Dallas, TX -- (SBWire) -- 12/05/2011 --BMI View: Another disease outbreak in the livestock sector has renewed concerns over the industry's outlook in 2011/12.
FOR IMMEDIATE RELEASE
PRLog (Press Release) - Dec 02, 2011 -
Bangladesh Agribusiness Report Q1 2012
http://www.marketreportsonline.com/139367-bangladesh-agribu.html
BMI View: Another disease outbreak in the livestock sector has renewed concerns over the industry's outlook in 2011/12. However, we believe that government intervention should prevent production from being significantly affected, and we maintain our forecast for production to grow slightly in 2011/12.
With regard to grains, we expect strong wheat, corn and rice output to help the country to mitigate the need for high levels of imports. Our expectation for this growth is linked to elevated global rice prices buoyed by the recently announced changes in Thai rice price policies, as well as strong government buffer stocks. We believe the most promising sub-sectors are rice and livestock, as they receive the most financial support and enjoy better infrastructure than other sectors in Bangladesh.
Key Views
Rice production growth: 19.6% to 40.3mn by 2015/16. The government's initiative to provide farmers with fertilizers, credit support and free electricity for irrigation should help to prevent crop losses. An 'input distribution card' will allow farmers to obtain cash subsidies for these things and help to increase their productivity.
Sugar consumption growth: 27.7% to 1.8mn tonnes by 2015/16. This will come as per capita income continues to rise on the back of strong economic growth. Furthermore, we expect soft drinks to increase in popularity on top of the consumption of traditional sweets.
Poultry production growth: 51.3% to 345,000 tonnes by 2015/16. Better economic conditions and higher disposable incomes will help drive demand for meat. Recovery of the sector should also come from better disease control.
2012 real GDP growth: 6.3%, down from 6.7% in 2011. Predicted to average 6.4% from 2011 to 2016.
2012 consumer price inflation: 10.6% year-on-year (y-o-y), up from 8.8% y-o-y in 2011. Predicted to average 7.0% from 2011 to 2016.
Key Developments
On September 16 2011, the government halved its forecast for 2011/12 rice imports, with the new expectations a result of a satisfactory domestic crop and high domestic stocks. We forecast domestic rice production to increase by 2.7 % to 34.6mn tonnes in 2011/12, with the production surplus for the year to be significant at 957,920 tonnes. This can be attributed to ideal weather conditions as well as government support boosting yields. Furthermore, government stocks are very high; the USDA estimates 2010/11 ending stocks to come in at 1.3mn tonnes, 104% higher than the 10-year average of 634,200 tonnes.
Avian flu has reared its ugly head within the poultry sector again. On April 26 2011, the Bangladeshi veterinary authority reported 31 new outbreaks of the H5N1 highly pathogenic avian influenza (HPAI) across a wide area in central Bangladesh. Overall, 180,420 birds were involved, of which 26,532 died and 153,888 were destroyed. According to the Bangladesh branch of the World Poultry Science Association, bird flu has cost the poultry industry almost BDT2bn (US$27mn) in 2011 alone. Estimates are that losses could reach as high as BDT55bn.
The Bangladeshi state grain buyer announced that the country is speeding up wheat imports in order to rebuild its reserves, taking advantage of recently moderating prices. In fact, Bangladesh issued several tenders for wheat imports in the past months and is set to buy 900,000 tonnes of wheat by June 2012. This should help the country to maintain enough supply on the domestic market as well as to rebuild stocks. Indeed, the USDA forecasts
Bangladeshi wheat ending stocks to be 1.8mn tonnes in 2011/12, 106% higher than the 10-year average of 891,000 tonnes. The government's hurry to buy wheat on the market corresponds to the recent moderation in global wheat prices, which lost 21.5% since August 29 2011.
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Bangladesh Agribusiness Report Q1 2012