Low prices of Polish cereals

| Polish Market |

The end of the year provides an opportunity to sum up the situation on the market of agricultural products. 2014 brought bumper harvest in agriculture. This is not good news for the market, though, as increased supply pushed the prices of cereals down to such an extent that their purchasing price does not cover the production cost.

Record crops

Poland is the third largest producer of cereals in the European Union. A report called 25 years of Polish agriculture. Food security in Europe says that the average annual volume of crops in the last decade was 27 million tonnes. There were some temporary fluctuations of the output capacity of Polish agriculture (from 21.7 to 29.7 million tonnes). Those resulted from external factors. In the opinion of the Central Statistical Office of Poland, this year’s crops of cereals and maize reached 31.8 million tonnes. Immediately after the harvest season, the price of wheat was as low as 500 PLN per ton. The current price is 670-720 PLN, which is still well below the production cost.

The problem with infrastructure

The quantity of cereals produced by our country exceeds the domestic demand. We need to do something with the excessive amount of corn. Increasing export would be a good solution. However, the poor, under-financed port infrastructure for the transshipment of cereals is a major obstacle. Consequently, the trade of Polish cereals abroad is not growing as quickly as it could. Poland is also struggling with a shortage of silos where grain could be stored.

Once Poland joined the EU, our cereals began to reach new markets. According to the report, we export at least 1 million tonnes of grain yearly, often even over 2 million tonnes, while 2012/2013 season brought a record high of 4.5 million tonnes. The countries which bought the most Polish cereals in 2013/2014 were Germany and Spain in the EU and Saudi Arabia in the Near East.

Buying Polish bread could help

Stanisław Kacperczyk, the Chairman of the Polish Association of Cereal Producers, believes that if we want to reduce the grain surplus, we need to focus first and foremost on the cereal transhipment infrastructure. Another solution is using some of the grain for the production of biofuel, and maize for the production of bio-gas.

Promoting bread consumption is another equally important issue. We have begun to consume little bread (less than 50 kg per person annually). Additionally, while buying fresh bread daily, we frequently shop in international retail chains, which bake bread made from imported, frozen product. This does not contribute to the consumption of Polish cereals.