Ramadan gives lift to lamb market
Prime lamb prices rose 6-10p/kg in the week running up to the end of Ramadan across the UK, according to Stuart Ashworth, head of economics services at Quality Meat Scotland (QMS).
“The conclusion of the Muslim holy month of Ramadan typically provides a short term lift in demand for sheepmeat and support for the market price,” said Ashworth. “Although prices cooled again this strength in the marketplace led to a big lift in the volume of prime lambs sold through the auctions in the early part of this week, particularly in Scotland.
“Nevertheless, market prices have remained well ahead of this time last year, averaging 18% higher in the week ending 6 July.”
One of the main drivers of change has been a slow start to the season. Throughout June the supply of prime lambs to auction markets ran 8–10% lower than last year, contributing to market prices running 7–9% higher.
Meanwhile, exports saw the benefit of weakened sterling due to the EU referendum result.
“Compared to a fortnight ago sterling is currently 10% weaker and compared to a year ago 17%-18% weaker,” said Ashworth. “This means that in euro terms the current lamb price is little different to last year, whereas it is up by 17-18% in sterling, making exporting more profitable.”
With sterling also falling sharply against the New Zealand dollar, the cost of importing from there has increased, making home-produced lamb more competitive. At the same time a smaller New Zealand lamb crop last year and higher early season kill suggested that import availability will have tightened.
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