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Agribusiness in Poland

We continue to be very positive about the prospects for Polish agriculture over our forecast period. Unlike some of its EU peers, we expect to see growth in production of nearly all commodities surveyed in this report. Outperformers are set to include rice, sugar, corn, poultry and beef, all of which are set to show strong growth buoyed by consolidation and modernisation of Poland's agricultural facilities.

Key forecasts

- Milk production in 2010/11 to increase 0.72% year-on-year to 12.69mn tonnes, as consolidation gathers pace and efficiency rises.
- In 2010/11, rains have delayed sowings of winter wheat, with some effect on yields. Production to come in at 9.5mn tonnes, down 3.0% y-o-y. Similarly, barley production to fall to 3.54mn tonnes from 3.98mn the previous year.
- Unlike other countries, Poland's grain supplies are plentiful and feed prices remain low. In 2010/11, we forecast a 5.3% increase in poultry production to 1.40mn tonnes. Pork production expected to rise 0.97% y-o-y to 1.60mn tonnes, with beef to see a 3.7% y-o-y gain to 423,000 tonnes.
- Increasing interest in healthy eating and Asian cuisine should boost rice demand. Consumption should rise 2.5% y-o-y in 2011 to reach 104,800 tonnes. Over our forecast period to 2015, we expect consumption to show strong growth, increasing 31.9% to reach 134,900 tonnes.
- Drought in India has sparked a spike in sugar prices. Polish farmers next season will take advantage of the windfall, planting more sugarbeet. In 2010/11, production to rise to 10.2mn tonnes, up 15.6% year-on-year.

Industry developments

In December the EC released its proposals for dairy industry reform, having considered the High-Level Group's recommendations. The measures would allow for written contracts between milk producers and processors. The EC also proposed to allow producers to negotiate collectively with dairies, in effect forming a cartel. The measures should give farmers more bargaining power and stabilise prices, allowing them to plan more effectively. We are watching developments closely.

The same month, EU health ministers voted in favour of extending compulsory labelling of agricultural produce to cover lamb, pork and poultry. Nevertheless, BMI believes the legislation, should it be adopted, will bring benefits to Polish pork and poultry producers. Many consumers will favour buying Polish products over, say, imports of Thai and Brazilian poultry.

The EC is considering relaxing the rules on feeding animals to animals. The proposals, should they be implemented, will have positive effects for the livestock industry across the EU, including Poland. At a time when feed costs are starting to rise in response to soaring grain prices, allowing certain types of animal feed should help to push margins back in the right direction.

by S. C.
04 february 2011, World News > Europe