Industry holds breath on effect of euro treaty
The meat industry is holding its breath to see if the new fiscal pact agreed by 17 EU member states, vetoed by David Cameron, will have any implications for red meat exports to the European Union.
Eblex’s head of trade development Peter Hardwick told MTJ that the new agreement causes more uncertainty in export markets.
The EU is the largest destination for UK red meat exports, making up nearly 95% of the total UK beef exports, worth around £303m to the economy. Of this, the 27 EU member states account for 80% of pork exports at £99m, around 97% of bacon exports at £42.5m, and 94% of sheep meat exports, said to be worth around £63,000 (Eblex figures, year-to-date, January to September 2011).
Eblex’s head of trade development Peter Hardwick told MTJ that the new agreement causes more uncertainty in export markets. He said: “While things are unsettled, we are likely to see a greater degree of volatility and, as a rule, volatility is not good for business. At present, however, our exports remain robust.
“If there are difficulties in the markets in which we trade, it is potentially problematic. If we were to see a significant strengthening of the pound against the euro, then that would make trading difficult. However, we are not seeing that and there is no indication yet that there is a major shift in the exchange rate.”
Liz Murphy, director of the International Meat Trade Association, said: “There are many factors affecting our competitiveness — the crucial thing is what is happening to the euro, which is still uncertain. It’s too soon too tell if it will affect exports. At the end of the day, it comes down to supply and demand.”
Prior to the last-minute agreement, The Scottish Association of Meat Wholesalers (SAMW) had warned about drastic effects that a euro crash might have on red meat exports. Alan Craig, SAMW president, had said any change of currency could reduce export competitiveness, which would have a damaging effect on Scottish companies.