Expert: Polish Pork Producers Face a Shrinking Market and Rising Competition
Jakub Olipra, senior economist at Credit Agricole Bank Polska, says the Polish and EU pork markets may shrink in the coming years. He says the industry must raise its competitiveness and is dependent on piglet imports from Denmark.
Poland's pig farming sector faces a shrinking sales market, growing pressure from global producers and dependence on imported piglets. Jakub Olipra, senior economist at Credit Agricole Bank Polska, a commercial bank in Poland, made the comments to the agricultural portal Farmer.pl. He is due to discuss trends and challenges for the sector at the conference "National Challenges in Agriculture" (Narodowe Wyzwania w Rolnictwie), which will take place on 18 November at Legia stadium in Warsaw.
A market of a "shrinking pie"
Olipra argues that, amid the current crisis, the pork market should be viewed over a longer horizon than just the coming months or prices in the near term. In his view, several factors suggest that both the Polish and EU markets will contract. In non-EU countries, demand for European pork may become increasingly limited, because former major importers have built up their own production. He cites China, which is now practically self-sufficient in pork production.
He therefore describes a market of a "shrinking pie", in which competitiveness must be pushed to the maximum in terms of both production costs and quality. Otherwise, Polish producers could gradually lose their position on the global market.
Oversupply and competitors
The expert expects the EU to struggle with a growing structural oversupply of pork in the coming years. On the global market, European producers must compete with firms that have significant cost advantages and larger production scale. He says the United States and Brazil can offer pork on very competitive terms and position their product more effectively.
Dependence on Danish piglets
Olipra sees a particular weakness in the fact that Poland is not self-sufficient in weaner pigs, young animals bought for fattening, and imports them, mainly from Denmark. Around 40% of pigs fattened in Poland come from Danish piglets, so a significant share of margin and added value stays outside the country.
He adds that, given changes in Denmark's pig sector, Poland could soon lose access to these animals. That would hit not only farmers but also the feed industry and meat processing, which would have to switch to importing half-carcasses and primal cuts.
