Lift predicted for live sheep trade

04 Feb, 2015 01:00 AM
Assuming uninterrupted trade, live sheep exports are forecast to increase to 3 million head by 2019

LIVE sheep exports may one of the few products to increase during 2015.

Last year live exports bounced 17 per cent (year-on-year) to 2.3 million head and in 2015 it's expected to lift to 2.4 million.

Meat and Livestock Australia market information manager Ben Thomas said much of the demand would continue to come from the Middle East with key destinations being Kuwait, Qatar and Jordan.

"Assuming uninterrupted trade, live sheep exports are forecast to increase to 3 million head by 2019 - up significantly from the 2014 volume, yet still well below the numbers from a decade ago," Mr Thomas said.

However, the bottom line for both red meat exports of lamb and mutton is there's going to be a decline in volumes during 2015.

Even though demand is expected to remain high, the ability of Australian producers to supply product will be reduced by tightening production.

For regions such as the Middle East and Northern Africa (MENA) this could mean these destination look elsewhere for product.

Mr Thomas said lamb traders in the MENA could be very sensitive to price movements, particularly at the cheaper end of the product range.

"Sharp spikes in price will cause them to look for other sources of lamb or mutton," he said.

At the same time, he said the Middle East was one of the two major markets for Australian mutton - along with China - with strong supply chains in place and a consumer that was highly knowledgeable about the product.

He said for Gulf countries such as the UAE, Jordan, Bahrain and Qatar there was still plenty of growth potential that exports could look to exploit.

"Dubai is expected to build over 100 new hotels by the end of the decade, and is hosting the World Expo 2020," he said.

"Qatar will be hosting the 2022 FIFA World Cup. There will also be an increase in demand for protein for the large numbers of construction workers expected for these projects."

On the other hand, the US is expected to remain one of the biggest export markets (by volume and value) this year.

Mr Thomas said one of the happy coincidences for Australian lamb was that periods of high turnoff tend to coincide with peak consumption periods for lamb in the US.

"There is a large proportion of chilled lamb that is shipped to the US, and cuts tend to be higher value, including legs, racks, shortloins, shanks, and shoulders," he said.

For the Chinese market, Mr Thomas said there were plenty of opportunities for Australian sheep and lamb product even though export volumes were likely to be reduced slightly.

"China's most popular sheepmeat cuisine, hot pot, uses breast and flap," he explained.

"The capability of the Australian industry to supply lamb and mutton breast and flap in large quantities to the expanding Chinese food service sector will continue to add value to the Australian sheep industry."

For example, last year 58pc of Australian lamb breast and flap and 79pc of Australian mutton breast and flap was delivered to China.

China has been the largest market of Australian mutton, both volume and value terms for the past four years.

Other destinations such as Hong Kong, Taiwan and Japan were also expected to import less Aussie product due to tighter supplies.

The European Union volumes were expected to be steady as quota restrictions mean limited product can be shipped to that destination.

Mr Thomas said this year's EU quota was expected to be filled.

Karen Bailey

Karen Bailey

is The Land's markets editor
Date: Newest first | Oldest first


Katrina Love
4/02/2015 3:13:16 PM

We'll see about that... 2019 eh? Three years into a Labor Government and a strengthened Greens parliamentary presence and another three years of animal abuse and exposés of ESCAS and ASEL breaches and supply chain leaks, mass deaths aboard live export ships... anything's possible.
5/02/2015 8:18:46 AM

You do not have to worry, Love. There is very few sheep available for export. They only want wethers and most have already been sent through the abattoirs.


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