Poland

Polish poultry sector losses profitability

Poultry

Acquisition prices are declining, export markets are facing fierce competition while feed prices are eroding margins.

Posted on Aug 31 ,10:11

Polish poultry sector losses profitability

The poultry industry in Poland is under pressure, as profitability is declining fast. For a month and a half, prices for slaughter poultry have been falling and profitability is under question as feed prices are getting higher. The National Chamber of Poultry and Feed Producers forecasts that the situation of chicken broiler breeders will continue to deteriorate, and purchase prices will decline dynamically.
"After a few first months of the year, marked by optimism for the poultry industry, we have a worse period. The sources of this deterioration can be seen in the foreign trade conducted by the EU as a whole. First of all, import prices of poultry from third countries have fallen drastically. This means that Polish exports to Europe must also lower prices because we are competing for the same market segment", explained Katarzyna Gawronska, director of the National Chamber of Poultry and Fodder Producers (KIPDiP) for the Portalspozywczy magazine.

Great Britain has lost appetite for Polish poultry

Before Brexit, the UK was the second-largest market for Polish poultry products. In 2020, Poland exported 134,500 tonnes of poultry meat to the UK worth nearly PLN 1.44 billion (€316 million). The share of the UK in the total poultry meat exported from Poland accounted for almost 14%. Currently, the UK poultry market is disputed by Ukraine and Brazil, with South American producers increasing their shipments to the UK by 39% in the last couple of months.
Meantime, poultry exports from the EU have been declining compared with last year, which is also bad news for the Polish poultry producers who are supplying processors in the single market. Half of the poultry production in Poland is exported and 80% of the volumes exported are shipped to the EU market.

COVID-19, more destructive than AI

According to KIPDiP, the most likely scenario for the next several weeks on the broiler purchase market and the chicken meat trade is the systematic deterioration of the situation of breeders and slaughter plants.
The blame for this state of affairs - apart from issues related to current events in the European Union - will also lie with seasonal factors, which traditionally do not favor the industry at this time of the year. In the analyzes of the National Chamber of Poultry and Feed Producers, there is a reservation that the predictions about the future may not come true if another wave of the COVID-19 pandemic breaks out in the world. Interestingly, KIPDiP believes that the SARS-Cov-2 epidemic is a much more destructive event for Polish poultry than avian influenza, sums up the report.

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