Net farm income to improve after
the effect of lower volumes due to
drought
this
is
further
complemented
by
expected
increases in commodity prices due
to a expected further weakening in
the exchange rate
Agricultural Input cost to continue
to grow faster than inflation due to
a weakening of the rand
36
Thank you for the opportunity to share a few ideas
Any Questions
Authors
Ernst Janovsky
Wessel Lemmer
Karabo Takadi
Julie Hayward
Disclaimer: Although everything has been done to ensure the accuracy of the information, the Bank takes no
responsibility for actions or losses that might occur due to the usage of this information.
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