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The global consumption of poppy seed increased over the previous year.
The global consumption of poppy seed increased over the previous year.

Insights into the global poppy seed market


Issued by IndexBox - Aug 13th 2018, 11:49

The global consumption of poppy seed increased over the previous year. 

According to the report "World: Poppy Seed - Market Report. Analysis And Forecast To 2025", recently published by IndexBox, the global poppy seed market was estimated at 111K tonnes in 2016, which was 6% more than in the previous year. After a noticeable slump in 2012, the market fluctuated over the next four years within an overall upward trend.

In value terms, the global poppy seed market had total revenues of $183.4M in 2016 in wholesale prices, which was approx. at the level of the previous year; prior to that it fluctuated wildly due to price changes reflecting yields of poppy. That figure refers to the total revenue of producers and importers (excluding logistics costs, retail marketing costs, and retailers’ margins, which will be included in the final consumer price).

India, Germany, Hungary and the Czech Republic Were the Leading Consumers of Poppy Seed
India, accounting for 14% of global poppy seed consumption in 2016, the Czech Republic (9%), Germany (9%), Russia (8%), Hungary (8%), Poland (6%), and the U.S. (5%) were the countries with the highest consumption of poppy seed.

The highest annual growth rates of consumption from 2007 to 2016 were recorded in Hungary, with +11.6% growth, India and Poland, with +8.8% and +7.2% growth, respectively. Following robust consumption growth rates, India significantly strengthened its share in terms of global poppy seed consumption from 12% in 2007 to 19% in 2016; Hungary (+5 percentage points) and Poland (+2 percentage points) also increased their shares over the same period. By contrast, the share of the U.S. (-2 percentage points), the Czech Republic (-3 percentage points), Germany (-7 percentage points) and Russia (-14 percentage points) declined over the period under review.

Amongst the leading consuming countries, high levels of per capita consumption levels were recorded in the Czech Republic (941 gr/year) and Hungary (854 gr/year), which were significantly higher than the world average of 15 gr/year. The annual growth of per capita consumption from 2007 to 2016 was the most notable in Hungary, with +11.6% growth.

In the European market, poppy is used mainly by the food and confectionery industry, while in the largest poppy consuming country - India - it is a popular spice and an integral ingredient in the preparation of some national dishes. The market is largely determined by the supply of poppy, the yield of which is subject to strong fluctuations due to adverse weather conditions. Moreover, the need to obtain licenses for growing poppy, as well as strict control over its production, will limit the expansion of production. On the other hand, the population growth contributes to the growth of the food industry, which in turn will ensure the growth of poppy consumption. As expected, the world poppy market will grow for the next ten years at a rate of +1.2% per year, which will bring the market to a level of 123K tonnes by 2025.

Production Is Still at a much Lower Level than in 2011

Production of poppy seed was 103K tonnes in 2016. The gradual increase over the period from 2007 to 2011 was followed by a sharp decline in 2012. It was caused by contraction of Turkish output because of the reduction in farmers' acreage allocated to poppy cultivation. This, in its turn, happened due to farmers switching to cultivation of other crops and poor weather conditions.

In value terms, production stood at $211M with pronounced fluctuations over the period under review, which was due to price changes. In 2016, global poppy seed production failed to recover after the drop of 2012.

The Largest Producer of Poppy Seed - the Czech Republic - Has Reduced Production Volumes

The Czech Republic was the key world poppy seed producing country, as this country, good quality produce makes it more preferable over poppy seed produced in other countries. Czech output was about 29K tonnes in 2016, which accounted for 28% of total global output. The other major producers were Turkey (20%), Spain (13%), Hungary (9%), Australia (6%) and France (5%).

In the Czech Republic, production levels decreased by -1.6% annually from 2007 to 2016 largely attributed to unfavourable weather conditions and due to the farmers switching to cultivation of other crops. Most of the other major producing countries increased their poppy seed output. From 2007-2016 annual growth rates were especially high in Hungary (+15.5%) and Spain (+10.4%).

The Majority of Poppy Seed Is Intended for Exports

Poppy seed is a highly traded commodity, with the share of export in total global output being about 75% in 2016. High trade intensity is determined mainly by the substantial distances between the main countries of poppy seed production and key consuming countries. Poppy seed will continue to be highly traded, fuelled by increasing consumption, trade liberalisation policies, as well as intense global and regional integration.

The Czech Republic and Turkey Supplied more than a Half of Total Exports

In 2016, the volume of global poppy seed exports totalled 80K tonnes, with a mixed trend pattern over the last few years. A gradual decrease over the period from 2007 to 2009 was followed by a rapid recovery from 2010-2011. Afterwards, however, the trend pattern turned down, decreasing through to 2015 and then went up again in 2016.

The Czech Republic (23.2K tonnes), Turkey (18.6K tonnes), distantly followed by Spain (9.2K tonnes), the Netherlands (6.2K tonnes), France (5.1K tonnes), Hungary (2.7K tonnes) and Austria (2.3K tonnes constituted the largest exporters of poppy seed worldwide), together making up 85% of total exports.

Hungary was the fastest growing exporter (+13.4% per year) from 2007 to 2016. The share of Turkey (+4 percentage points), Spain (+4 percentage points), France (+2 percentage points) and Hungary (+2 percentage points) increased from 2007-2016, while the share of the Czech Republic (-5 percentage points) and the Netherlands (-6 percentage points) contracted over the same period.

India Proved to Be a Promising Market with Regard to Poppy Seed Imports

The volume of global imports totalled 85K tonnes in 2016. Imports trend pattern was generally in line with exports: these trade flows complement each other on a global basis. Determined by the high trade intensity, the share of imports in global demand accounted for approx. 77% over the last year.

In 2016, India (16.1K tonnes), Russia (8.9K tonnes), Poland (8.0K tonnes), Germany (7.8K tonnes), the U.S. (5.8K tonnes), the Netherlands (5.8K tonnes) and Austria (5.6K tonnes) were the leading destinations of poppy seed imports, together making up 68% of global imports.

Amongst the major importing countries, India (+8.4% per year) gained the highest annual growth rates from 2007 to 2016. While the share of India (+9 percentage points) increased significantly, the share of Russia (-8 percentage points), the Netherlands (-5 percentage points) and Germany (-3 percentage points) reduced from 2007 to 2016. The shares of the other countries remained relatively stable throughout the analysed period.

Report: World: Poppy Seed - Market Report. Analysis And Forecast To 2025


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