The prospects for the development of food exports from Europe in the coming years depend on many factors, such as changes in food consumption in the world, strengthening trade regulations, as well as challenges related to climate and environmental protection and armed conflicts - including the war in Ukraine.

While European food exports will have to face many challenges, on the other hand, it is not difficult to see circumstances that will open up new trade opportunities for European countries.

The global food market - the current situation

In recent years, the global food market has been plagued by various unfavorable situations. At the beginning of 2020, it was the COVID-19 epidemic, which significantly led to changes in trade and logistics, but also influenced the change in consumer behavior patterns of inhabitants of various parts of the world. We should also not forget about climate challenges that directly affect the issue of food production and transport and require the development of new solutions.

Since last year, the world has been facing a food crisis, largely caused by Russian military actions that have significantly hindered or even prevented the export of Ukrainian agricultural products, threatening the food supply of millions of people. Many countries in the world (especially countries in Africa and the Middle East) depend on transport from Ukraine. And although on the one hand it may be an opportunity for other European countries, one should not forget about the growing competition from other food producers, especially from Asia and Latin America. And although European food is characterized by much higher quality standards, food from these areas often turns out to be much cheaper.

A major challenge for the global food market is the increase in population on a global scale. The impact of population on the structure of food trade can be seen on several levels. First, a larger population can lead to more food imports, especially in countries with weak production capacity or in countries where demand for food exceeds supply. On the other hand, countries with a strong production position can increase food exports to countries with less production capacity or greater demand.

However, the impact of population on the structure of food trade is not clear and also depends on other factors such as trade policy, commodity prices, transport costs, availability of water and natural resources, as well as consumer preferences.

The food market and the war in Ukraine

As we have already mentioned, the war in Ukraine caused by Russia has shaken global food security and put millions of people in Africa and the Middle East at risk. These countries were even dependent on supplies from Ukraine, especially supplies of Ukrainian wheat.

In order to prevent the escalation of the problem and mitigate its effects (both in Ukraine and in the territories of its recipient countries), EU Member States coordinate actions to ensure that the most vulnerable people have access to sufficient amounts of nutrient-rich food at affordable prices.

In 2022, EU countries managed to develop the so-called “Solidarity corridors” that facilitate the export of Ukrainian food through new transport routes. This was necessary due to the destruction of Ukrainian transport infrastructure and the Russian blockade of Ukrainian Black Sea ports.

The European Union has also decided to develop a common approach to the food crisis, which the Member States are trying to face together. The actions taken include:

  • Humanitarian relief,
  • EUR 8 million for food security in 2022-2024,
  • Open trade and cooperation with global partners,
  • Sustainable food production (aid to developing countries).

Food exports from the EU - current situation

Food exports from the EU, despite the current crises and difficulties, are doing relatively well. The countries of the European Community are in a comfortable situation that gives them a chance to take advantage of the current opportunities and increase food exports beyond the borders of the old continent. First of all, there is no threat of a food crisis in the EU itself, which is largely due to sustainable agriculture supported by the EU agricultural policy.

A good example is Poland, which had to face the refugee crisis as a result of the war in Ukraine. The huge influx of Ukrainian citizens who settled in Poland has led to a noticeable trend of increasing demand for food in Poland. Nevertheless, the growth rate of Polish domestic consumption remains lower than the growth rate of agri-food production. This means that there are food surpluses that can be utilized through exports. Both Polish food and the services of Polish producers and wholesalers are characterized by a very good price-quality ratio, which gives an opportunity to diversify business relations on non-EU markets and even compete with seemingly cheaper food products from Asia or South America.

And what are the statistics like? As for the monthly trade flows of agri-food products in the EU, they reached their peak in October 2022 (a record value of EUR 36.4 billion). Despite the subsequent slight monthly decrease, exports of agri-food products from the EU remain high (€20.7 billion). Although the EU is also a large importer of food from other parts of the globe, its trade balance remains positive at EUR 5 million.

This does not mean that EU agri-food exports do not fluctuate. In terms of value, it fell by 1.2% on a monthly basis in January 2023. The reason for the situation is primarily a decline in the export of spirits, cheese and cottage cheese. The 3% increase in exports to China partly offset the decrease in exports to the US (-5%) and the UK (-2%). Although this decrease can be seen in the statistics, looking at the situation from a slightly broader perspective, it is clear that food exports from the EU after 2022 are still higher than in previous years. In the first ten months of 2022, EU exports to the US reached €24.4 billion. This is 29% higher than the three-year average for the same period. Similarly, EU exports to the UK from January to October 2022, worth €39.5 billion, are 15% lower than in 2022. higher than in 2021.

Summary

Although the global food market is subject to various crises, it cannot be denied that European countries are still in a very comfortable situation, which creates new prospects for them in the world trade in agri-food products.

There is no risk of a food crisis in EU countries, and in some of them the rate of production exceeds the rate of own consumption. Changes in world trade patterns and an increase in demand for food (due to population growth) create clear prospects for Europeans in foreign trade. Especially that European food is famous for its high quality, and its production process is subject to restrictive EU regulations, and in some EU countries it is still relatively cheap (such as in Poland). A threat to European exports may be the growing competition from Asian and South American countries and the deepening climate crisis. However, the EU countries have shown many times that they are able to work out efficient solutions to crisis situations. If the European Community demonstrates activities at a similar level, there is a good chance that European exports to other areas of the world will simply increase in the coming years.

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