Strengthening sterling opens opportunities globally
Exchange rate fluctuations can benefit the English beef and lamb industry if producers and processors target non-EU markets, Eblex has said.
There has been concern over the strengthening of sterling over the euro in recent months, with UK exports to the continent returning cooler margins. Sterling has risen 8.23% against the euro over the last year, and has also performed poorly against the US dollar.
However, Peter Hardwick, head of trade development at Eblex, said that this was creating new opportunities for producers and processors, with UK products proving more competitive in third-country markets.
He said: “The change in performance against the euro is making trading more difficult in Europe, though it would be wrong to assume this is significantly affecting trade.
“On the lamb side, we currently have a weak market, which will recover in the coming months. For beef, trading remains robust, which demonstrates that currency changes are not the only driver for export sales.
“However, the current situation is creating more opportunities on world markets, because we are still performing poorly against the international benchmark dollar, down 6.72% in the last year, which is making our products attractive in non-EU countries.”
He also pointed out that in markets where the UK is competing with countries like New Zealand and Australia, the strength of their currencies is making UK exported beef and lamb more competitive than it might otherwise be. This has helped to offset the fall of New Zealand lamb prices on global markets.
He said: “It is impossible to accurately predict what currency markets will do, but by having access to as many markets as possible across the world, we are spreading the risk of being severely affected by a change in any one region, while ensuring there are markets for all parts of the animal, aiding carcase balance and reducing waste.”
In the last month, Hong Kong announced that it is reopening its market to bone-in beef from the UK, while recent trade visits have included Dubai, Abu Dhabi and Canada.
Nick Allen, Eblex sector director, said: “Focusing on opening additional global markets has helped push up beef exports outside the EU by 150% and sheep meat exports by 193% in the last two years.”
“It is easy for us as an industry to focus on the negatives, but there are significant positive messages and opportunities that the current situation offers and we must look to these rather than talking down the sector, which can be counter-productive.”