Bord Bia’s Export Performance and Prospects Report has found a 4% increase in exports for 2014 to reach a record high of almost €10.5 billion in Ireland.
In 2014, worldwide exports grew by 4%, representing an expansion of 45% or €3.2 billion (US$3.71 billion) since 2009, according to Bord Bia’s Export Performance and Prospects Report.
The strongest performing sectors were dairy product and ingredients which exceeded the €3 billion mark (+3%), prepared foods (€1.8 billion, +8%) and seafood (€540 million, +8%).
Chief executive Aidan Cotter highlighted the significant shift in the destinations for Irish exports in 2014 with international markets showing renewed growth, reflected in a 15% increase in trade to stand at €3 billion or 29% of total food and drink exports.
“The industry’s drive to broaden export reach to destinations outside of the European Union (EU) is paying dividends with growth in emerging and international markets now driving export figures, offsetting the limited growth in our established premium EU markets” he said.
This shift in market destination was marked by increases in the value of exports to Asia to reach €850 million (+45%) as well as significant increases to North America (€740 million, +18%), the Middle East (€330 million, +11%) and Africa (€610 million, +9%). Within this, China recorded a further increase of almost 40% to reach approximately €520 million. China is now Ireland’s second largest export market for dairy, compared to 13th in 2008.
While it remains Ireland’s most significant export market, the share of exports destined for the UK eased slightly though the value showed little change at €4.2 billion or 40% of export share.
Stronger export values for beverages, prepared foods, mushrooms and poultry helped offset lower beef and dairy values.
The value of exports to other EU destinations grew by 2% to reach €3.3 billion equating to 31% of total exports reflecting largely static consumer price inflation across the Eurozone.
Ireland`s exports benefited from the effects of a weak euro against sterling and the US Dollar, however a strengthening euro against the Russian Rouble combined with trade suspensions had a significant negative impact on Irish exports to that region with exports falling by an estimated 30% to €170 million.
Prospects for 2015
Cotter outlined the factors that point to 2015 being a more challenging year to maintain recent growth.
While the abolition of milk quotas in April 2015 is expected to lead to an increase in milk output of more than 10% for the year, the current weakness of global dairy markets is negatively impacting on price levels and recent forecasts from Rabobank suggest this trend will persist well into 2015.
Cattle supplies are expected to ease by more than 120,000 – 150,000 head in 2015, which will lead to export volumes falling by around 8%.
However, some recovery in cattle prices is anticipated.
Much will depend on demand developments in more established markets with consumer sentiment to remain a critical driver.
The prepared foods and beverages sectors both face competitive market environments, although both have shown a strong ability to diversify over recent years.
Further strong growth potential exists for whiskey in particular, while a number of key prepared food categories such as confectionary, ready meals and bakery are expected to record further growth.
The export outlook for the seafood sector will depend on product supply.
However, value added salmon exports from Ireland are showing strong increases and this trend is expected to continue in 2015.
Industry survey
The results of the annual Bord Bia industry survey, completed in December 2014, shows good optimism among food and drink manufacturers across all categories.
In total, almost 95% of the 350 respondents reported similar or higher export sales over the previous 12 months.
The industry is also optimistic for the year ahead with more than half (52%) expecting their export sales to increase, while a further 42% expect them to be maintained.
Initiatives for 2015
In 2015, Bord Bia will continue to promote Ireland’s sustainable food and drink industry through its Origin Green Programme and its participation in 18 trade exhibitions which will attract in excess of 800,000 business executives in Europe, Russia, the Middle East and Asia.
‘Feeding the Planet, Energy for Life’ is the theme for the upcoming World Expo, which will be hosted in Milan, Italy for six months starting on May 1, 2015.
The show is expected to attract in excess of 20 million visitors. Ireland will exhibit alongside 143 other countries and Bord Bia’s Origin Green programme will be the key theme of the Irish stand.
