IRELAND's multi-billion euro food and drinks industry is on course for a "return to growth" this year despite the continuing challenges of weak sterling, the economic downturn and difficult global dairy markets, Bord Bia said yesterday.
The commentary came as the trade development agency revealed a 12pc fall in 2009's food and drink exports, which came in at €7.1bn. The fall was heavily influenced by the collapse in sterling, reflecting the UK's status as the main export destination for Irish food and drink.
Describing the year as "extremely difficult", Bord Bia chief executive Aidan Cotter insisted there was good cause to believe 2010 would be better, even though the broader landscape continued to be challenging.
"Dairy and beef together account for 60pc of the exports," he said. "In dairy the upturn in international prices has already taken place, and from our marketing assessments we know the development of the dairy sector will continue to move in a positive direction.
"In beef, we see supply around Europe being tighter, with consumption staying relatively stable, so that will have a positive impact on prices."
That growth is in stark contrast to a 13pc contraction in the value of 'dairy & ingredients' exports last year, and a 9pc fall in the value of 'meat & livestock' exports.
Bord Bia believes the better performances in those two areas will be enough to bring the overall industry into positive territory, even though the smaller sectors of 'prepared food' and beverages are "still in the line of fire" for 2010.
Last year also saw Irish food and drinks companies reduce their exposure to the UK, drawing 43pc of their exports income from the sterling zone in the final months of the year against 48pc in January. That strategy leaves companies less exposed to sterling fluctuations in 2010, though Mr Cotter stressed that exporters shouldn't turn too far away from the UK since "it's the market they're most familiar with and the market they're most established in".
A survey of 350 Bord Bia companies found that 90pc have reduced their costs to a level where they could maintain their UK business for six months if sterling remained at 90p, though just 70pc say they could keep their UK trade up indefinitely at a 90p exchange rates.
Beyond 2010, Bord Bia pointed to "positive long-term growth" stemming from a projected 40pc increase in global food demand by 2030 as the world's population grows and diet habits change.
Despite last year's export falls, food and drink remains Ireland's largest indigenous sector and its major companies, including Kerry, Aryzta and Glanbia, make up more than 16pc of the Irish Stock Exchange.