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An Outlook: Abundant opportunities in SA Agribusiness

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

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An Outlook: Abundant opportunities in SA Agribusiness

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  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 Soybean production, domestic use, net trade and prices Peter Menzel, www.menzelphoto.com

  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, www.menzelphoto.com

  4. Average Weekly Food Consumption Germany: The Melander family of Bargteheide Food expenditure for one week: $500.07 USA: The Revis family of North Carolina Food expenditure for one week $341.98 Peter Menzel, www.menzelphoto.com

  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 2008. • 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 • Introduction to our Group and Style • 1990-2010 – Exciting 20 Years of Changes • 2010-2020 - What to Expect, How Should Companies in Developing Countries Respond? • What is the Role of Governments? • Research Agenda on Food Chains for South Africa Chapter ()

  8. BRIC to drive Modern Retail growth Note: 2010F and 2014F are calculated using fixed exchange rates based on the average rates of 2009 from www.oanda.com (01.01.09 to 07.12.09). Source: IGD Research, December 2009

  9. % of Population living <1.0$ pd

  10. % of Population Undernourished

  11. SAARF LSM Segments: Proportion of SA adult population and average monthly householdincome in 2009 Source: SAARF (2010a) & BFAP, 2010

  12. 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

  13. 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

  14. Primary Production: Performance of SectorGross Value of Production in R million R'million Source: DAFF, 2009.

  15. Performance of Sector Source: DAFF, 2009.

  16. Agricultural trade trends Agricultural trade Total Primary Processed Source: DAFF/NAMC, 2009.

  17. Major agricultural products exported: (R millions) 200720082009 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

  18. Major agricultural products imported: (R millions) 200720082009Rice 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

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

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

  21. SA Meat Consumption Source: BFAP, 2010

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

  23. Farming Debt (X R1 000 000) Source: DAFF, 2009.

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

  25. 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.

  26. Thank youwww.agbiz.co.za

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