Rabobank Agribusiness Review February 2012

Rabobank Agribusiness Review February 2012

Please find attached Rabobank’s latest Agribusiness Review for Australia and New Zealand.
Prepared by the bank’s Food & Agribusiness Research and Advisory division (FAR), the report provides monthly commentary on New Zealand and Australian agricultural conditions.
Key highlights:
• Most of New Zealand experienced a drier-than-normal January, while the continuation of La Niña conditions has brought wetter-than-normal conditions to eastern and western areas of Australia in January. Near-normal autumn conditions are expected in New Zealand. Australia’s rainfall outlook suggests a wetter-than-normal autumn in western and northern Australia, with normal conditions expected elsewhere.
• Sentiment in global markets improved in January, following signs of progress in the Eurozone recovery. Positive economic indicators from the US added to a more optimistic tone. Growth in China slowed in 2011, but continues to expand at a robust rate. The New Zealand economy continues on a slow but gradual recovery phase. Australia’s economic situation is mixed, with subdued retail trade figures alongside resilient export earnings.
• Fundamentals in currency markets continue to support the New Zealand and Australian dollars at elevated levels. For New Zealand and Australian exporters, the likelihood of further appreciation appears limited; but strong currencies will remain a permanent feature over the short-term.
• A softer tone to global dairy markets, brought about by sufficient global supply and cautious import purchasing, has seen commodity prices fall back. However markets are beginning to find price support with some global buyers enticed back into the market by price discounts on offer.
• Global prices for farm inputs have started to find support in the early stages of 2012. With important planting programs approaching in the Northern Hemisphere, pipelines will need to be filled, triggering a recovery in global demand.
• Following a weaker finish to 2011, global grain markets have found support in the early stages of this year. Mounting concerns about supply, particularly in South America and the Black Sea region, have seen risk premiums build in global pricing.
To view the full report, please follow this link:
Australia and New Zealand Agribusiness Review

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