The Bord Bia report, Export Performance & Prospects: Irish Food, Drink, and Horticulture 2012/13, estimated that the value of Irish dairy and ingredients exports fell by 2% to €2.66bn in 2012 - a decrease it attributed to a “significant softening in prices” in the first half of the year.
Despite this global drop in prices, Bord Bia added that the Irish dairy sector “performed strongly” during 2012. It is confident that global demand for Irish dairy will stay well ahead of historical averages going into 2013.
“Mixed” export trends
“2012 marked a more difficult year for the global dairy market as a supply response to the strong price prevailing over the previous 18 months led to a significant softening in prices over the course of the spring and early summer with product prices easing by 20% to 25%,” said the report.
“However, from late summer and during the autumn, a good recovery in international dairy prices was evident. Since November, the recovery in international prices has slowed considerably with declines reported in US prices in particular. This may reflect a slowdown in import levels in key regions.”
According to the report, “mixed trends” were experienced among the key export destinations for dairy products in 2012.
Exports to the UK increased by 5% to €960m. Exports to international markets also “performed strongly” as a result of increased trade to Asia, Central and South America, and the United States.
“Overall exports outside of Europe are estimated to have reached more than €1bn for the first time and now account for almost 40% of total exports.”
Meanwhile, exports to mainland Europe “struggled.”
“Overall for the year it is estimated that the value of exports fell by more than 10% to €680m. This leaves the region accounting for just over a quarter of total dairy exports. The largest declines were evident to France, the Netherlands and Belgium,” said the report.
Export prospects “generally positive”
Despite the difficulties experienced in 2012, Bord Bia expects import demand for Irish dairy to increase in 2013.
“While the economies of China, South East Asia and MENA are growing more slowly, incomes will still show good growth, consumers will buy more dairy and imports will remain attractive,” said the report.
“The prospects for Irish dairy exports in 2013 remain generally positive with global demand likely to keep exports well ahead of historical averages. Global stock levels, demand in key regions and the relative strength of the euro will largely determine price prospects,” the Bord Bia report added.