The European Union is one of the biggest producers and exporters of poultry in the world. Its high position on a global scale results from many years of reorganisation and development of this sector that were based on implementation and maintenance of high standards and integrated systems of production on the territory of the whole Community. These reforms directly translate into a growing dynamics in terms of production and exports of European poultry meat, but also into high quality of products and the level of satisfaction of final consumers.
Current statistical data confirms the activity of poultry production sector of the European Union. In 2015 the level of poultry production increased by around 2.6% in comparison with 2014. From the forecasts of the European Commission, on the other hand, it stems that in the first half of 2016 production of poultry in the UE increased already by 6% per year. According to the forecasts for the whole 2016 it is expected that there will be an increase of 4% in terms of production when compared with the previous year, which is about to reach14.3 million tons. Expansion of the poultry sector can be explained with relatively low prices of animal feed. On the other hand, when it comes to 2017, the EU poultry production will be less dynamic – it is about to increase by 1.2% when compared with the previous year, and it will reach 14.5 million tons.
The European Commission estimates that throughout 2016, an average consumption of poultry per one citizen of the EU reached probably 26.8 kg and it was by 3% higher than in 2015. However, it is expected that in 2017 consumption of poultry in the EU will increase to a smaller extent, that is only by 1% to reach 27.1 kg, when compared with 2016. It is caused by a growing saturation of the market.
Taking the above mentioned forecasts into consideration, it is worth to take a closer look at the markets of the Middle East, Asia and Sub-Saharan Africa, which show a great interest in poultry meat from the countries of the Community. According to the forecasts of the European Commission, global demand for poultry from the EU countries will successively grow.
Source: Analysis of chosen issues and tendencies in Polish production and trade regarding foreign agri-food products in the first half of 2016. Foundation of Assistance Programmes for Agriculture (FAPA), Foreign Agricultural Markets Monitoring Unit (FAMMU).
For the countries of the European Union, Vietnam is one of the most prospective markets in terms of cooperation, where in 2014 alone the economy noted increase of 6%, and GDP per capita – increase of 4.8% . In 2015 the GDP had increased the most in 5 years – by 6.68%. Vietnam is currently one of the most rapidly growing economies of the south-eastern Asia, and its imports increased by 12% in 2015. The country with a population that consists of over 94 million people is successively educating purchasing power that is becoming more and more numerous and buoyant.
Conclusion of free trade agreement between the EU and Vietnam, that will be in effect at the beginning of 2018, also has a great significance for their economic cooperation. This agreement involves elimination of 99% of payments charged for mutual transactions during a period of 10 years for Vietnam and of seven years for the EU. Taking the dynamic development of Vietnam into consideration, this country is becoming more and more interesting exports market also for poultry. Due to intensively growing consumption and slow development of local production of poultry, excess demand emerges, which more and more frequently offers a chance for competing European companies.
According to the USDA’s estimates, in the recent years, between 2002 and 2012, poultry consumption rose by 79%: According to the USDA’s forecasts since 2012 the pace of consumption may increase by as much as 37% by 2021. During that same time, overall local poultry production is expected to rise by 27% , and the volume of imports – by as much as 49%.
Description of the chart: Volume of exports from the European Union to Vietnam in 2015
USDA, Economic Research Service 2012 International, long-term projections until 2021;
USDA, Foreign Agricultural Service, official estimates of the USDA; Vietnamnet Business.
Economy of China is one of the fastest developing global economies, with an annual GDP growth rate of 7.5-9%. Due to that, since 2004 till 2014, GDP per capita increased from the level of 1 564 USD to 3 583 USD, and according to the forecasts of Trading Economics it will increase to the level of 15 556 USD in 2020.
Intense demographic changes – growth of population and pace of urbanisation, but also increase of incomes, development of transport and retail trade influence intensification of international cooperation, including trade exchange in the poultry sector.
According to the report of the USDA (U.S. Department of Agriculture)  demand for poultry in China was about to reach 12.7 million tons in 2016. USDA also predicts that the level of local poultry production in China is about to decrease by approx. 5%. This outcome combined with a growing purchasing power of Chinese people results in a growing interest in imports and consumption of foreign poultry. According to the USDA, China might have increased its imports of poultry in 2016 by 31% when compared with 2015 (to reach 350 thousand tons). In 2017, on the other hand, it may increase by 79% (also when compared with 2015) and amount to 450 thousand tons. The analysis provided by FAO show that in 2025 Chinese imports of poultry will reach 530 thousand tons . This indicates that trade with the Middle Kingdom is going to pay off. Such information means a chance to expand the scope of cooperation in the poultry sector for producers from the European Union, who in the recent years have observed successive growth of exports.
Description of the table: Volume of exports from the European Union to China in 2015
Hong Kong despite its small surface of 1103 square kilometres is considered a perfect example of a liberal economy characterised by free flow of information, people, goods and money, where services make up 92% of GDP. Hong Kong is also an Asian logistics and maritime hub – a leader in the international air transport and one of the key global container ports.
Overall population of Hong Kong is estimated at 7 million citizens, who are characterised by strong a purchasing power background. Tourist sector is also developing dynamically. Currently it offers over 15 000 restaurants and facilities, which in 2014 alone, were visited by 61 million tourists. Due to the dynamic demographic situation and attractive conditions for commercial exchange, Hong Kong takes the lead in terms of imports of food products. As much as 95% of food products come from other countries, 90% of which are destined for re-exports.
Market needs also relate to poultry meat, consumption of which in 2014 amounted on average to 37.7 kg per person. These days, Hong Kong is already one of the key recipients of EU poultry, next to the Republic of South Africa and Saudi Arabia. Increase in exports of poultry from the EU to Hong Kong in the first 7 months of 2016 was one of the highest in the last few years and it amounted to 33%. The European Commission assumes positive forecasts regarding exports to Hong Kong also for the following years. Estimated increase in exports of poultry from the UE between 2014 and 2024 is expected at 24%, to reach 1.6 million tons. Mainly the countries of Middle East, African and Asian countries (especially China and Hong Kong will be among its recipients.
UNITED ARAB EMIRATES
Commercial exchange with foreign countries plays the key role in the economic development of the United Arab Emirates. In this country, that has a population of approx. 9 million people, exports permanently makes up around 70%, and imports over 51% in relation to GDP. In the case of economic cooperation with the European Union, according to the situation in 2015: value of imports from the territory of the EU is over 5 times bigger than the exports of the UAE (exports from the UE – 42.8 billion EURO, imports from the EU 8.1 billion EURO).
Overall production of poultry in the United Arab Emirates reaches the level of 43 000 tons, but the production sector faces serious challenges that involve need for modernisation and fighting against diseases. In this context, the offer of European producers, who comply with the quality requirements of the UAE, is an answer to the demand in the poultry sector, especially because according to research and analysis of Food and Agriculture Organisation of the United Nations imports in 2016 was expected to be bigger than in the previous year. The overall level of imports of poultry in the UAE in 2014 reached 360.000 tons, 365.000 tons in 2015 and 370 000 tons in 2016. It can be linked to increasing consumption in the recent years, which in the UAE, according to OAA Estimates and International Trade Centre Data annually increases by 1% and similar increase is expected in the upcoming years.
With prospects for successive growth of population, development of tourist industry and the HORECA sector (almost 75% of imported poultry is consumed within the gastronomy sector), the UAE market is one of the most promising outlet markets for imported poultry.
Description of the table: Volume of exports of poultry from the European Union to the United Arab Emirates in 2015
Sources used in the bookmark:
- OECD-FAO report: 2014-2023 Agricultural Outlook
- USDA, Economic Research Service 2012 International , long-term projections until 2021;
- USDA, Foreign Agricultural Service, official estimates of the USDA; Vietnamnet Business.