Polish product wanten in the East and the West
European Union member states are Poland’s most important partners in the agricultural and food trade. The trade is dominated by processed products, both of vegetable as well as animal origin. Despite slight drops in particular product groups of the Polish export, which were connected with the global economic crisis, Polish products are willingly imported by other countries both from the West and from the East.
Based on the latest report entitled “The analysis of selected issues and tendencies in the Polish production and foreign trade of agricultural and food products in the first half-year of 2009”, prepared by the Foundation of Assistance Programmes for Agriculture and the Foreign Agricultural Markets Monitoring Unit, Germany is the most important trade partner for Poland in terms of both export and import. In the said period, the sale to the German market fell by 19.5%, whereas the import from Germany by 34.8%. Despite exports reduction, the share of the German market increased by 1 percent to 26.1%, while the position in import fell by 1.4 percent to 22.3%. It is also worth mentioning that the first half-year in total foreign trade with Russia, differently from the situation of agricultural trade, brought a heavy collapse in exchange. The export to the Russian market decreased by 43.7% and the import fell by 37.9%. China is considered one of the import markets which definitely profited in the analysed period. During the first six months of 2009, the share of Chinese products in Polish import increased by 2.1 percent and reached 9.4%.
In the period from January to June 2009, the position of developed countries (including EU member states) strengthened in Polish export, whereas the role of Central and Eastern European countries was reduced. The position of these groups of countries in Poland’s import got weaker, whereas the share of developing countries rose by 3.2%.
The share of agricultural and food products trade in Polish foreign trade in total, since Poland’s accession to the European Union (2004), has remained on a fairly stable level – approximately 10% on the side of exports and some 6-7% in the scope of import. The first six months of 2009 brought a considerable increase of shares in these areas. Especially in terms of export, the share totalled 12%. Imports recorded a share of 8.7%. The above data document a clearly better condition of Polish agricultural export, which is also visible when analysing the turnover balance in foreign agricultural and food trade. In the said period, the balance grew by 49.3% from EUR 581 million in the first half of 2008 to EUR 1.15 billion in the period from January to June 2009.
Poland’s most important exports
Processed products of both vegetable and animal origin dominate in the Polish agricultural and food export (altogether approximately 57% of total agricultural and food export value). In the first half of 2009, the sale of processed products to foreign markets decreased by some 18%. The revenues coming from the exportation of butter (-56%), milk, cream and ice cream (-35%), as well as poultry and giblets (-20%) decreased the most in the animal section. On the other hand, the exportation of fat and meat-and-bone meal rose by 31%. Red meat and variety meats recorded the highest value of sale in the first half-year of 2009 among all agricultural and food products (EUR 528.8 million). Although the exportation of fish and fish products was getting increasingly important each year, a 7.5% drop in the sales value was recorded during the first half of 2009, including a 14% drop of value in the export of fish and crustaceans; on the other hand, the export of fish products increased by about 7%.
In the vegetable section similarly to previous years, confectionery products were the most important group of goods, whose export value in the first half-year of 2009 decreased by about 3%. Other significant exports were fruit products (-14%) and vegetable products (-10%). Among vegetable raw materials, the revenues from the sale of wheat (+423%) and fresh fruit (+74%) rose considerably from the first half of 2008, which allowed the total exportation of raw materials to grow on average by 46%. However, the sale of other vegetable raw materials was reduced by 17% – 26%, with oil seeds recording the biggest drop (-26%). Among the group of processed vegetable products, only sauces, soups and thickeners (4%) as well as oilseed cake, fodder components and fodder (+3%) recorded an increase in the value of sales. The sale of remaining processed products dropped in value, with sugar and molasses (-31%) as well as starch, semolina and malt (-17%) recording the highest levels of value decrease.
In the section of other products, tobacco products, especially cigarettes, had the most important position in exports and recorded a 52% increase in the sales value in the first half-year of 2009. It is worth emphasising that these products were the second most valuable product of Polish agricultural and food export in the analysed period.
Most important partners
Based on the report prepared by the Foreign Agricultural Markets Monitoring Unit and the Foundation of Assistance Programmes for Agriculture, European Union member states are Poland’s most important partners in the agricultural and food trade. In the first half-year of 2009, European Union was still the dominating recipient of Polish food products and agricultural goods, as well as their biggest supplier to Poland. The balance in agricultural and food trade with the European Union improved thanks to a smaller decrease of exports in relation to imports.
In the first half of 2009, agricultural and food products worth more than EUR 4.3 billion were sold to the European Union, which constituted a 79.4% share in the Polish agricultural and food export in total (58.5% – export to the “old” EU member states; 20.9% – export to the “new” EU member states, i.e. countries that joined the Union in 2004 and 2007). A positive balance of agricultural and food trade with the European Union totalled EUR 1.28 billion in the analysed period and was higher by 22% as compared to the corresponding period the year before. The improvement of balance was possible due to a smaller drop of exports (-3%) in relation to imports (-11%). Goods worth in total EUR 3.06 billion were imported from the European Community, which constituted a 70% share in the Polish agricultural and food import. For many years, Germany has been the major recipient of Polish agricultural and food products. In the said period, this country purchased Polish food products for EUR 1.18 billion (a share of 21.7% in Poland’s total agricultural and food export).
The second most valuable market for Polish agricultural and food products was Italy with a 6.8% share (nearly EUR 370 million). The third place was taken by Great Britain, which imported products for almost EUR 359 million (6.6% share). The top ten most important recipients of Polish agricultural and food products within the European Union and in the world included the Czech Republic (6.4% share in Polish export, EUR 349 million), the Netherlands (6%, EUR 330 million), Russia (5.3%, EUR 290 million), France (5.3%, EUR 289 million), Hungary (3.7%, EUR 200 million), Ukraine (3%, EUR 181 million) and Lithuania (3%, EUR 163 million). In the first half-year of 2009, the highest dynamics of export increase among all 27 member states of the European Union was recorded by Cyprus (50%), Spain (31%), France (21%), Italy (22%) and Finland (20%).
Beginning with 2004, a decreasing share in the Polish agricultural and food export was recorded in the case of the countries belonging to the Commonwealth of Independent States. However, in the first six months of 2009, the sale to the Commonwealth of Independent States increased by 10% and the share in the Polish agricultural and food export rose by 9.6%.
Such results were possible thanks to intensified deliveries to Russia (exports increase by 33%) and Ukraine (+6%). Russia was ranked sixth and Ukraine was tenth among the biggest recipients of Polish food and agricultural products.
Germany – number one
For many years, Germany has been the most important supplier of agricultural and food products to Poland (at present it has a 22% share in the structure of Polish agricultural and food import). Admittedly, in the first half-year of 2009, the value of products purchased from Poland’s western neighbour reduced by approximately 10% (to EUR 947 million); however, the drop of exports resulted in balance improvement by 17% (from some EUR 202 million to EUR 237 million).
During the examined period, similarly to previous years, the second most important source of food products imported by Poland was the Netherlands with the purchased goods worth approximately EUR 385 million. A negative turnover balance with this country was reduced from EUR -103.6 million to EUR -54.6 million. In the first half of 2009, supplies from the Netherlands constituted 9% of the total value of Polish import of agricultural and food products. The third largest supplier of this group of products to Poland, in the analysed period, was Spain, which traditionally exported fresh vegetables and fruit to the Polish market. A negative turnover balance with this country decreased from EUR -241.8 million to EUR -165.3 million. Spain’s share in the value of purchased agricultural and food products totalled 7% (EUR 286 million).
The fourth most significant source of agricultural and food product supplies to Poland and at the same time the first market outside EU, during the first six months of 2009, was Argentina with a 5% share in the total value of Poland’s agricultural and food import (EUR 226 million). Soy grain, a component necessary to produce fodder, was the most important product imported from Argentina,
followed by citrus fruit, peanuts, maize and fish. Moreover, the top ten biggest suppliers in the examined period included Denmark (5%, EUR 214 million), France (4%, EUR 171 million), Italy (approx. 4%, EUR 169 million), the Czech Republic (approx. 4%, EUR 167 million), China (3.2%, EUR 136 million) and Great Britain (2.8%, EUR 122 million).
Value of Polish exports
According to the data collected by the Ministry of Agriculture and Rural Development, foreign trade turnover with agricultural and food goods in the first six months of 2009 amounted to EUR 14,879 million and was lower by 8.0% than in the corresponding period of 2008, mainly because of a fall in imports. Meanwhile, turnover expressed in PLN increased by 16.7% and amounted to PLN 65,114 million. The exchange rate differences had an influence on this situation.
During the first three quarters of 2009, the value of foreign sale of Polish agricultural and food products totalled EUR 8,289 million and fell by 3.7% in relation to the corresponding period of 2008 (if expressed in PLN, it rose by 22.2% and amounted to PLN 36,279 million).
The sales value to the European Union (all 27 member states) reduced by 5.2%, including only by 3.0% in the case of the “old” EU members, and by 10.9% in the case of the 11 “new” member states. In total, Polish goods were sold to the EU market (EU-27) for an amount of EUR 6,626 million. Within the structure of agricultural and food export, supplies to EU-27 dropped from 81.2% in the period from January to September 2008 to 79.9% in the corresponding period of 2009.
The value of exports to the Commonwealth of Independent States totalled more than EUR 754.5 million, which meant an increase by 4.9% in relation to the corresponding period of 2008. The sale to the Commonwealth of Independent States constituted 9.8% of the total exports value and did not change in relation to the previous year.
During the first half-year of 2009, the biggest number, i.e. more than 22%, of Polish agricultural and food products – worth some EUR 1,853 million – were sold to Germany, which meant a decline by 9.7% in relation to the previous year. Great Britain was ranked second with exports worth EUR 571 million (a drop by 7.3% and a share of 6.9% in total exports). Further places among dominating recipients were occupied by the Czech Republic (EUR 548 million), Italy (EUR 523 million) and the Netherlands (EUR 494 million), all with shares oscillating between 6.0% and 6.6%. France was ranked sixth and the Russian Federation seventh. The value of sales to these two countries amounted to EUR 425 million and EUR 420 million respectively.
The both countries’ shares in exports were the same and totalled 5.1%. As compared to the period from January to September 2008, the value of exports to the Russian Federation rose by 23%. Such a considerable increase was mainly a consequence of increased, as compared to the previous year, exportation of fresh apples and pigs. Moreover, Italy and France recorded a very high increase of exports amounting to 25% and 21% respectively. The level of sales to these two countries was mainly influenced by increased export of cigarettes. In total, some 58% (in terms of value) of all agricultural and food products exported abroad in the first three quarters of 2009 were delivered to all of the above-mentioned countries.
The most profitable products
From January to September 2009, the sales of the following products dominated in terms of value: cigarettes, beef, poultry, chocolate, bakery and confectionery products (biscuits, wafers, etc.), cheese, sugar syrup, wheat, fruit juice (mainly apple juice), frozen fruit, pork, smoked fish (mainly salmon), fresh apples, processed and canned fish. The said goods had a share of approximately 50% in the total value of agricultural and food export. Among the group of products most often sold abroad, the biggest increase in sales value was recorded in the case of wheat (by more than 6 times), fresh apples (more than twice) and cigarettes (by 51%). Meanwhile, the value of exported sugar dropped by 47%, powdered milk by 43%, pork by 37%, fruit juice (mainly apple juice) by 29% and cheese by 25%.
During the first three quarters of 2009, Poland imported agricultural and food products for a total amount of EUR 6,590 million, which meant a drop in imports value by 12.9% as compared to the corresponding period of 2008. For comparison, the value of imports expressed in PLN increased by 10.4% and amounted to PLN 28,835 million.
Within the European Union, Poland imported goods for a total sum of EUR 4,668 million, which meant a decline by more than 12.4% in relation to the previous year. The share of imports from the European Union member states constituted 70.8% of the total value if imports (70.4% the year before). The value of purchases from the 11 countries which joined the EU after the 1st of May 2004 dropped by 24.6% and totalled some EUR 619 million.
As compared to the corresponding period of 2008, the value of imports from the Commonwealth of Independent States amounted to EUR 160 million and fell by 22.6% achieving a share of 2.4% in the total value of import (2.7% the year before).
Agricultural and food products were imported to Poland from Germany (22%), the Netherlands (8.7%), Spain (5.8%), Argentina (5.4%) and Denmark (5.1%). Moreover, the following countries had a considerable share in products importation to Poland: Italy, France, the Czech Republic and China. Purchases from the above-mentioned countries constituted almost 63% of the entire value of Polish import of agricultural and food goods.
Poland’s most important imports
In terms of value, the most important products imported to Poland in the first half-year of 2009 were pork, soy oilseed cakes, other food products, fish fillets and fresh fish, coffee, unprocessed tobacco, chocolate, citrus fruit, animal fodder as well as animal intestines. Pork was mainly imported from Germany and Denmark, whereas soy oilseed cakes from Argentina. The import value of the above-mentioned products constituted 40% of the total import of agricultural and food products to Poland.
Among goods of substantial share in import, purchases of sugar increased by more than 2 times, unprocessed tobacco by 50%, coffee by 33% and pigs by 47% as compared to the previous year. Meanwhile, the importation of wheat (by 77%), maize (by 69%), grapes (by 32%), citrus fruit (by 26%) and animal fodder (by 21%) decreased significantly.
In the period from January to September 2009, the trade balance was positive and amounted to EUR 1,699 million, which meant an increase by 63.9% as compared to the corresponding period of 2008 (plus EUR 1,037 million).
The balance in the trade with EU member states was also positive and totalled EUR 1,959 million. For comparison, trade balance in the period from January to September 2008 amounted to EUR 1,664 million.
Poland recorded the highest positive balance in trade with Russia (EUR 393 million), Great Britain (EUR 388 million), Germany (EUR 384 million), the Czech Republic (EUR 295 million) and Italy (EUR 240 million).
Meanwhile, imports were considerably higher than exports, and thus the balance was negative in the case of trade with Argentina (EUR -355 million), Spain (EUR -194 million) and Denmark (EUR -151 million).
Export to the East
Thanks to a very high supply of Polish fruit and due to a stabilised situation of Polish exporters taking the phytosanitary requirements dictated by Russia into account, a record increase of deliveries to the East was noticed during the first six months of 2009. The share of this group of countries in the total export of fruit from Poland amounted to 80%. During the first six months of 2009, Poland exported 530,500 tons of fruit to the East for a total amount of EUR 161.1 million. For comparison, only 124,100 tons of fruit worth EUR 20.1 million were exported to the same countries in the first half-year of the previous year. In the case of deliveries to the Commonwealth of Independent States, the export was dominated by apples (nearly 490,000 tons).
Ordinary apples were the most important product in the exportation of Polish fruit. Their sale constituted nearly 91% of the entire export of fruit in the first half of 2009. Soft fruit, including sour and sweet cherries, was the second most important product group in terms of volume with exports volume reaching 24,000 tons. The value of apples amounted to almost EUR 170 million, whereas in the case of soft fruit, including sour and sweet cherries, it totalled EUR 20.9 million.
After European Union member states, the countries belonging to the Commonwealth of Independent States were the second largest market for vegetable products as they imported in total about 27% of Polish vegetable products exported. During the first six months of 2009, the volume of purchases was only 15,000 tons smaller than in the previous year and amounted to 87,200 tons worth nearly EUR 56.0 million.
In the first half-year of 2009, the export of Polish processed vegetables was dominated, similar to previous years, by frozen products, whose sales volume reached 181,200 tons (a 57% share in the total exportation of Polish vegetable products). Year to year, the importance of frozen vegetables mixtures, as well as frozen cabbage vegetables or leguminous vegetables increases. Moreover, foreign markets are particularly interested in Polish pickled products and dried vegetables, although Polish producers sold more than 9,000 tons of the latter products abroad in the first half-year of 2009, which means less than the year before. Fewer vegetables preserved in vinegar were exported abroad – more than 15,500 tons dominated by dill pickles, sweet paprika and vegetable mixtures. More marinated mushrooms were sold in the first half of 2009 as compared to the previous year – by more than 10,000 tons, and slightly more canned vegetables (nearly 30,000 tons).
Export of sugar to the Commonwealth of Independent States plummeted. During the first six months of 2009, only 3,100 tons of sugar were sold, which meant a decrease by 96%! Exportation to Russia, one of the most important recipients of Polish sugar in previous years, fell by 88%. Sugar export to Uzbekistan, Tajikistan, Turkmenistan and Kazakhstan, which were also very important markets for Polish sugar, stopped completely. The prices of exports to the Commonwealth of Independent States were considerably lower than in the case of products delivered to the European Union. In a situation when due to quota production reduction the supply of Polish sugar was significantly limited, the volume that could have been exported was delivered to the markets that offered better prices.
The export of dairy products to the Commonwealth of Independent States, mainly to Russia, fell by almost a half (to EUR 12.4 million). The pace of butter exportation reduction to Russia, which is the leading importer of this product in the world, accelerated. Only 400 tons of butter for EUR 0.83 million were sold there, which meant a decrease by 70-77% in relation to the first half-year of 2008. Polish producers are losing a very important market, which back in 2006, was the most important place of butter exportation.
From January to June 2009, Poland exported 25,900 tons of fresh, chilled or frozen pork to the Commonwealth of Independent States, i.e. nearly 41% less than the year before. These countries’ share in the total export of pork from Poland oscillated at about 34%. The decline of exports to the East was mainly caused by reduced deliveries to Ukraine due to the fact that the European Union suspended the use of export refunds in the case of pork trade with third countries. The European Union introduced these subsidies at the beginning of 2008 and it was possible to make use of them until August of the previous year. Suspension of refunds triggered a declining trend in the Polish export of pork to the East, which has continued since the fourth quarter of 2008. Export looks bad also because of the effects of the financial crisis worldwide. In the first half of 2009, Poland exported only 60 tons of fresh or chilled pork to the Commonwealth of Independent States (only to Russia) and 2,300 tons to the countries applying to be part of the Community. Among the applying countries, the biggest amounts of fresh or chilled pork were exported from Poland to Macedonia (1,800 tons) and Croatia (nearly 475 tons). Among all other countries, most of fresh or chilled pork was exported from Poland to Kosovo (about 650 tons). In the first half of 2009, Polish export of sausages to the Commonwealth of Independent States reduced by 25% and totalled 800 tons altogether (including more than 700 tons to Azerbaijan). These countries’ share in the entire Polish export of sausages in the first half of 2009 oscillated at nearly 5%.
Despite lifting the Russian embargo on Polish meat and poultry, the supplies to the Russian market in the first half-year of 2009 were still insignificant (0.2% of export value). Poland exported only cheaper and lower-quality meat to Russia – frozen chicken pieces and giblets. The problem with adjusting Polish veterinary certificates to the requirements in force was one of the reasons for the low level of export. Moreover, Russia limited poultry importation from other countries in 2009 wanting to focus on domestic production. In the period from January to August 2009, Russia imported 26.5% less poultry than the year before. The import decline was caused by the reduction of duty free quotas, higher duties in the case of exceeding quotas, restrictions concerning plants approved for exportation to the Russian market, import bans in connection with the H1N1 virus, financial problems of traders and weak position of domestic currency.
Meanwhile, the Community’s share in the importation of alcohol from Poland remained at a stable level of 55%.
Maja Święcka
