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Increased Propensity for Consumption and Higher Incomes in Romania Push Food Sales to Record High

Posted on: Tuesday, 13 March 2007, 03:00 CDT

Research and Markets (http://www.researchandmarkets.com/reports/c51956) has announced the addition of "Romanian Food and Beverages Report" to their offering.

The "Romanian Food Sector Report" offers an extensive summary of the Romanian food market. The report includes a complete coverage of the latest developments as well as the latest corporate news accompanied by statistical data. This sector report is ideal to keep you abreast on recent company and industry news. Written by local analysts, it is a unique market and business intelligence analysis, tailored to save time by providing in-depth information, while helping you to make confident and informed business decisions. The report covers the period July 20 -- November 15, 2006.

Similar to the whole Romanian industry, the food and beverages sector came under the effect of growing domestic demand. Food sales through specialised stores increased by nearly 30% y/y in Jan-Aug, according to the statistics office. This may overstate the growth in food sales, but there are other evidences (8% real growth in wages, strong net consumer credit flow, increased expectations for higher revenues) that indicate that the market for consumer goods is expanding at high rates. The households' consumption accelerated to 12.7% y/y in Q2 from 10.9% y/y in Q1 this year, according to the GDP detailed statistics. This is well above the GDP growth and the differential generates widening trade deficit. The trade deficit in the area of food goods already exceeded EUR 1bn in Jan-Aug, according to our calculations, or 1% of full year's GDP.

For full year, the gap may hit 2% on seasonally higher imports during Q4. The trade gap is expected to widen next year, when the imports from EU will have the duties and quotas lifted while the duties for imports from other countries will also drop. Dairy and meat industries are particularly vulnerable to tougher competition from imports.

In this Issue:

Increased propensity for consumption and higher incomes push the food sales at record high

Strong domestic demand stimulates food processing industry...

...but also imports, which outpace domestic production with 26.8% y/y

Meat replaces cereals as main import item

Cereal crop to have negative impact on GDP growth

Wheat harvest to cover internal consumption this year

Wheat exports exceed 400 TMT in Jun-Sep

Farmers' association expects 1mn MT wheat imports

Sunflower crop roughly in line with expectations; yield remains well below break even point

Farmers replace wheat with rape

Investments in bio-diesel to top EUR 240mn next year

Wholesale prices -- wheat hits EUR 100 per ton

Farmers are reluctant to register their cows to get production quotas

Lifting of import duties may double imports to 20% of local market

Greek companies pour EUR 30mn in dairy sector

EVEN of Brest (France) considers investment in Constanta

Dairy makers see financial problems following the growing labour, utilities costs

Hochland's turnover to grow 11% y/y to EUR 42mn this year

Albalact expands sales 54% y/y on new brand

Sugar beet gains ground in farmers' preferences

Agrana to triple sugar production this year

Poultry market is expected to grow by 40% y/y in 2007

APPENDIX: Detailed foreign trade

Overview

Food & Beverages Sectors

Market Trends

Business Round-Up / Companies

Appendix

Companies Mentioned:

Meggle

Nordex Food

Tyras

Olympos

Friesland

Napolact

Hochland

LaDorna

Albalact

Covalact

Prodlacta

Argus

Bunge

Ultex

Ulerom

Monsanto

Comcereal

Cerealcom

Pambac

For more information visit http://www.researchandmarkets.com/reports/c51956

Source: Business Wire

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