Securing market access to China for ruminant meat is a long-term ambition for EBLEX, but while we currently unable to export product there, China’s continuing demand does inadvertently create other potentially lucrative opportunities for the UK.
While Chinese import growth has been slowing, largely due to smaller volumes available on the global market, the volume of product taken from other major suppliers is still significant. For example, March figures indicated that shipments from New Zealand increased 15 per cent on the year, while shipments from Australia increased marginally. While Uruguay sends considerably less product, its year-on-year figures for March still showed a threefold increase.
So, what are the implications for the UK? China’s rise in importance over traditional markets such as Europe means that product has been diverted away to fulfil Chinese requirements. It seems inevitable that as the Chinese market evolves, demand will increase for greater volumes and more high value product like chilled lamb leg joints. With product being diverted away from the UK and Europe, competition from the likes of New Zealand could well decline and further opportunities for UK exports will inevitably present themselves.
The Far East has already seen a significant uplift in shipments, becoming the second biggest destination by volume for UK exports. A recent trade mission to Hong Kong also highlighted how that market could evolve in the future due to its high-value food service sector.
In a broader context there are plenty of other reasons for optimism when looking at UK exports. EU sheep meat production is expected to fall by two per cent in 2014. Significantly, production in most of the UK’s key export markets is expected to decline which should present further opportunities for exports.
Key movements in EU sheep populations all point to either less competition or increased demand for UK product. While this relies on the demand side of the equation to a large extent, coupled with the growing influence of China on the global market, the outlook for UK sheep meat exports looks decidedly optimistic.
Further details on production and the outlook for export opportunities are available in the latest Cattle and Sheep Market Update