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The Warsaw Voice » Special Sections » April 25, 2013
Polska…tastes good!
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Polish Export Hits: Dairy Products
April 25, 2013   
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Poland’s dairy industry has cause for satisfaction. Polish people are consuming more and more dairy products, and exports are growing as well.

Today the average Pole consumes the equivalent of just under 200 liters of milk in the form of dairy products per year. That’s over 10 liters more than at the end of the previous decade but still less than the EU average, which is about 260 liters. Sweden is way in front, with per capita consumption of almost 500 liters, but this distance will grow smaller. Euromonitor estimates that in 2015, for example, cheese sales will be more than 20 percent higher than last year, and sales of drinking yogurts will have grown by almost 50 percent. The value of the Polish dairy market will also increase. In 2012, Polish people spent about zl.15 billion on dairy products. In three years the Polish dairy market will be worth almost zl.17 billion.

Not just domestic market growth but also exports contribute to sales growth in the dairy sector. Polish dairy exports have increased almost fourfold since Poland’s EU accession. “Export results have been very good for years, and dairy exports have long been a driver of exports in the agri-food sector as a whole,” Maciej Stępień, president of the Association of Dairy Employers, Exporters and Importers, told the portalspożywczy.pl website. “The dairy sector is one of the leading segments in the agri-food sector in terms of exports.”

2012 was yet another year of growing dairy exports. The latest report by the Team for Monitoring International Agricultural Markets of the Foundation of Assistance Programs for Agriculture FAMMU/FAPA notes that Poland’s foreign trade in dairy products has been increasing continually since 2010. Last year producers sold goods worth over 1.4 billion euros to foreign markets, or almost 3.4 percent more than in 2011. This is the highest level in history. Imports, on the other hand, decreased by 1 percent and stood at 473.4 million euros.

The growth rate of Polish dairy exports slowed down in the analyzed period. Nevertheless, exports grew while imports decreased, leading to an increase in the positive balance of trade from 892.6 million euros to 943.4 million euros.

According to FAMMU/FAPA, the slower pace of Polish dairy exports was caused by the deteriorating situation on the EU dairy market in the first half of 2012. Butter and milk powder prices dropped, due to factors including overproduction, large reserves, weaker export demand and an uncertain economic situation.

In the second half of last year, on the other hand, prices went up in Poland’s main dairy export markets. A drought in the United States and growing feed prices led to an increase in dairy production costs. The average prices for dairy products in Poland in 2012 were lower than the year before, as confirmed by the slower rate of export value growth observed (+3.4 percent) compared to volume growth (+8.8 percent).

Last year cheese in all its varieties was the top export item, with the export value growing by over 13.3 percent to 550.4 million euros (and volume increasing by 16.6 percent to 177,100 metric tons). The role of these products in dairy exports and their share in total dairy export value grew from 35.4 to 38.9 percent.

Poland is a giant on the world cheese market. Only the United States, Germany, France, the Netherlands and Italy make more cheese. The biggest buyers of cheese from Poland are EU countries (70 percent in value terms).

Second on the list of export hits is still milk powder, mainly skimmed milk powder, exports of which—despite a 3.1-percent growth in export volume (to 111,600 tons)—were worth over 6 percent less than a year before (235.6 million euros). The amount of liquid milk and cream sold abroad was also greater than in 2011 (288,300 tons), but the value dropped by 2 percent (to 186.2 million euros). The value of exports of yogurt, kefir and similar products decreased by about 7 percent to 115.8 million euros (the volume dropped by 10.4 percent, to 109,800 tons). A high growth rate was reported for the value of whey exports (+28 percent to 173.8 million euros), with the volume also much higher than in 2011 (194,500 tons, or +15.5 percent). A different situation occurred in butter exports: volume decreased by 8.7 percent to 31,200 tons while the value (92 million euros) was 32 percent lower than the record figure of 2011.

More sweet cream ice cream was exported than in 2011. Export volume growth was even more spectacular than that of whey, reaching +20.8 percent (to 35,000 tons). The value of exports in this case was 27 percent higher last year than in 2011 (63 million euros). The growth rate of dairy exports was much lower in 2012 than the export growth rate for the entire agri-food sector (3.4 percent, compared to 14.82 percent for all agri-food products), reducing the role of dairy products in total food exports (a share of 8.1 percent compared to 9.02 percent in 2011).

Polish dairy products are sold mainly to EU countries. However, due to growing demand for dairy products in Asia, the Middle East and Africa, Poland has recently substantially increased its exports of milk powder to Algeria and whey to China, Indonesia and Malaysia. In addition, there is a positive aspect in the still quite substantial growth of exports beyond the EU’s unified market. It is especially worth noting the large growth in the value of exports to Russia; the country was the third-biggest buyer of cheese from Poland last year, for example. Exports of Polish cheese to Ukraine doubled.

Polish dairy producers see their future in expansion to new international markets, primarily eastwards. “The Polish market is important, but there is no question of true development if we do not steadily and rapidly develop exports,” portalspożywczy.pl was told by Dariusz Sapiński, president of Mlekovita, one of Poland’s leading dairy producers. “In our operations we focus mainly on eastern markets, chiefly Russia. The markets of Western European countries are already saturated. Local dairy businesses have a strong position and we would find it hard to compete successfully against them.”
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