Covid-19 pandemic costs Polish poultry export dearly

29-10-2020 | | |
Polish poultry producers are keeping volume up, but aren t able to make prices on their export markets. Photo: Michel Zoeter
Polish poultry producers are keeping volume up, but aren t able to make prices on their export markets. Photo: Michel Zoeter

In January-July of 2020, Polish poultry companies lost PLN 675 million (US$?173 million) on exports due to the continuing coronavirus pandemic.

This is estimated by the Polish National Chamber of Poultry and Feed Producers. The fourth quarter of the year is expected to be even worse. Overall losses are expected to climb to PLN 1.5 billion (US$ 386 million) by the end of the year.

The biggest issue Polish poultry producers faced was a sharp decrease in orders from the hospitality sector. Analysts explained that for years, Polish meat found its way into the European hospitality sector. “Someone with limited insights into the current situation might say that the coronavirus pandemic only caused minor damage to the Polish poultry industry. From January to July, exports of poultry meat, in physical terms, fell by only 3.7%. Looking at foreign export from a monetary point of view, however, losses turn out to be more than 10%,” Katarzyna Gawrońska, director of the National Chamber of Poultry and Feed Producers told local press. “The real drama can be seen when comparing this year’s and last year’s revenues from foreign sales. The revenues poultry companies generated were € 151 million (US$ 173 million) less than last year. Lower sales in combination with drastically reduced sales margins really hurt the industry,” she added. According to Gawrońska, Polish poultry farming is characterised by a very high degree of inertia, meaning most companies have a minimal ability to adapt to changing conditions and, for example, to limit production in case of decreasing demand.

Polish poultry industry is ready to grow again
The Polish poultry industry is recovering from a devastating 6-month period.

Maintaining production

“The current situation perfectly demonstrates the strategy that dominates the Polish poultry industry. It is about maintaining high production, which means that the only possibility of an effective sale is a significant reduction in prices. We are concerned that this approach will only work in the short term. In the long run, this modus operandi will lead to extremely negative results,” Gawrońska warned.

In January-July of 2020, Poland exported poultry meat with an overall value of € 1.346 billion (US$ 1.576 billion). In physical terms, export equalled 822,000 tonnes, 32,000 tonnes less than during the same period of the previous year. In 2019, the Polish poultry export value reached € 3.1 billion (US$ 3.4 billion). The biggest importers of Polish poultry were Germany (15%), the United Kingdom (8%), the Netherlands (8%), France (6%), and the Czech Republic (5%). Nearly 29% of poultry exports were sent to markets outside of the EU Customs Union.

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Vladislav Vorotnikov Eastern European correspondent