Grain and Flour Market in Spain and Portugal

31 May 201610 min reading
Spain reportedly comprises 120 flour mills. Most of them have an annual capacity of more than 2000 tons. Besides, less than 5 mills share 75% of the market. As for Portugal, the number of flour mills is very low. They are usually dispersed in Lisbon and Porto. In general, milling industry consists of two main mill groups, which share the 65% market in the country. h_77_11 With an area of 504,782 km2, Spain is the second largest country in Western Europe and within European Union, following France. The country is located on the Iberian Peninsula in south-western Europe. The prominent cities include capital Madrid, Barcelona, Valencia, Seville, Zaragoza and Malaga. Spain is the second most mountainous country in Europe after Switzerland. Except for the western sides of mountains that surround the plateaus and high plains, more than two fifths of the peninsula is covered by mountain ranges. Portugal, officially the Portuguese Republic, is the westernmost European country, also located on the Iberian Peninsula in south-western Europe. Portugal is surrounded by Spain on the north and east, and Atlantic Ocean on the south and west. Archipelagos of Azores and Madeira, which are in the northern hemisphere on Atlantic Ocean, are also within Portugal albeit having autonomous governments. The prominent Portuguese cities include Lisbon, Porto, Amadora and Braga. ECONOMIC OVERVIEW Economy of Spain, 14th biggest economy on the world and 5th biggest in European Union, is a modern economy based on service sector. Like other West European countries, Spain underwent a period of transformation following World War II; accordingly, the importance of agricultural sector decreased while service industry gradually became more significant and began to dominate national economy. Retail business, tourism, banking and telecommunication are among prominent elements of economic activities. On the other hand, industry sector, which constitutes 23.1% of GPD, maintains its importance. The young and well-educated population makes Spain a price-competitive and innovative international centre. There are efforts for further economic growth in the future and such research and development activities are given utmost importance. In the wake of its access to European Community in 1986, Portugal gradually concentrated more and more on service sector. Back in 1960, agriculture, forestry and fishery constituted 24% of GDP, while the figure dramatically fell to 2.2% come 2014. The sector provides employment for 10.2% of total labour. The sectors of industry, construction, energy and water make up for 21.2% of GDP, and comprise 23.7% of labour. As for service industry, it constitutes 76.6% of GDP and 66.1% of labour. Geographical position of Portugal also contributes to growth of service sector. Tourism is a huge contributor to service industry. In general, traditional manufacturing sector leaves for new industries that include higher technology and contribute to economic growth, such as automotive, automotive supply industry, electronics, energy, pharmaceutics and new technologies. PLACE AND IMPORTANCE OF AGRICULTURE The productivity of Spanish agricultural sector is lower than in many European countries. This is mostly due to drought and irregular rains in recent years, as well as the low quality of soil and non-productive use of lands around the country. There are about 1.3 million agricultural enterprises in Spain. In the north and east, most agricultural business are of lower scale, while in south, especially in Andalusia, vast lands remain unprocessed due to disinterest of owners. Thanks to diversity of climate conditions and soil characteristics, different regions yield various agricultural products in the country. Almost all kinds of fruits and vegetables, citrus above all, are cultivated in Spain. Vineyards and olive groves have a significant share in agricultural production in terms of production amount and covered area. In Portugal, the share of agriculture in general economy is on decline in last few decades; nevertheless, agriculture is still the greatest source of unemployment. Agricultural sector underwent certain structural changes such as the rise in areas allocated for agriculture and the use of new cultivation methods. Differences, however, between regions and sectors remain intact. In Portugal, agriculture is based on small and medium scale family business and has an irregular structure. The main crops include grain (wheat, barley, corn and rice), potato, grape (wine grape), olive and tomato. GRAIN PRODUCTION IN SPAIN Pursuant to data by Food and Agriculture Organization of the United Nations (FAO), barley is the most produced grain in Spain. Barley cultivation exceeded 11 million tons back in 2007/08 and 2008/09; nevertheless, the figures varied between 5.9 and 8.2 million tons from 2009/10 to 2012/13. During season 2013/14, the barley production passed beyond 10 million tons, but it was recorded as 6.9 million tons for the season 2014/15. Wheat is another prominent grain in terms of production amount. During last 10 seasons, seasonal wheat cultivation varied between 4 and 7.6 million tons. The highest wheat production came in 2013/14 with 7.6 million tons. During season 2014/15, the production figure was 6.4 million tons. Corn and rice are other notable grain cultivated in Spain. Between seasons 2005/06 and 2011/12, seasonal corn production was about 3 million tons; as of 2011/12, the figure exceeded 4 million tons, before attaining 4.9 million tons in 2013/14 and declining to 4.6 million tons in 2014/15. Figures for rice cultivation, on the other hand, remain under a million tons. The production attained 900,000 tons in 2009/10, before falling to 881,000 tons in 2012/13. As for 2013/14, the rice production amount was recorded 851,000 tons, prior to a rise to 863,000 tons in 2014/15. Likewise, oat production amount is at a similar level beneath a million tons. In 2013/14, oat cultivation reached 964,000 tons, before declining to 670,000 tons in season 2014/15. In Spain, seasonal production figures for millet, rye, and sorghum are below 300,000 tons. GRAIN PRODUCTION IN PORTUGAL Pursuant to data by FAO, corn is the most produced grain in Portugal. In last ten seasons, corn production gradually increased and now approached a million tons. Between seasons 2007/08 and 2010/11, the production amount varied between 600-700,000 tons, before rising to 810,000 tons in 2011/12. Corn production attained 831,000 tons in 2012/13, 848,000 tons in 2013/14 and 933,000 tons in 2014/15. Another common grain is rice. The production amount of rice, however, is very low in comparison to corn. Production amount is generally below 200,000 tons. The figure was 168,000 tons in 2013/14 and 162,000 tons in 2014/15. Portugal cultivates wheat as well. Between seasons 2005/06 and 2009/10, the figures occasionally surpassed 200,000 tons. Nevertheless, there is a significant decline as of season 2010/11, when the figure dropped below 90,000 tons. In seasons 2011/12 and 2012/13, wheat production fell to 58-59,000 tons, before recovering and exceeding 80,000 tons come 2013/14 and 2014/15. As for barley, oat and rye cultivation in last three seasons, the figures are below 70,000 tons for Portugal. GRAIN TRADE IN SPAIN According to data by FAO, wheat is the most traded grain in Spain. Wheat export was generally recorded around 500,000 tons between seasons 2005/06 and 2013/14. During 2010/11, wheat export was 438,000 tons, before rising to 567,000 tons the following season. The figure dropped to 283,000 in 2012/13. As for season 2013/14, wheat export was 592,000 tons. Rice is another notable grain exported by Spain. During last ten seasons, rice export was around 150,000 tons. Season 2009/10 yielded lowest export statistics with 97,000 tons, while the highest came in 2012/13 with 223,000 tons. The recorded amount for season 2013/14 was 197,000 tons. As for trade of barley, corn, rye and oat, the figures do not attain 100,000 tons. Corn is the most imported grain by Spain. Corn import is generally recorded around 4 to 6 million tons between seasons 2005/06 and 2013/14. In 2010/11, the figure dropped to 3.9 million tons, before rising to 4.8 million tons in 2011/12 and 6 million tons in 2012/13. By season 2013/14, corn import was recorded as 5.5 million tons. Wheat is another much-imported grain in Spain. The country imported 3.4 to 7.4 million tons of wheat per season in the last decade. The highest wheat import came in 2004/05 with 7.4 million tons. During season 2011/12, 4.3 million tons of wheat was imported, while the figure soared to 5.4 million tons in 2012/13 before hitting the bottom with 3.4 million tons in 2013/14. As for import of barley, rice, rye and oat, the figures remain below 100,000 tons. GRAIN TRADE IN PORTUGAL According to data by FAO, rice stands out as the most traded grain by Portugal. Rice export was recorded generally around 20,000 tons between seasons 2005/06 and 2013/14. The figure was 30,000 tons in 2010/11, but dropped to 25,000 tons in 2011/12 and 21,000 tons in 2012/13. The recorded rice export for 2013/14 was 30,000 tons. Corn is among the significant exports of Portugal. During last ten seasons, corn export was around 25-30 thousand tons. In season 2006/07 came lowest figures with 6,000 tons, while the export reached its peak in 2007/08 with 98,000 tons. The export amount for 2013/14 was 27,000 tons. As for wheat, barley, rye and oat, seasonal export amounts remain below 45,000 tons. Portugal cannot export sufficient amount of grain; on the other hand, the country primarily imports grain such as wheat, barley and corn. Corn is the most prominent crop when it comes to grain import by Portugal. Corn import figures are recorded about 1.5 million tons between seasons 2005/06 and 2013/14. In season 2010/11, the corn import was 1.4 million tons, before rising to 1.6 million tons in 2012/13. The following season, import remained at similar level with 1.645 million tons. Wheat is another much imported product by Portugal. In last ten seasons, wheat import was generally about 1.5 million tons. The highest figure came in 2004/05 with 1.7 million tons. During season 2011/12, wheat import was 1.2 million tons, prior to increasing to 1.3 million tons in 2012/13. Season 2013/14, however, was the bottom for the figures in last decade with 1 million tons. As for import of rice, rye and oat, the amounts remain below 100,000 tons during last three seasons. FLOUR MILLING IN SPAIN AND PORTUGAL According to European Flour Millers, Spain comprises 120 flour mills. Most of them have an annual capacity of more than 2000 tons. Besides, less than 5 mills share 75% of the market. Almost the entire wheat produced in Spain is used in flour milling. Nevertheless, Spain is not self-sufficient when it comes to wheat for flour production. Therefore, half of wheat is provided from abroad. The flour, on the other hands, is mostly employed in bakery products such as biscuits and cakes. According to data by FAO, Spain exported around 200,000 tons of flour per season between 2005/06 and 2013/14. In 2011/12, the flour export was 228,000 tons, before declining to 206,000 tons in 2012/13. The figure was recorded 218,000 tons for season 2013/14. As for flour import, the statistics are on decline. Between seasons 2006/07 and 2009/10, the figures were above 200,000 tons, before dropping under 75,000 tons as of 2010/11. Import amount was 51,000 tons for 2013/14. According to data by Agriculture and Horticulture Development Borad (AHDB), Portugal comprises a very few number of flour mills. They are usually dispersed in Lisbon and Porto. In general, milling industry consists of two main mill groups, which share the 65% market in the country. Pursuant to report by FAO, Portugal exported about 25,000 tons of flour between 2005/06 and 2011/12, before rising to 35,000 tons in 2012/13 and 45,000 tons in 2013/14. Likewise, the flour import by Portugal is on gradual rise. The figure, recorded about 50,000 tons during seasons 2009/10, 2010/11 and 2011/12, soared to 61,000 tons in 2012/13 and 74,000 tons in 2013/14.  
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