Lamb supply drives exports for 2013

by Editor fleischwirtschaft.com
Wednesday, December 18, 2013

Australian lamb export volumes this year have been bolstered by the huge slaughter rates, as total shipments for the first 11 months of 2013 were at 193,509 tonnes swt, a 12% (21,343 tonne) increase on the corresponding period last year and up 29% on the five-year average (Department of Agriculture – DA).

For the first time in history, Australian lamb exports are expected to surpass the 200,000 tonne swt mark in a calendar year, for a total value of around $1.2 billion.

The build-up of the national flock over the past three years, coupled with widespread dry conditions in eastern Australia, has resulted in indicative eastern states lamb slaughter (as reported by MLA’s NLRS) for the year-to-date reaching around 17 million head, up almost 1 million head year-on-year. The large export volume so far this year has primarily been driven by supply, with marked year-on-year increases in most major markets, as lower Australian lamb prices helped counteract the strong Australian dollar.

Strong export to the Middle East
With one month remaining in 2013, the Middle East remained the largest export destination for Australian lamb, taking 54,924 tonnes swt (accounting for 28% of total Australian lamb exports), up 16% and 63% year-on-year and on the five-year average, respectively. The emergence of Bahrain as the second largest lamb market in the Middle East in 2013, accounting for 22% of total exports, at 12,350 tonnes swt (up 418% year-on-year), underpinned the significant increase to the region. Shipments to the UAE and Kuwait further buoyed exports to the Middle East, increasing 20% and 42% over the same period, to 14,288 and 3,844 tonnes swt, respectively. In contrast, shipments to Iran (2,580 tonnes swt), Jordan (11,837 tonnes swt), Qatar (5,478 tonnes swt) and Saudi Arabia (3,407 tonnes swt) were down 62%, 1%, 2% and 10% year-on-year, respectively.

Although being outstripped by China as the largest export destination in the 2013 year-to-November, the US remained Australia’s most valuable market with higher value cuts (lamb legs and racks as well as shoulders, shanks and shortloins) in strong demand. Shipments to the US increased 6% year-on-year and 8% on the five-year average, to 35,530 tonnes swt.

Growth in Asia
Growing populations and household incomes in developing Asian countries supported export growth to the region, with shipments to Greater China (43,914 tonnes swt) and South-East Asia (8,470 tonnes swt) increasing 41% and 5% year-on-year, respectively. Underpinning the increase to Greater China was 9,264 tonnes swt, or 35% more lamb to China, at 35,905 tonnes swt, and a 3,399 tonne swt, or 112% increase to Hong Kong, at 6,436 tonnes swt. This was assisted, on a lesser scale, by exports to Taiwan, up 10% year-on-year, at 1,573 tonnes swt. Malaysia accounted for 63% of lamb exports to South-East Asia, up 16% year-on-year to 5,357 tonnes swt, with all other markets remaining relatively steady, except for Vietnam, which took twice as much lamb year-on-year.

Tough economic conditions in the European Union (EU) throughout 2013, has seen shipments to the region, back 8% on the corresponding period last year, at 10,016 tonnes swt. The United Kingdom (UK), Australia’s largest lamb export destination in the EU, accounted for 76% of total lamb exports to the region in 2013, at 7,572 tonnes swt, down 6% year-on-year and 3% on the five-year average.

Papua New Guinean demand (PNG) began the year strong, with year-to-July exports up 4%, or 336 tonnes swt on the corresponding period last year. However, a decline in shipments in recent months has seen year-to-November exports back 6% year-on-year to 11,576 tonnes swt – albeit up 20% on the five-year average.
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