Summary
While AI outbreaks are expected to reduce EU poultry exports in 2017, there is no evidence of this in the first two months of 2017, with strong growth in EU exports to sub-Saharan African markets north of South Africa. Recent corporate takeovers in the poultry sector could lead to a strengthening of the focus on sub-Saharan African markets. Recent trends highlight the ‘footloose’ nature of EU poultry meat exports, with markets being sought where minimal import controls are applied.
While the EC Winter 2017 ‘Short Term Outlook for EU arable crops, dairy and meat markets’ projected a 1% expansion in EU poultry meat exports in 2017 (1), analysis from the USDA suggests EU poultry meat exports are likely to decline by around 9% in 2017, given the closure of major export markets (such as South Africa and the Philippines) due to outbreaks of Avian Influenza in certain EU member states. By the beginning of March 2017 fully 19 EU member states had been affected (2). In 2016 these EU member states accounted for fully 88.9% of total extra-EU poultry meat exports. (6).
However, no decline in EU poultry meat exports is yet apparent, with exports in January and February 2017 being 5.3% higher than in the corresponding period in 2016. EC figures on the state of the EU poultry market show strong growth in EU exports to non-South African markets in sub-Saharan Africa in the first 2 months of 2017, with a 437% increase in exports to the DRC, 121% in exports to Gabon and 41% increase in exports to Ghana, while exports to Benin have more or less stabilized after 2 years of declines. Strong increases also occurred in EU exports to Vietnam (+82%) and Hong Kong (+56%).
EU Poultry Meat exports to main Sub-Saharan Africa Destinations 2013-2016 and January to February 2017
| 2013 | 2014 | 2015 | 2016 | Jan-Feb 2017 | % change Jan-Feb 2016 | |
| South Africa | 158,548 | 203,412 | 213,577 | 270,176 | 18,137 | -41% |
| Ghana | 75,252 | 56,900 | 68,283 | 77,159 | 17,558 | +41% |
| Benin | 139,247 | 163,844 | 138,414 | 116,882 | 17,006 | -1% |
| DRC | 28,625 | 33,697 | 35,269 | 44,465 | 11,773 | +437% |
| Gabon | 25,070 | 29,409 | 37,330 | 31,925 | 10,032 | +121% |
| Extra- EU Total | 1,428,470 | 1,503,984 | 1,489,430 | 1,616,232 | 240,213 | +5.3% |
Source: EC, ‘EU Market Situation for Poultry’, Committee for the Common Organisation of the Agricultural Markets, 20 April 2017
https://circabc.europa.eu/sd/a/cdd4ea97-73c6-4dce-9b01-ec4fdf4027f9/17.11.2016-Poultry.pdf
The pan-Europeanisation of the EU poultry industry continues apace, with at the end of 2016 not only one of the EU’s largest poultry groups, the Dutch company Plukon, taking over the French company DUC S.A. but the smaller Dutch meat trading company Wegdam buying the French poultry processor Tilly-Sabco (4). Taken together, in 2016, France and Holland accounted for fully 43% of total extra-EU poultry meat exports. Alongside Poland, France and Holland accounted for fully 61% of extra-EU poultry meat exports (6).
It should be noted that the Dutch company Wegdam is already ‘one of the largest exporters of frozen food to Africa’, with ‘a vast distribution network for these products’, including in Ghana, where ‘it is the largest distributor and exploits several cold stores spread over the entire country’ (4).
| Comment and Analysis
If the rate of growth in EU poultry meat exports to sub-Saharan African markets beyond South Africa achieved in the first 2 months of 2017 is sustained throughout 2017, growth in EU exports to other sub-Saharan African markets will far outweigh the decline in EU poultry meat exports to South Africa resulting from the imposition of Avian Influenza related imports restrictions (-159,396 tonnes compared to an expansion of 219,111 tonnes). This highlights the footloose nature of EU poultry meat exports to sub-Saharan Africa, with exporters responding to market closures with increased exports to alternative markets, where import restrictions are less stringent. Between 2009 and 2015 EU poultry meat exports to both West Africa and Central Africa more than doubled (+105% and 111% respectively (see companion article, ‘EU poultry meat exports to Africa continue to grow’, 15 October 2016) The acquisition of the Tilly-Sabco would appear to provide an even stronger platform for the expansion of Wegdam Foods poultry meat and poultry meat product exports to West and Central Africa in the coming years. |
Source:
(1) EC, ‘‘Short Term Outlook for EU arable crops, dairy and meat markets – Winter 2017’,
https://ec.europa.eu/agriculture/sites/agriculture/files/markets-and-prices/short-term-outlook/pdf/2017-03_en.pdf
(2) USDA GAIN Report No. FR1703, ‘EU-28 Broiler Exports in 2017 Impacted by HPAI Outbreaks’, 1 March 2017,
https://gain.fas.usda.gov/Recent%20GAIN%20Publications/Poultry%20and%20Products%20Semi-annual_Paris_EU-28_3-8-2017.pdf
(3) EC, ‘EU Market Situation for Poultry’, Committee for the Common Organisation of the Agricultural Markets, 20 April 2017
https://circabc.europa.eu/sd/a/cdd4ea97-73c6-4dce-9b01-ec4fdf4027f9/17.11.2016-Poultry.pdf
(4) Poultry World, ‘Dutch companies set foot on French poultry market’, 11 January 2017
http://www.poultryworld.net/Meat/Articles/2017/1/Dutch-companies-set-foot-on-French-poultry-market-79438E/?intcmp=related-content
(5) wegdamfood.com, ‘WEGDAM FOOD to take over Tilly SABCO BRETAGNE SAS’, 15 December 2016
https://www.wegdamfood.com/index.php/our-products/frozen-meat-poultry/item/52-wegdam-food-to-take-over-tilly-sabco-bretagne-sas
(6) EC, Market Access Data Base
http://exporthelp.europa.eu/thdapp/display.htm?page=st%2fst_Statistics.html&docType=main&languageId=en
| Key words: Poultry, DRC, Gabon, Ghana, Benin, Plukon, DUC S.A., Wegdam Foods, Tilly-Sabco Area for Posting: Poultry sector, West Africa EPA, Central Africa EPA, Corporate |