FDBusiness.com

The value of Irish food and drink exports rose by 4% in 2014 to reach a record high of almost €10.5 billion. The results mark the fifth consecutive year of export growth for the Irish food and drink industry. The 4% exports growth during 2014 represent an expansion of 45% or €3.2 billion since 2009. 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%).

International markets showed renewed growth in 2014, reflected in a 15% increase in trade to stand at €3 billion or 29% of total Irish food and drink exports.

Aidan Cotter, Chief Executive of Bord Bia (Irish Food Board), comments: “The industry’s drive to broaden export reach to destinations outside of the 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.”

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.

Irish Minister for Agriculture, Food and the Marine Simon Coveney TD says: “Since 2009 food and beverage exports have increased by 45% compared to Irish merchandise exports which are 5% higher. Our strategy for exports is clear and our pursuit of the targets set out in Food Harvest 2020 is relentless. The speed and determination the industry displayed in shifting focus to new and emerging markets in response to static price inflation in EU markets, and the severe restrictions in the Russian market, has been remarkable.”

According to Aidan Cotter, 2015 is expected to be a more challenging year with regard to maintaining 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.