Pandemic not so daunting. Polish exports have already rebounded

During a debate organised by Rzeczpospolita – 'Coronavirus Pandemic: Huge Threat or Perhaps Opportunity for New Opening in Polish Exports' – experts have exchanged views on an issue how to assess results recorded by the Polish exports in the first six months (7% drop compared to the same period in 2019).

"We can now observe that export results, in spite of grave concerns, will not decline at the yearend by 15-20%, but – according to our estimations – by mere 3-4%. Clearly, the results will be highly diversified in terms of specific industries and geographically. Notably, the exports to Germany will decrease considerably less than it has been feared; however, in the case of other euro zone economies, such as Italy, France or Spain, the decline will be tangible. Imports from these countries used to be substantial, while nowadays their purchase capacity has been decidedly reduced. On the other hand, sales to highly developed countries outside the EU, including the United States, are on the right track," analysed Piotr Soroczyński, Chief Economist of the Polish Chamber of Commerce.

Safe trade

"As far as exports to the Western European countries affected by the pandemic, such as France, Italy or Spain, are concerned, our entrepreneurs increasingly more often address us with inquiries about insurance. A risk of trade with these states is for now difficult to assess and there are hardly any insurers willing to take on these risks. Additionally, the domestic exporters also want to protect themselves in dealings with business partners from the United Kingdom, mainly in the context of still unclear rules governing trade following Brexit," stated Janusz Władyczak, President and CEO of KUKE. In his opinion, in times of such great uncertainty – given that we also cannot forget about the trade war between the USA and China – safe trade will be gaining in importance.

"For certain, we note increased interest in the Middle East and Asian markets. Numerous windows of opportunities have opened there for Polish companies. This is a good sign, since these markets had been closed for us for a long time due to their specific nature and internal circumstances. Some Polish enterprises have taken advantage of this chance. We can only hope that it will prove to be a permanent trend which will help diversify our exports in geographical terms," clarified Mr. Władyczak in the context of a question whether the collapse of Western European markets might somehow force Polish exporters to look for new non-European outlets. All the same, as he underlined, the situation on the markets most important from our perspective, i.e. Germany and the Czech Republic, was fully normalising.

To Asia, but also to the US

"Interest in the Middle East markets and other prospective directions has remained on the level observed already prior to the pandemic. Companies display the largest interest in the German and American markets. According to data of the Ministry of Development, during the pandemic we have become the fifth most important trade partner of Germany, which is due to geographic proximity, certainty and shortened supply chains. On the other hand, in the first six months of 2020 the exports to the US amounted to EUR 3.5bn, i.e. by 2.3% more than in the same period last year," said Grażyna Ciurzyńska, Acting President of the Board of the Polish Investment and Trade Agency (the Agency).

"We perceive the US market as the one with the largest potential. It results from our earlier trade policy, but also from the trade war between the US and China. The pandemic has helped Polish companies to increase turnover dynamics on the American market," assessed the head of the Agency.

Comensal, a manufacturer of construction tools, can serve as an example of the Polish undertaking to have entered the American market this year. "We have exported our tools for over 20 years. We sell them almost worldwide, including to Germany, Russia, Tunisia, Algeria, the Baltics and the former CIS countries. Now, with help of the Agency we are entering the American market, which is important for us in the current demanding period," stated Wiktoria Skopiak, Export Sales Director at Comensal. As she admitted, the company expected to generate high turnover overseas, albeit not necessarily high margins due to intense competition.

"The US, but also Canada, represent for us an alternative for European, Asian and Arab countries. It is a highly-developed market which perceives European producers in a different manner," explained Ms Skopiak.

"In the case of Asia, we think not only of China, but also of Vietnam and Singapore," emphasised Grażyna Ciurzyńska. "Both these markets are significant, also because of the fact that in case of both of them free trade agreements with the European Union entered into force this year. As regards Vietnam, it happened fairly recently – on 1 August. Singapore, on the other hand, has the largest number of free trade agreements in the global perspective; further, it is a commercial hub for entire Southeast Asia. These Polish companies which are aware of that and can take advantage of free trade agreements might make good business in Singapore," said Jacek Strzelecki, expert for Asian agri-food markets. As he emphasised, the above applied not only to food exporters.

As he added, one might not forget China. "For a month, we can observe considerable rebound in Chinese business, and as regards the food industry – it already holds regular fairs. Presently, Q?ngd?o hosts the so-called meat week, i.e. a great international meeting of the meat industry. It is held live with participation of expositors and public. Also companies from Western Europe are present there. Unfortunately, the Polish ones are missing," stated Mr. Strzelecki.