BMI View: We have revised our forecasts for the Italian agribusiness sector and now hold a mixed outlook , as we bel ieve the cheese, milk, poultry and pork industries will record stable growth through to 2018/19. The removal of the EU's milk production quota in 2015 and the opportunity for Italy to develop its value-added exports will be positives . We expect corn production to post the strongest growth out of the grains complex, largely due to base effects, as we believe wheat output will remain broadly flat due to little opportunity for area or yield growth.
Wheat production growth to 2018/19: 4.3 % to 7. 6 mn tonnes. We expect wheat production in Italy to rebound modestly and go above the 7.5mn tonne mark.
Cheese consumption growth to 2019: 20.1 % to 1.9mn tonnes. Per capita cheese consumption, at 25.8kg in 2014, is on a par with France and Germany and higher than in northern European countries such as Sweden and the UK. Still, we see room for additional growth over the coming years.
Poultry production growth to 2018/19: 1 0.9 % to 1. 4 mn tonnes. Poultry is a relatively cheap meat; as such, we expect continued strong demand amid the tough economic climate.
2015 real GDP growth: 0.7 % y-o-y, compared with an estimated contraction of 0.4% in 2014.
2015 consumer price index: -0.2 % average, down from 0.2% in 2014.
BMI universe agribusiness market value: 8.0% y-o-y increase to USD34.2 bn in 2014/15, forecast to grow on average by 2.8% annually between 2014/15 and 2018/19.
|Agribusiness Market Value|
|BMI Market Value By Commodity (2011-2019)|
|e/f = BMI estimate/forecast. Source: FAO, BMI|
The outbreak of highly pathogenic avian influenza (HPAI) in Italy in August 2014 led to a ban in January 2015 on live poultry and egg imports into Russia, a major buyer of Italian poultry. We believe that this should not affect production significantly as the ban, which includes poultry upkeep and slaughter equipment, will be lifted upon clearance of the virus, which, at the time of writing, has been relatively confined.
The 2015 heat wave in Europe that is threatening to reduce the EU28 corn crop yields by up to 19% could have a devastating effect on Italy's corn production harvest for the year. We are cautious about this current development as neighbouring France is already bracing for a severely reduced corn harvest this year.
According to research published in BMC Plant Biology, insights on a variety of common wheat which have protective cell walls to the destructive Fusarium Head Blight (FHB) might help to produce stronger, disease-resistant varieties of durum wheat for improved pasta production. Breeding disease-resistant durum has traditionally been a challenge as there has been a lack of varieties available to be used in breeding programs. However, with this discovery, it is hoped that the identification of unique wall traits in FHB-resistant common wheat could help in breeding durum wheat varieties that are able to defend themselves against infection and reduce fungal toxin contamination in food.