Value of food exports falls €1bn

THE value of food and drink exports fell €1 billion last year, according to Bord Bia’s Export Performance and Prospects report published yesterday.

However, Bord Bia chief executive Aidan Cotter said the industry’s underlying performance, reflected in an estimated volume decline of just 3%, was impressive when set against the challenges posed by sterling and price deflation in the marketplace

“Sterling remains the single biggest issue for the industry,” he said, pointing out that in 2009, the depreciation of sterling is estimated to have reduced the value of exports to Britain by some €400 million.

Bord Bia chairman Dan Browne said there are indications, however, that export values are beginning to stabilise and some recovery in the year ahead is predicted.

“The potential for stronger export revenues from the key dairy and meat sectors, and investments by prepared food companies to broaden their market presence on the Continent, will help exports as 2010 progresses. However, developments in sterling and consumer sentiment remain critical,” he said.

A sustained decline in the value of sterling combined with the economic downturn and severe difficulties in the global dairy market created what Bord Bia described as unprecedented challenges for Irish food and drink exporters last year.

Total value of Irish food and drink exports for the year was €7.12 billion, a 12% drop, but the prospects for 2010 point to a return to growth for the sector.

The long term outlook for the industry, the economy’s largest indigenous sector, accounting for almost 9% of employment and 10% of exports, remains positive, according to Bord Bia.

It said that due to an expanding world population and evolving demographics, the world will need to produce over 40% more food by 2030 and some 70% more by 2050.

But the challenge for the industry to improve competitiveness while broadening its export reach remains a formidable one.

Ireland’s uniqueness within the eurozone, sharing a land border with the sterling area, has compounded the industry’s difficulties on its domestic market.

At the same time, Bord Bia said Ireland must compete with British based exporters as it seeks to build share elsewhere within the euro area.

Britain remained Ireland’s principal export destination in 2009 with sales valued at just under €3.1bn, a decrease of 15% compared to the 2008 figures.