Domestic market 'driving force' for Polish pork

In the past few week the Polish press has reported that sales of a range of meats, including ham and pork loin had rocketed following accession to Europe, as 'old' EU countries capitalised on competitive pricing. According to Eurostats Poland was the fourth biggest producer of pork in Europe - behind Spain, Germany and France. This, combined with the fact that the country now has substantial production capacity, leads many industry observers to believe there is a strong future for pig farming and processing in the country.

But not everyone agrees with this prognosis. Animex​ is currently one of the country's leading producers of pork. In a market that is still highly fragmented it has captured a 10 per cent slice of white meat sales and 5 per cent of red meat sales. Bought five years ago by American giant Smithfields Foods for €51.2 million, the company aims to establish itself as a dominant supplier of meats in Europe and other parts of the globe.

"Right now there is a shortage of pigs in Poland,"​ said Lidia Zalewska, spokesperson for Animex. "It takes time to built up livestock, but it is definitely taking place as pig farming is proving to more profitable right now."​

During the past few years pig farming in Poland has been hard hit by economic uncertainty, the transition to European Union and the reshaping of exports markets. In the late 90s a series of commercial agreements between Poland and Russia were ended. This led to the virtual collapse of pork exports to Russia, which until then had been by far the biggest market outside Poland. Exports of processed pork fell from a peak of 159,674 tons in 1997 to just 1,656 tons in 2002.

As the Russian meat market has now liberalised, pork producers from all over the world, including Brazil, the UK and Germany, have been racing to increase their trade in the country. This has led Polish pork producers to face the reality that the huge stronghold they once had on the Russian market is gone forever.

"Although the Russian and German markets continue to be important export destinations, what really drives the Polish pork sector is the domestic market,"​ said Loes Cerdan, general manager for Prima Farms, a leading supplier to Animex. "Poland has a population of 40 million, the biggest in central Europe, and it is has a very high rate of pork consumption. I believe that it is the domestic market that will continue to be the driving force for pig production in this country."​

Poland currently has the eighth highest consumption of pork meat in the world and the fifth highest in Europe. According to MHR Viandes, the average Pole consumed 48.1 kgs of pork in the year 2002, which compares favourably with the 39.5 kgs consumed per capita in the EU-15 countries.

"Although Polish meat prices are still relatively competitive in Poland, I believe that as the market evolves prices will level off with those in the rest of the Europe and other international markets. This means that the driving force of the industry will be the domestic market. Germany and Russia will always be significant export markets, simply due to the fact that Poland shares common borders, but as these are both very liberal and very competitive market environments, Polish producers will find it difficult to make significant gains there."​

Following an initial sharp increase in exports after accession, pork prices in Poland are already starting to level off. If Cerdan and other industry experts are correct that will mean the beginning of a more stable time for the industry and an increasing emphasis on the domestic market.