Polish dairy companies thrive in EU, but will it last?
Union, the country's dairy sector is reporting such heavy demand
for its products that it is struggling to keep up with demands.
According to Elzbieta Nitecka, president of the Association of Private Dairy Processors in Poland, cream, raw milk and whey powder are a big hit throughout the European Union, as the products are proving to be competitively priced. In particular it is the major markets of Germany and France, and to a lesser degree Denmark, that are proving to be the most voracious customers.
"Currently Polish dairy producers are able to price their products at around 20 per cent less than many leading dairy producers in the old Member States," Nitecka said. "This gives Polish producers a distinct price advantage, and it is this that is helping to drive sales."
Of all the 10 accession states that joined the EU after 1 May, taking the total up to 25 Member States, it is Poland whose dairy sector has most benefited from membership. Indeed, the Polish National Dairies Co-Operative believes that exports for the year 2004 will increase by around 30 per cent to top €330 million.
Last year, Poland's milk product exports to the EU amounted to 18 per cent of its total production, or €270 million. Of this figure, approximately 37 per cent was accounted for by cheese, with a further 47 per cent being made up by milk powder.
Because of the higher price that milk commands on the EU markets, export of the commodity is said to bring in a higher proportion of revenue for milk processors. But in turn this has had a significant impact on domestic prices, which have risen by more than 30 per cent in the last years.
Many industry experts believe that this trend will continue and that eventually prices will start to balance with the rest of the EU. This means that the advantage that Polish dairy processors have enjoyed of late is likely to be short lived.
"Right now the domestic market is saturated and spending power is still limited in the average Polish household," said Nitecka. "However, as consumer prices as well as wages generally begin to fall in line with the rest of Europe, I believe that the domestic market will once again become the focus of attention for dairy producers."
Whether future growth in the Polish dairy sector concentrates on the domestic market or elsewhere in Europe, EU certification of dairy suppliers will prove crucial to meeting that demand. Currently, 210 of a total 300 milk processing businesses are now certified to export their milk throughout the UK. But with these processors now struggling to reach demand, the race is now on to increase the supplies of milk to the processor.
Around 60,000 registered milk producers, out of a total of more than 350,000 are certified to supply milk which can be processed by the 210 certified processing plants. The majority of those uncertified suppliers are too small and under-resourced to meet the EU regulations by the 2006 deadline, which is putting a great deal of pressure on the 130,000 milk producers who are now racing to adapt to certification.
