AHDB: UK's sheep meat exports under pressure due to tight supply
AHDB analyst Rebecca Oborne said the decline in exports was reported across all the key UK export destinations. In April, sheepmeat exports dropped by 34% compared to the same month from 2017.
"Considering the earlier Easter timing in 2018, this is not surprising. The UK typically exports around a third of production but this rises to nearer 40% at Easter and Christmas. On top of this, UK sheep meat production during April stood 18% below year-earlier levels, indicating a lower supply availability this year," Oborne explained.
Shipments to France saw the biggest decline in the month of April, by 40% compared to year-earlier levels, down to 1,793 tonnes from 2,969 tonnes in 2017. Sheep meat exports to Germany fell by 37% to 820 tonnes from 1,293 tonnes in the previous year. Ireland comes third, with a decline in UK sheepmeat imports of 21%, down to 813 tonnes from 1,028 tonnes in 2017. Meanwhile, exports to Belgium were down to 545 tonnes from 803 tonnes in 2017, with a decline of 32%.
Oborne says that another cause of declining exports may be current price trends. The price competitiveness of British lamb weakened as the GB price surpassed the French price in April.
"The GB reference price is typically around 80% of the French price, and when the GB price moves above the trend rarely lasts for long. As such, this may also partly explain why the pressure on exports has become more pronounced," Oborne said.
Oborne added that because of the fact that GB prices for lamb continued to be above prices reported in France in May, exports in this month may have also been affected.
The AHDB analyst also stated that decline in UK's production in May "may have added some additional downward pressure."
Exports may recover in the following weeks as GB prices saw a drop recently below the French price level. Still, Oborne says that a challenge remains in the form of available supply during this period.
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