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The Warsaw Voice » Special Sections » November 25, 2011
Polska…tastes good!
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Polish Food Exports on the Rise
November 25, 2011   
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Polish foodstuffs are enjoying growing popularity among international consumers. The proof can be found in Poland’s rising food exports, which will reach a record value of 14.2 billion euros this year.

Poland’s accession to the European Union in 2004 triggered the rise in food exports to European markets by eliminating customs barriers and including Poland in the EU’s Common Agricultural Policy, the main destination of the country’s food exports. The EU market has expanded steadily since then, accounting for about 70 percent of Polish foodstuff exports in 2004 and more than 75 percent in 2011. Before 2004, the main export foods were red meat (pork and beef), offal and poultry. Today the main Polish farm and food products headed for EU markets are baked goods, raw and processed meat and processed fruit.

Exports of dairy products also have grown significantly since 2004, especially liquid milk and cream. These products were not previously exported to the EU, but have accounted for 15 percent of exporters’ sales since 2005. Sales of cheese, powdered milk, yogurt, butter and ice cream are growing quickly, too. The main export market for these products is Germany, followed by the Netherlands, the Czech Republic and Italy.

Poultry meat has become a highly valued export product, with chicken breasts in especially high demand among EU importers. The greatest export growth—by 50 percent—was reported just after Poland joined the EU. Companies could offer foreign buyers cheaper meat at the time, which consolidated Poland’s position in this segment. Germany is also the top market for Polish poultry.

In early 2009, most analysts expected the global crisis to slacken international demand for Polish meat, cheese and fruit. There were dire predictions that some processing plants would go bankrupt because they would be saddled with excessive supply and dropping prices. Indirectly, this could have affected the entire economy because food accounts for more than 10 percent of Polish exports. Luckily, nothing of the sort happened.

The value of exports of Polish food and farm products decreased in 2009 for the first time since Poland joined the EU, but the 2.2 percent drop was much smaller than analysts had forecast. Some had even suggested a decline of 8-10 percent. Instead, exports were rescued by the weakening of the Polish currency.

Moreover, transaction prices did not drop as much as expected. The year 2010 was a much better one and forecasts for this year speak of another record-breaker.

The latest analysis from the Market Research Department of the Institute of Agricultural and Food Economics-National Research Institute (IERiG¯-PIB) shows that in the first half of 2011, compared with the same period of 2010, the value of farm and food product exports grew 13 percent, to 7.1 billion euros, while imports in the same segment grew 16.3 percent, to 5.9 billion euros. This yields a trade surplus of 1.1 billion euros, compared with 1.2 billion euros in the first half of 2010.

The share of food and farm products in total exports decreased to 10.6 percent in the analyzed period compared with 10.9 percent in 2010, while imports remained unchanged (8.1 percent). The surplus generated in the food trade, therefore, has a significant impact on the balance of foreign trade. Foreign trade has a beneficial influence on the market situation in many sectors of agriculture and the food processing industry. In 2010, 29 percent of sold food processing industry output was exported, compared with 25 percent in 2009.

This year marks a continuation of a new trend in the geographical structure of Polish agricultural exports that started in the second half of 2010: a growing diversification of sales and purchase markets. Polish exporters have been seeking new sales opportunities, while importers are looking for new sources of goods. The role of the Commonwealth of Independent States countries and developing countries has increased in exports, at the cost of the EU and other developed countries.

The IERiG¯-PIB’s analysis shows that, as in previous years, the main trade partners this year are EU countries, accounting for about three-fourths of turnover. The changes in the geographical structure of exports confirm that Polish exporters have been responding to the still-unfavorable economic situation in developed countries, which are their main trade partners, by continually seeking for new markets in order to diversify sales. This is shown by the decreasing share of developed countries and the growing share of eastern markets and developing countries in export sales.

The first half of 2011 saw a substantial increase in the export of animal products over the same period last year (18.7 percent, to 3 billion euros). Export growth for plant products was half as fast (9.4 percent, to 3.7 billion euros). Among animal products, the export of most goods grew, with the exception of live animals. It was the same for plant product exports, the only decreases coming in foreign sales of mushrooms and mushroom products as well as bottled water and carbonated soft drinks.

Experts estimate that for the whole of 2011, the surplus in trade in farm and food products could reach 2.5 billion euros (2.6 billion euros in 2010). Export sales will grow by more than 5 percent, to 14.2 billion euros, while spending on imports will increase by almost 8 percent, to 11.8 billion euros.

The forecasts for next year are optimistic as well. Overall exports of farm and food products are expected to be worth about 7.2 billion euros in the first half of 2012, over 1 percent more than in the first half of 2011. Spending on imports will grow by just under 0.4 percent, to 5.9 billion euros. The positive balance of trade could reach about 1.2 billion euros, surpassing 1.1 billion euros in the same period of 2011.
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