The European Union is one of the largest poultry producers and exporters in the world. Its strong global position is a result of many years of reorganisation and development of the sector based on implementation and maintenance of high standards and integrated production system within the European Community. Such reforms have contributed directly to the growing dynamics of European poultry production and export, as well as to the high quality of products and satisfaction of end consumers.
Current statistical data show the activity of the poultry production sector in the EU. In 2017, the level of poultry production rose by 1% as compared to 2016 despite difficulties related to the outbreaks of highly pathogenic avian influenza in the EU at the turn of 2016 and 2017. According to the European Commission, this trend will be maintained for another year, staying at the stable growth level above 1%. Similar results have been achieved in EU poultry export. In 2017, export from EU states also rose by 1% reaching 1.663 million tons. Most interest in EU poultry can be observed in the Middle East, Asia and sub-Saharan Africa. According to the European Commission’s forecasts, demand for EU poultry will continue to grow.
Graph 4.14: Poultry meat market development dynamics in the European Union
Source: EU Agricultural Outlook for the Agricultural Markets and Income 2017-2030
Table: Poultry export volumes in the European Union
Source: Eurostat, DG Agri Dashboard: poultry meat
Diagram: Main producers on the EU poultry market
Source: DG AGRI Dashboard: poultry meat; last updated 11.04.2018
Vietnam is one of the most prospectus markets for cooperation with EU states, as in 2016 alone the sector achieved a 7.5% growth, with a 6.2% increase in GDP per capita. The country with over 94.5 million residents offers continuously growing purchasing power. Another important aspect of economic cooperation was the conclusion of a free trade agreement between the EU and Vietnam which came into effect at the start of 2018 and which eliminates 99% of all charges imposed on mutual transactions within the period of over 10 years for the EU and seven years for Vietnam. Taking into account its dynamic development, Vietnam is becoming an increasingly interesting export market for poultry. Due to dynamically growing consumption and unrestrained development of local production, an excess in demand is created, which gives competitive European businesses increasing opportunities. OECD estimates that poultry consumption in Vietnam will grow from 14.4 kg/pp/year in 2016 to over 17.6 kg/pp/year in 2025. According to OECD’s forecasts, average annual consumption growth in the next ten years will reach 4% while local production will grow on average by less than 2%. This means that the remaining demand will need to be satisfied by growing import, whose annual growth rate is estimated to reach at least 5% over the next 10 years.
Table: Poultry export volumes from the European Union to Vietnam between 2015-2017
Diagram: Poultry production, import and consumption forecasts for Vietnam until 2021
Sources: USDA, Economic Research Service 2012 International, long-term forecasts up to 2021; USDA, Foreign Agricultural Service, official estimates by USDA; Vietnamnet Business.
Chinese economy is one of the fastest growing economies in the world with the annual GDP growth rate of 7.5-9%. This means that GDP per capita grew between 2006 and 2017 from USD 2,111 to USD 8,583 and according to Trading Economics forecasts it will reach USD 12,543 in 2021. Dynamic demographic changes – growing population and urbanisation rate, as well as growing revenues, development of transport and retail – contribute to intensifying international cooperation, including trade exchange in the sector of poultry production.
According to forecasts by the United States Department of Agriculture (USDA), after the drop in poultry production rates in 2017, meat production in China in 2018 will grow by 700 tons to reach 11.7 million tons. Poultry consumption in China will grow in 2018 thanks to regaining consumers’ trust in domestic poultry. However, according to USDA’s forecasts, import of poultry to China in 2018 will drop to 300 thousand tons due to reduced supply by the largest exporter, i.e. Brazil, responsible for 85% of deliveries. There is also still a ban on poultry export from the EU. The Chinese market was closed to EU poultry due to outbreaks of highly pathogenic avian influenza in Europe at the turn of 2016 and 2017. But importantly, the virus subtype found in Europe was different from the virus subtype found in poultry in China, therefore, it was not a threat to humans. However, this season the number of bird flu’ outbreaks in the European Union was much lower, while in Poland, which is the largest supplier of poultry to China among European countries, the last outbreak of bird flu’ was reported in March 2017.
Table: largest exporters of poultry to China:
Table: Poultry export volumes from the European Union to China between 2015-2017
Despite its small area of 1103 km2, Hong Kong is considered an excellent example of liberal economy with a free flow of information, people, goods and capital, with services corresponding to 92% of GDP. Hong Kong is also the Asian logistics and marine transport hub – the leader in international air transport and one of the leading container ports in the world.
The total number of people living in Hong Kong is estimated at 7 million, with a strong purchasing power. The tourism sector is also developing dynamically, currently offering over 15,000 restaurants and other establishments visited by 58.5 million tourists in 2017 alone. Due to dynamic demographic development and attractive trade conditions, food import dominates in Hong Kong. 95% of food products originate from other countries, 90% of which are intended for re-exportation.
There is also market demand for poultry, with average consumption at the level of 39.7 kg per person in 2017. Hong Kong is currently one of the key recipients of EU poultry alongside Saudi Arabia and Ukraine. According to the European Commission’s forecasts the situation will not change in coming years. An important aspect of EU-HK trade relations is that veterinary services from Hong Kong recognise regionalisation with regard to avian influenza. Therefore, in case of outbreaks of highly pathogenic avian influenza in the EU, HK authorities do not impose a ban on export from the entire country, only from the given administrative unit.
Table: Poultry export volumes from the European Union to Hong Kong between 2015-2017
UNITED ARAB EMIRATES
Foreign trade plays a key role in UAE’s economic development. The country has around 9 million residents. With regard to GDP, export constantly constitutes around 70% and import over 51%. In case of economic cooperation with the European Union, the value of import from the EU is more than five times higher than UAE export (for instance in 2016 EU-UAE export reached EUR 45.8 billion while import from UAE reached EUR 9.2 billion).
The poultry market in the United Arab Emirates shows slight constant growth. In 2017 domestic poultry production reached 47,000 tons, which constitutes a more than 2% growth in comparison to the previous year. According to estimates by the American Department of Agriculture poultry production in 2018 will remain at a level comparable to 2017, as there are no plans to open new nor expand existing farms or plants. In that context, products offered by European producers which meet the UAE’s quality requirements can help meet the demand in the poultry sector. The UAE’s total poultry import in 2017 reached around 315,000 tons, and according to the American Department of Agriculture (USDA) it will grow to around 370,000 tons in 2018.
Taking into account continuous population growth, development of tourism and the HORECA sector (nearly 75% of imported poultry is consumed in the catering sector), the UAE market is one of the most promising target markets for imported poultry.
Table: Poultry export volumes from the European Union to United Arab Emirates between 2015-2017
Sources used in the tab: