Meat & Livestock Australia is positive about global sheepmeat markets.

May 2 2022 - 5:00am
Strong international sheepmeat demand

THE future of Australia's sheepmeat on a global stage continues to look bright according Meat & Livestock Australia (MLA).

In its 2022 Sheep Industry Projections report released in February, it said there was continued support for Australian sheepmeat globally and economies were continuing to recover and grow from the effects of COVID-19.

Advertisement

Ad

As a result MLA said the outlook for Australian sheepmeat, both on a domestic production level and within the established and emerging global markets was extremely positive.

It said challenges would influence fluctuations in the market but overall, as the previous two years have shown, the Australian sheepmeat industry will remain resilient across the entire supply chain and manage these challenges to support the delivery of product across the globe.

MLA believes as the national flock grows, the sheepmeat industry in Australia will be poised to continue to capture global opportunities in both emerging and established markets.

It said as the high-value Australia-UK-Free Trade Agreement (A-UK FTA) comes into effect later in 2022, alongside the emergence and growing demand from other markets, the sheepmeat export industry will only continue to strengthen.

In 2021 there was more than one million tonnes of sheepmeat exported globally, which was down 6.1 per cent on 2020 volumes and of the exporters of sheepmeat, Australia ranked as the largest exporter.

MLA reported in 2021 overall sheepmeat exports from Australia increased by 0.5pc, while at the same time, the overall value of sheepmeat exports rose by 5.3pc to $3.96 billion.

It said this reflected a strong increase in the unit value of sheepmeat products from Australia, with each unit of sheepmeat valued at $9.05/kilogram compared to $8.54/kg in 2020.

The volume of frozen exports from Australia in 2021 increased by 4.9pc, while chilled sheepmeat exports dropped by 12.2%.

In terms of breakdown on the type of sheepmeat export from Australia, lamb represented 65.3pc of total exports (265,000t), while mutton accounted for 34.7pc (140,000t).

In 2021 Australian sheepmeat exports to the US increased by 18.7pc, which was the biggest increase on any market.

All up the US imported 93,349t of Australian sheepmeat, of which chilled lamb accounted for 43.3pc, frozen lamb made up 32.3pc and frozen mutton accounted for the remaining 24.4pc, which was up 27pc on the previous year.

The Middle East and North Africa (MENA) region imported 31,000t of Australian lamb and 15,000t of mutton in 2021, a 33pc drop in total exports for the year.

MLA said the biggest factor for this was the increased airfreight costs due to the pandemic impacts on reduced international flights during most of the year, coinciding with record high sheep prices in Australia.

Another contributing factor was the ending of subsidies on Australian lamb imports by the Government of Qatar.

These factors combined saw Australian chilled lamb exports to Qatar fall 70.3pc in 2021 year-on-year and some uptick in frozen sheepmeat exports to the region.

Going forward supply chains and logistics will be major hurdles for the sheepmeat industry in 2022 and 2023.

These hurdles covers both the difficulty in getting product to the desired market and the cost of freight.

Advertisement

Ad

MLA said ongoing disruption, initially stemming from COVID-19, had seen continued delays and large price increases in shipping routes globally.

The shipping delays and shipment frequency reduction have been especially difficult for exporters who export chilled produce.

MLA said Australian sheepmeat exports were projected to increase by 20pc to 488,000t in 2031 with this increases largely driven by increased consumption in the developing world as incomes increase and premium red meat becomes more accessible to an emergent middle-class.

MLA said the current outlook for Australian live sheep exports in 2022 would be subdued, with high sheep prices and the summer export prohibition the major restrictions on the trade.

It said depending on the effect, the WA flock rebuild would have on increasing supply and easing prices from mid-year, exports may be stronger from September when exports to the Gulf can resume.

MLA reported in 2021, a total of 575,529 head of sheep were exported, which was 29pc fewer than in 2020 and 13pc fewer than earlier forecasts.

Advertisement

Ad

This was the lowest number since 1969 when 396,519 head were exported.

In 2021 MLA said exports to Kuwait were steady, with notably higher volumes going to the United Arab Emirates (UAE), Oman and Israel, while Qatar that was once a major export market taking 180,000 head in 2020, saw zero trade in 2021 after the Qatar subsidy removal took effect from January 1, 2021 and this situation is expected to continue in 2022.

MLA reported exports to Jordan also fell significantly due to weak demand.

Looking forward, MLA said despite the supply challenges, the MENA markets appreciate the high quality of Australian sheep and as a result long-term demand for live sheep remains strong in the region and was gradually recovering to pre-pandemic levels.

Want weekly news highlights delivered to your inbox? Sign up to the Farm Weekly newsletter.

Advertisement

Ad

Get the latest Western Australia news in your inbox

Sign up for our newsletter to stay up to date.

We care about the protection of your data. Read our Privacy Policy.