BMI View: Russia's poultry and pork sectors will perform strongly as consumer demand is growing and domestic production is looking to bridge the gap left by EU imports , which will not resume until H216 . Wheat will outperform the grains complex out to 2020 due to elevated farmgate prices in rouble terms and strong opportunities on the domestic and export markets , which will maintain production incentives. The Russian dairy sector will benefit from growth momentum until 2017 due to the EU embargo . In particular, cheese production will see solid gains in a bid to gain market share. Afterwards, dairy producers will face lower subsidies and lower prices , which will lay the foundations for consolidation in the industry.
|Agribusiness Market Value|
|BMI Market Value By Commodity (2012-2020)|
|e/f = BMI estimate/forecast. Source: FAO, BMI|
Wheat production growth in 2016/17: 1.6% y-o-y to 62.0mn tonnes. We maintain our 2016/17 wheat production forecast at 62.0mn tonnes. Higher winter wheat acreage and warm weather over Q415-Q116 underpin our bullish view on the 2016/17 harvest.
Corn production growth in 2016/17: 0.6% y-o-y to 13.1mn tonnes. We have revised downward the growth trajectory of our corn production forecasts and now expect continuous declines from 2017/18 onwards.
Cheese production growth in 2015/16: 5.0% y-o-y to 893,000 tonnes. We have revised upward our cheese production forecasts due to a stronger boost from the import ban than we initially expected. We now forecast output to reach 893,000 tonnes in 2015/16, representing solid growth of 5.0% y-o-y after growing by 11.8% y-o-y in 2014/15.
Poultry production growth in 2015/16: 4.2% y-o-y to 3.7mn tonnes. Poultry production will continue to outperform the livestock complex as producers benefit from an absence of imports until H216. After the initial headwinds of a return of imports in 2016/17, production will remain strong due to stable domestic demand as macroeconomic growth starts to pick up.
Pork production growth in 2015/16: 5.0% y-o-y to 2.7mn tonnes. Over 2015/16, we forecast strong growth in pork production as the domestic sector is well-positioned to take advantage of the decreased import supply following the import ban of Western products.
2016 real GDP growth: -1.2% y-o-y. An increase compared with -3.7% in 2015.
2016 consumer price inflation: 7.8% y-o-y average. A decrease compared with 15.6% in 2015.
Wheat production will outperform the grains complex out to 2020 due to elevated farmgate prices in rouble terms and strong opportunities on the domestic and export markets. Corn output will fail to maintain its strong recent growth due to lower imports of high-quality seeds.
The Russian dairy sector will benefit from a growth momentum until 2017 due to the country's ban on EU food imports. In particular, cheese production will see solid gains in a bid to gain market share. Afterwards, dairy producers will face lower subsidies and lower prices which will lay the foundations for consolidation in the industry. We believe the government will struggle to maintain subsidies for dairy production as well as for capital investments in dairy farms in light of our downward revision to the country's GDP in 2016.
Consumption of poultry, pork and beef will contract in 2016 due to elevated prices, as the trade restrictions reduce the supply of meat available to Russian consumers. The production of poultry and pork will see positive gains as domestic farmers look to fill the gap in imports until H216. Beef production will contract in 2015/16, before turning positive in 2017/18.
The Russia Agribusiness Report features BMI Research's market assessment and independent forecasts for production, consumption and trade across core agricultural commodities.
BMI's Russia Agribusiness Report includes independent commodity price forecasting and analysis for key agricultural outputs, an overview of the agribusiness competitive landscape and a discussion of the downstream context of agricultural production in relation to country food consumption forecasts and composite food and beverage trade forecasts.
- Use BMI's independent industry forecasts to test other views - a key input for successful planning in dynamic agribusiness markets.
- Apply BMI's medium-term commodity price analysis to assist with budgetary planning and the identification of investment opportunities and potential risks.
- Assess the activities and market position of your competitors, partners and clients.
BMI Industry View
Summary of BMI’s key industry forecasts and views, highlighting recent changes and key risks to the industry outlook.
Industry SWOT Analysis
Analysis of the major strengths, weaknesses, opportunities and threats within the wider agricultural industry.
BMI Supply & Demand Forecasts
Divided into sections based on various diverse sectors in the agriculture market, the chapter provides insight into each market’s agricultural industry, centred on sector forecasts to end-2019 for the consumption, production and trade of key commodities.
- Consumption Forecasts: Accompanied by a discussion of the main drivers of consumption growth: macroeconomic factors, food processing trends, price movements and increasingly, demand from the non-food sector.
- Production Forecasts: Examine the trends influencing BMI’s production outlook: global demand, price increases, public and private sector investment and agricultural efficiency improvements.
- Trade Forecasts: Accompanied by a discussion of the factors influencing a country’s trade in agricultural goods, including domestic demand, global prices and government trade policies.
- BMI’s Forecasts: Accompanied by a risks-to-outlook assessment, which examines potential factors that could affect our existing forecast picture and the likelihood of their occurrence.
BMI’s Commodity Price Analysis
Fundamental and technical analysis of the short- and medium-term price outlook for eight agricultural commodities based on globally recognised benchmarks.
Analysis of headline food and drink forecasts, including total food consumption, per capita food consumption and total sector trade, which provide important downstream intelligence for primary agricultural producers.
Includes relevant articles from BMI’s daily analysis service. These can include: long-term projections on agricultural imports and exports; our perceptions of the impacts of economic slowdown on key companies and subsectors within the Agribusiness industry in a given country; our analysis of fertilizer production; as well as other relevant analysis of recent news and events.
The reports contain information on prominent companies operating in each market.
Key Commodities Covered By The Agribusiness Market
Reports Include: Grains, Dairy, Livestock, Rice, Sugar, Palm Oil, Edible Oils, Coffee, Cocoa, Cotton, Soybean
Please note – not all reports cover all commodities.
The Agribusiness reports draw on an extensive network of primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports.