Critical cocktail hits lamb exports

A “critical cocktail” of low consumer purchasing power, punitive exchange rates, cheap imports and supply surfeits have forced UK lamb exports to dip by nearly a quarter in the last 12 months, according to Hybu Cig Cymru - Meat Promotion Wales’ (HCC) latest Market Bulletin. 

Sheepmeat exports during 2015 were significantly impeded by the strength of sterling against the euro, as well as cheaper imports from other countries and subdued consumer demand for lamb. This sent UK sheepmeat exports falling to 79,400 tonnes (t), a decline of 22%, some 22,500t less in 12 months.

The Eurozone accounts for 19 in every 20 sheepmeat export sales and, with shoppers in general feeling the pinch, most European countries recorded reduced shipments. France, which accounts for 54% of the market, witnessed a 16% decline and exports to Germany, Ireland and Belgium fell 2%, 10% and 11% respectively.

Imports of sheepmeat to the UK during 2015 rose by 0.3% to 92,800t, attributed to an increase in shipments received from New Zealand of 6% to 68,800t, amounting to nearly three-quarters of all imports.

Although New Zealand sheepmeat production fell during 2015, imports to the UK increased, as other key markets - in particular China - took smaller quantities due to reduced demand. Other imports to the UK declined, with Australia, Ireland, Spain and France witnessing volume declines of 3%, 19%, 14% and 23% respectively.

The timing of these imports took its toll on the UK market and was a major contributory factor to the increase during the year.

In 2015, the UK imported more beef than it exported – 268,400t of beef, 5% up on 2014, as UK exports fell by 10% to 100,500t. The dominance of Ireland as the main importer of beef to the UK has grown in recent years, accounting for 182,400t, 68% of the total volume of beef imported.

The second-largest beef importer to the UK is the Netherlands, some way behind Ireland with 8% of all volume at 20,400t, a rise of 21% on 2014 and underlining how the strength of sterling against the euro underpinned all European imports.

UK beef export shipments to other member states during 2015 varied, with exports to the Netherlands, Italy, Belgium and Germany declining while those to France increased 3% to 10,100t.

HCC expects exports of red meat from the UK for the coming year to continue to be influenced strongly by sterling’s exchange rate with the euro. If the estimated reductions in volumes of lamb from New Zealand transpire, it could be beneficial to the domestic market, but any optimism is guarded, with the global marketplace demonstrating considerable volatility, making the future import and export performance of both species notoriously difficult to predict.

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