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Oceania Sheep Trade Sees Strong Start to 2011

04 March 2011

The sheep meat trade in Oceania has started the year strongly with prices in both New Zealand and Australia continuing to strengthen in response to tightening domestic and global supplies, firm demand from export markets coupled with favourable exchange rate movements, according to Peter Duggan, Strategic Information Services, Bord Bia.

To date in 2011, lamb prices in New Zealand are some 53 per cent higher at €3.32/kg, reflecting the expectation that lamb supplies will remain tight for the 2010/11 marketing season.

Almost 10 per cent of the increase in price was attributable to the New Zealand Dollar strengthening against the Euro relative to the same period last year.

The tighter NZ supplies are reflected in export volumes, which were 19 per cent lower in January than a year earlier at 31,100 tonnes (pw). Shipments to the UK and France fell by 29 per cent at 6,300 tonnes and 1,800 tonnes, respectively.

Similarly the Australian sheepmeat industry has benefited from tight domestic supplies.

To date, Australian lamb prices have strengthened by 39 per cent on corresponding 2010 levels to €3.94/kg, although the real gain is closer to 25 per cent given that the Australian Dollar has strengthened by 14 per cent against the Euro to date in 2011.

However, stronger Australian lamb supplies are anticipated by the MLA over the course of 2011 in response to restocking and increased ewe lamb retention in 2010, leading to lamb production increasing by seven per cent to 436,000 tonnes (cwt) for the year.

Looking ahead to 2012, lamb production is likely to increase modestly given that the flock is expected to grow by two per cent to 69 million head in 2011. Australian lamb exports are expected to increase by seven per cent to 167,000 tonnes (pw) in 2011 as overseas demand in the Middle East, China and South East Asia should remain strong.

March 2011

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