1
Second EU Sheep Meat Forum: 25 February 2016
Developments of EU Trade
by Lionel Colby,
Independent Consultant
Member of EU Sheep and Goat Meat Forecasts Group
(since it was set up in 1985 by Michel Broders!)
With the support of AHDB MI and AHDB Beef and Lamb
E-Mail: [email protected]
LJ Colby February 2016
Presentation outline
•
•
•
•
•
Three product categories:
– Live sheep
– Sheep meat
– Offals
– Including product from light/heavy lambs
Major markets for EU exports:
– Current situation and future prospects
Major EU exporters
Key export competitors
Market access issues:
– Approval of importing country
– Trade agreements including Free Trade Agreements (FTAs)
LJ Colby February 2016
2
3
Progress being made with sheep meat exports but from a low base to:
- Middle East/North Africa
- Western developed economies
EU sheep meat exports by region, 2007-15
35,000
30,000
tonnes
25,000
20,000
15,000
Other
Other Africa
Western developed econ.
Middle East/North Africa
H/K, China, Vietnam
10,000
5,000
0
2007
2008
2009
2010
2011
2012
2013
2014
2015(e)
Source: AHDB, GTIS, Eurostat
LJ Colby February 2016
Middle East/North Africa taking light lamb, mainly carcases:
- Supplied by Spain (to Algeria, UAE), Romania (to Jordan)
- Tradition of consuming sheep meat
- Growing population, construction boom, food service growth:
- but oil price, future economic growth?
- Very competitive market (Australia, NZ, India)
EU sheep meat exports to Mid. East/N. Africa, 2007-15
7,000
6,000
tonnes
5,000
4,000
Other
United Arab Emirates
Tunisia
Algeria
Jordan
3,000
2,000
1,000
0
2007
2008
2009
2010
2011
2012
2013
2014
2015(e)
Source: AHDB, GTIS, Eurostat
LJ Colby February 2016
4
5
Other Western Europe taking heavy lamb (cuts and carcases):
- Supplied by UK and Ireland
- Limited import demand, small sheep meat markets
- But long term prospects in North America?
EU sheep meat exports to Western developed
economies, 2007-15
6,000
5,000
tonnes
4,000
Other
Norway
Switzerland
3,000
2,000
1,000
0
2007
2008
2009
2010
2011
2012
2013
2014
2015(e)
Source: AHDB, GTIS, Eurostat
LJ Colby February 2016
China long term growth potential?:
- Competitive advantage of Zealand/Australia (helped by FTAs)
- Become a key driver of global market
Chinese imports of sheep meat, 2007-15
300,000
250,000
Other
Australia
New Zealand
tonnes
200,000
150,000
100,000
50,000
0
2007
2008
2009
2010
2011
2012
2013
2014
2015(e)
Source: AHDB, GTIS, Chinese Customs
LJ Colby February 2016
6
Profile of Chinese market
• Import market:
– FTAs with Australia and New Zealand give them a competitive
advantage:
• NZ no import tariffs from 2016; Australia by 2024
• Otherwise tariffs 13-23%
– Tightening up of grey trade (via Hong Kong, Vietnam)
– Market access the key for EU
• Demand situation:
– Strong growth for lower valued cuts (flank/breast for hot pots):
• Could even be shortages if further demand growth
– Growth potential though also for premium cuts
• Future demand growth to exceed domestic supply
increase?:
• Importance of Government policy though
LJ Colby February 2016
7
8
Hot pot:
LJ Colby February 2016
Large markets for EU live culled sheep (but not lambs):
- Dominated by North Africa/Near East
- Good markets for Romanian and Spanish culled ewes
- Geographical proximity, limited competition (less from Syria, Australia)
- But political/economic, disease uncertainties
EU live sheep exports by region/country, 2007-15
2,000,000
1,750,000
head
1,500,000
Other
Other Mid.East/N. Africa
Turkey
1,250,000
Jordan
1,000,000
Libya
750,000
500,000
250,000
0
2007
2008
2009
2010
2011
2012
2013
2014
2015(e)
Source: AHDB, GTIS, Eurostat
LJ Colby February 2016
9
Steady progress with EU sheep meat offal exports:
- Led by “Chinese” market (but total market much smaller than for meat)
- But also Other Africa (Cote d’Ivoire, Ghana)
- Dominated by Ireland plus smaller volumes Netherlands, Spain, UK
EU sheep meat offal exports by region, 2007-15
6,000
5,000
tonnes
4,000
Other
Middle East/North Africa
Other Africa
H/K, China, Vietnam
3,000
2,000
1,000
0
2007
2008
2009
2010
2011
2012
2013
2014
2015(e)
Source: AHDB, GTIS, Eurostat
LJ Colby February 2016
10
Competitive position of global exporters
• Australia/New Zealand dominate sheep meat trade:
– Two thirds of global total (including intra-EU trade):
• Very strong in Middle East, Other Asia, North America
– Next largest exporters all in EU (UK, Ireland, Spain)
– Global export trade very concentrated
– FTAs already benefit much of NZ/Australian trade
• EU now largest live sheep exporter
• Long term future trade outlook:
– Australia: further growth for lamb (ongoing switch to meat breeds)
– New Zealand: lamb production/exports to decline
• Competition from dairying, environmental legislation
– Leaves room for EU exports but price disadvantage?
• Scope for demand growth:
– Led by China although still some uncertainty about outlook
– With North Africa/Middle East other main growth market
LJ Colby February 2016
11
12
Issues for EU
•
Long term supply availability?:
– Future production at best a stability
– EU to remain net importer although still scope for export development:
• Helps maximise carcase valuation
• Exports worth €310 million in 2014 (including live €201 million)
•
Market access:
– Need to penetrate Gulf States especially Saudi Arabia and UAE
– North American markets: need to implement CETA (with Canada) and
TTIP (with United States):
• Large importers with growing immigrant population
– Such markets offer opportunities for premium lamb
– … plus China
– Cuisines becoming more international
– Even with FTAs: safeguards? EU-Morocco Association Agreement:
• Carcase imports from EU 140% import tariff still applies!
LJ Colby February 2016
To summarise: EU export competitive position
•
Supply availability:
– Wide range of products
• Light/heavy lambs
• Range of cuts including a surplus of low valued ones
• Different production seasonality (within EU and NZ/Aust.)
• Halal slaughter (including non-stun)
– But EU high cost producer vis a vis Australia/New Zealand
•
Demand situation:
– Large Moslim population in proximity to EU:
• North Africa, Near East (taking live and meat); good transport links
– Need access to Chinese market
– Scope for increased trade to Western industrialised economies:
• But requires marketing effort
•
Market access issues:
• Animal health/sanitation approval
• Import tariff rates: need for more FTAs
LJ Colby February 2016
13
Do you want to know more about the global
sheep meat market?
•
Go to:
– http://beefandlamb.ahdb.org.uk/market-intelligence-news/positive-longterm-prospects-for-uk-and-global-sheep-meat-exports/
– A joint AHDB Beef and Lamb and International Meat Secretariat report
“World Sheep Meat Market to 2025”
•
Do not under-estimate the difficulties of the EU increasing its
penetration on the global market
•
Thank you for your attention
LJ Colby February 2016
14