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The Warsaw Voice » Special Sections » January 27, 2011
Polska… tastes good!
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Polish Food Exports Grow
January 27, 2011   
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Polish food produce is mainly shipped to other European Union countries. But Polish food producers are gradually increasing their exports to other markets around the world.

According to the Ministry of Agriculture, exports of agricultural and food products exceeded 10 billion euros in the first three quarters of 2010 and approached 14 billion euros at the end of the year. In 2009, food exports totaled 12 billion euros, accounting for 12 percent of all Polish exports. The difference between the value of exports and imports meant a trade surplus of 2.1 billion euros.

Polish food is primarily exported to other European Union countries. Germany is the largest importer of Polish food, accounting for 20 percent of all agricultural and food products exported from Poland. Other major importers of Polish food among EU countries are Britain, the Czech Republic, the Netherlands, Italy and France. Central and Eastern European countries are also important trading partners for Poland, accounting for over 10 percent of Poland’s total exports of food and live animals.

Exports of Polish food to European markets soared when Poland joined the EU in 2004. Trade with other EU member states took off when customs barriers were removed and Poland was included in the EU’s Common Agricultural Policy. In 2004, the EU accounted for 70 percent of Polish food exports and in 2009 the figure exceeded 80 percent. Before 2004, Poland mainly exported pork, beef, offal and poultry, while at present, the main agricultural and food products sold on the EU market include confectionery, meat and meat products and fruit preserves.

Exports of Polish dairy products took off after 2004 as well. The most notable increase occurred in liquid milk and cream which, prior to EU enlargement, were not exported to the EU. But since 2005 they have accounted for 15 percent of exporters’ revenues. Sales of cheese, powdered milk, yogurt, butter and ice cream are also growing rapidly. Polish dairy products are primarily exported to Germany, followed by the Netherlands, the Czech Republic and Italy.

Poultry meat has become a much sought-after export product, with chicken breasts being particularly popular with EU importers. The sharpest increase in poultry exports, 50 percent, occurred right after Poland joined the EU. Accession enabled Polish companies to offer cheaper meat to their customers abroad, which consolidated Poland’s position in that segment of the market. Most Polish poultry goes to Germany. The main buyers of Polish pork are new EU member states such as the Czech Republic, Latvia, Lithuania, Slovakia and Romania.

Polish food producers have been successful abroad not only thanks to their quality products, but above all due to their competitive prices. Thanks to a high exchange rate of the euro in 2010, Polish goods were among the cheapest in Europe. According to data by Euromonitor International company, food is also affordable for domestic consumers.

Europe’s cheapest apples, sugar, tomatoes, milk, poultry meat, flour and butter are available on the Polish market. Food prices in Poland are lower than in Western Europe, and they are also lower than in other countries in the region. In Hungary, only beer and wine are cheaper than in Poland, and in the Czech Republic and Slovakia, only sodas are cheaper. This is the result of a different market structure. In Poland, the market is still heavily fragmented. Retail chains control less than 50 percent of the market, with the top players holding no more than several percent. In other analyzed countries, retail chains control around 80 percent of the market, and the market shares of the largest companies sometimes exceed 40 percent. Thanks to low prices, Polish companies often win bidding procedures to become suppliers for retail chains throughout the region.

However, Poland will find it difficult to further increase its food exports to EU member states. Polish producers are starting to seek out new markets in countries such as China, Japan and South Korea. A major opportunity would be to revive trade with Russia, which used to be Poland’s main trade partner.

In 2009, agricultural and food products exported to Russia were worth over 560 million euros. Exports were worth almost the same, 548 million euros, in just the first nine months of 2010, which was 30 percent more than in the same period of 2009. Food exports in 2009 accounted for around 17 percent of all Polish exports to Russia.

The most popular Polish products with Russian consumers include fruit, most notably apples, followed by fresh, processed and frozen vegetables, dairy products, meat and meat products, chocolate products, pastries and flowers. The sharpest increase has recently occurred in exports of meat, dairy products and chocolate.

Poland has also been trying to introduce its food to other markets. Polish exporters have been helped by the agriculture ministry, which has taken action to increase exports of pork, for example, to non-EU countries. This mainly involves the need to obtain permits to export meat to countries such as China, Ukraine, Russia, Vietnam, Mexico, Taiwan, the former Yugoslav Republic of Macedonia, Croatia and Belarus.

Talks with China are well advanced. In May last year, an agreement was signed on veterinary requirements for meat imported into that country. In September 2010, pork exports to Singapore were approved. Polish producers are also eyeing Arab markets, which have shown an interest in Polish dairy products.
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