Asia boosts Irish food and drink exports

Irish food and drink exports maintained their strong upward growth path in 2007 adding a further €414 million in sales, reaching €8.62 billion ($12.65 billion) according to Bord Bia’s Export Performance & Prospects 2007 / 2008 report.

The increase, representing 5% on the record levels of 2006, is all the more impressive when viewed against a significant strengthening of the euro against the US dollar and Sterling, rising ingredient costs and ongoing pressure on operating costs.

“The Food and Drink sector’s solid export performance has been underpinned by the upward pressure on global food prices that emerged during 2007 and that is set to remain a feature of the international marketplace in 2008 and beyond”, said Aidan Cotter, Chief Executive, Bord Bia commenting at the launch of the report.

“The high export orientation of the sector, accounting for 10% of the country’s merchandise exports, means it is well positioned to exploit these global trends and maintain its contribution to Ireland’s economic performance”, he added.

The principal sectoral driver of growth last year was the dairy industry, whose 13% increase in exports amounted to more than €270 million or 65% of the total rise in food and drink exports.

The market region experiencing the highest growth in turn was Asia, which accounted for as much as one-third of the increase in total exports, already reaching the government target set for the region in its Asian strategy for 2009, of €400 million.

The exceptional performance by the dairy industry, with exports reaching €2.36 billion, benefited from a significant strengthening in global prices for dairy commodities and ingredients.

The global market was boosted by lower output due to drought and flooding in some key producing regions and especially the fact that global demand continues to grow at a faster rate than supply, particularly in Asia and the oil producing regions.

This is reflected in the fact that approximately 50% of the growth in Irish dairy exports in 2007 came from Asian markets.

Beverages represented the other sector to benefit directly from the strength in Asian demand.

Alcohol exports to the region more than doubled during 2007 fuelled by strong growth for cream liqueurs, whiskey and stout in China and a recovery in the import demand for whiskey in Japan.

In total, exports of beverages reached €1.45 billion, an increase of 5% on the previous year.