This follows growth of €700 million in 2010 leaving Ireland’s food exports in 2011 some 25 per cent ahead of 2009 levels.
Further strong growth in whiskey is helping to offset largely static exports of cream liqueur and beers, repored Bord Bia.
For the year, exports are expected to rise by around five per cent as stronger shipments to Continental EU and
International markets drive trade.
Meanwhile, against a backdrop of strong global demand and high prices, eight out of 10 exporters surveyed by Bord Bia rate their prospects as improved or very improved compared with this time last year. The forecast and survey findings were issued by Bord Bia on the opening day of the 80th National Ploughing Championships taking place in Athy, Co Kildare.
All major categories are expected to show growth this year, led by dairy and meat, which combined account for more than 60 per cent of total food and drink exports. Strong global prices are driving export growth, with the FAO food price index 26 per cent ahead of this time last year, however increased volumes of dairy products, pigmeat, whiskey, cider, confectionery, sauces/soups and mushrooms are also boosting revenues. It is estimated volume growth across these categories will account for up to 30 per cent of the total.
“The latest surge in world food prices is further evidence that the era of cheap food is at an end, yet while forecasts point to a longer term upward trend, the conditions for volatility in prices remain in the form of weather-related events, fluctuating stock levels, exchange rates and market speculation. Nevertheless, the context for the achievement of the ambitious Food Harvest 2020 targets, including 50 per cent export growth, has rarely looked more favourable.”
Figures for the first half of 2011 show some change in the market distribution of Irish food and drink exports. The UK remains the principal export destination, although its share of total exports fell from 44 per cent to just over 40 per cent compared to the same period last year. This reflects the fact that much of the growth in dairy and to a lesser extent prepared foods, beverages and beef has occurred outside of the UK market.
The proportion of exports going to other European markets jumped by two percentage points to 35 per cent for the period as stronger dairy, beef, beverage and prepared food exports boosted trade. International markets accounted for 25 per cent, driven in particular by stronger dairy exports.
Companies registered to participate at Bord Bia’s Marketplace International 2012, the major business development event scheduled for next February, were recently asked to identify their top three markets. UK and Continental EU were both prioritised however there is a growing interest in markets such as Asia, Russia, Middle East, Eastern Europe and USA – all these markets were proving to be popular targets at the ‘Meet the Markets’ information day which was held last week by Bord Bia.
While the consumer search for value continues apace, the initial signs of rising consumer prices have emerged across Europe during 2011. In July 2011, the consumer food price index for the euro area was almost 3% ahead of a year earlier while UK prices were 6% higher than a year earlier.
The ongoing volatility in exchange rates presents a challenge for Irish exporters. Current exchange rates leave the euro nine per cent stronger against the US dollar and five per cent stronger against Sterling than September 2010.
The Irish manufacturing sector has improved its competitiveness over recent years with Ireland’s Competitiveness Scorecard for 2011 published by Forfas showing a more productive and cost competitive industry. During the period April 2008 to February 2011, Ireland’s harmonised competitiveness index depreciated by more than 12 per cent in real terms, which is helping the sector’s competitiveness on export markets.
Despite the economic recession, agricultural commodity prices remain at record levels as a combination of tighter supplies and growing demand in developing economies boost trade. The FAO food price index for August 2011 was almost double the level evident in August 2005. All products have seen a significant jump in their index value, led by sugar and cereals.
Bord Bia’s Industry Survey
Irish food and drink manufacturers across all categories remain optimistic according to Bord Bia’s recent food industry survey (August 2011). Eighty percent of the companies surveyed viewed the prospects for their business as improved or very much improved compared with this time last year, with almost 70 per cent reporting an increase in sales.
In terms of sources of business generated over the last year, some 65 per cent of those reporting increased sales grew their business with existing customers, while 59 per cent developed new business with new customers in new markets. Innovation has played its part with 48 per cent of respondents citing new products as a key contributing factor to increased sales.
Increasing ingredient costs remains the main cost pressure for companies, followed by energy and transport, however relative to principal competitors, some 88 per cent of companies believe themselves to be as, if not more, competitive.
The industry survey was conducted during Bord Bia’s inaugural training day for companies in preparation for Marketplace International 2012. Over 70 companies attended the event to meet staff from Bord Bia’s overseas offices to help identify export opportunities and discuss how to win new business in different markets. On February 7th, 2012 Bord Bia will host 380 pre-screened international and domestic buyers, in the Convention Centre, Dublin, to meet with over 150 Irish food and drink manufacturers. Bord Bia is aiming to secure €15 million in new business from the one day event.