This report covers the market developments in FY 2013, H1/2014 and the data available as of July 2014.
The Polish food sector posted good performance in 2013 and H1/2014, both in terms of production and foreign trade, despite certain segments facing difficulties. Exports of agri-food products increased at double-digit annual pace to EUR 19.9bn in 2013, propped by relatively high food prices and favourable market situation after the 2013 harvest.
The cereal crop production declined by 0.6% y/y in 2013, partially on high base comparison, yet average yields stood at 3.84 tonne per ha, above the 3.73 level in 2012, market data show.
Sugar output diminished y/y in 2013 and further in H1/2014, as the area cultivated with sugar beet also decreased over the period. Consumption coming from households has also been shrinking, yet on the upside, external demand and demand from the food industry continues rising. Accordingly, the Polish confectionery market recorded 1.5% y/y advance in value terms in 2013 and is expected to continue growing in the coming years.
Milk production declined marginally on an annual basis in 2013, yet overall the segment performed well. The profitability of milk processors improved y/y, propped by higher sales volume, higher prices and favourable conditions on the global market, even though the cost of raw materials continued to increase last year.
Meat output volume decreased marginally y/y in 2013, after having stagnated on an annual comparison in 2012. The steepest drop was recorded in pork production and the segment will predictably face further challenges in 2014, considering the ban on pork imports introduced by Russia as of end-Jan 2014.
• Agri-food export performance in 2014 may be affected by unstable situation in Eastern Europe
• Food consumption expected to start picking up in 2014, after two-year stagnation
• Lower sugar beet crops drive downwards sugar output in 2013, H1/2014
• Sugar household consumption declines, but demand coming from food industry rises in 2013
• Pork output forecasted to recover in 2014, yet segment to be affected by import ban
Table of Contents
Executive summary 5
Overview – Structural 6
Global food prices inch down 2.4% y/y in H1/2014 6
Domestic food prices rise 0.6% y/y in H1/2014 7
…but remain lowest in Europe 7
Gross agricultural output rises slightly y/y in 2013 8
Agri-food export performance in 2014 may be affected by unstable situation in Eastern Europe 10
Food consumption expected to start picking up after two-year stagnation 11
Cereal output shrinks 0.6% y/y in 2013 11
Cereal prices slightly decline after 2013 harvest 13
Crop product exports growth dynamics tempers in 2013 13
Eurosnack’s results in Q1/2014 affected by strong competition, high production costs 14
Muesli producer Sante mulls acquisitions 14
Sugar & Confectionery 15
Sugar beet production diminishes y/y in 2013 15
Lower sugar beet crops drive downwards sugar output 15
Sugar household consumption declines, but demand coming from food industry rises in 2013 16
Ice-cream market value up 5.4% y/y in 2013 16
Confectionery market reaches PLN 12.7bn in 2013, has good growth prospects 16
KSC privatisation talks near final deciding phase 17
Wawel to invest EUR 19mn in new factory 17
Nestle Polska to build pet food production plant, distribution centre near Wroclaw 18
Milk production declines, on lowering number of dairy cattles, but milk market performs well 19
Dairy product output posts mixed results in 2013, H1/2014 19
Dairy foreign trade improves y/y in 2013, despite declining export volumes 20
Dairy consumption rises y/y in 2013, butter consumption remains stable 20
Mlekpol to invest EUR 31mn in new milk processing plant in Mragowo 21
Mlekovita to set up two dairy farms in Russia 21
Spomlek to start construction of new production lines in 2014, mulls acquisitions 22
Meat production volume down y/y in 2013 22
Pork output forecasted to recover in 2014, yet segment to be affected by import ban 23
Processed meat segment remains stable 24
Indykpol to focus on development of current capacities, cost cutting 24
PKM Duda considers selling beef assets 24
Danish Crown acquires remaining 50% stake in meat processor Sokolow 25
Release Date: Thu, 31 Jul 2014