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An Outlook: Abundant opportunities in SA Agribusiness AMT Conference 22 September 2010 John Purchase.

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Presentation on theme: "An Outlook: Abundant opportunities in SA Agribusiness AMT Conference 22 September 2010 John Purchase."— Presentation transcript:

1 An Outlook: Abundant opportunities in SA Agribusiness AMT Conference 22 September 2010 John Purchase

2 Average Weekly Food Consumption Bhutan: The Namgay family of Shingkhey Village Food expenditure for one week: $5.03 Chad: The Aboubakar family of Breidjing Camp Food expenditure for one week: $1.23 Peter Menzel, Soybean production, domestic use, net trade and prices

3 Average Weekly Food Consumption Egypt: The Ahmed family of Cairo Food expenditure for one week: $68.53 Ecuador: The Ayme family of Tingo Food expenditure for one week: $31.55 Peter Menzel,

4 Average Weekly Food Consumption Germany: The Melander family of Bargteheide Food expenditure for one week: $ Peter Menzel, USA: The Revis family of North Carolina Food expenditure for one week $341.98

5 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 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.

6 The Future of Food... “ Evolution of World Food Chains: Response of Companies in Developing Countries” Prof. Dr. Marcos Fava Neves Professor at School of Economics and Business - University of São Paulo, Brazil

7 Out Topics – Future of Food 1.Introduction to our Group and Style – Exciting 20 Years of Changes 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 ()

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10 Note: 2010F and 2014F are calculated using fixed exchange rates based on the average rates of 2009 from ( to ).www.oanda.com Source: IGD Research, December F2014F RankCountry€bnRankCountry€bnRankCountry€bn 1US6121US6381China761 2China3282China5292US745 3Japan2973Japan3453India448 4France2064India2794Japan360 5India1905France2055Russia322 6UK1886Russia1866Brazil284 7Germany1507Brazil1857France228 8Italy1278UK1708UK198 9Russia1169Germany1609Germany168 10Mexico11210Italy13010Indonesia167 2,3262,8273,681 BRIC to drive Modern Retail growth

11 % of Population living <1.0$ pd

12 % of Population Undernourished

13 SAARF LSM Segments: Proportion of SA adult population and average monthly household income in 2009 Source: SAARF (2010a) & BFAP, 2010

14 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

15 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

16 Primary Production: Performance of Sector Gross Value of Production in R million R'million Source: DAFF, 2009.

17 Performance of Sector Source: DAFF, 2009.

18 Agricultural trade trends 18 Source: DAFF/NAMC, Total Primary Processed Agricultural trade

19 Major agricultural products exported: (R millions) 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

20 Major agricultural products imported: (R millions) 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

21 Soybean oilcake production, consumption, net trade and prices Source: BFAP, 2010

22 Soybean production, domestic use, net trade and prices Source: BFAP, 2010

23 SA Meat Consumption Source: BFAP, 2010

24 SA chicken production, consumption and chicken:maize price ratio Source: BFAP, 2010

25 Farming Debt (X R ) Source: DAFF, 2009.

26 Opportunities Farming requisites, machinery and inputs Financing and insurance Technology service provision Storage and handling Processing Agro-logistics Trade and marketing services Retail

27 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.

28 Thank you


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