August lamb exports ease with production

August is typically one of the lower months of the year for Australian lamb export volumes, as production levels recede during winter. Following three years of historically high lamb exports, and although the expectation is for this trend to continue for 2016, August this year marked the lowest volume for the month since 2012, at 16,001 tonnes swt – down 9% from the same time last year.

Underpinning the decline, eastern states lamb slaughter averaged 316,882 head per week during August – down 9% from the same time last year.

Higher value chilled lamb exports in August declined 8% year-on-year, to 7,325 tonnes swt, while frozen shipments fell 9%, to 8,676 tonnes swt.

Despite the drop in August shipments, the calendar year-to-date total remains higher than year-ago levels. For the January to August period, lamb exports were up 3% on the corresponding eight months last year, at 156,922 tonnes swt.

Shipments to Australia’s three largest (in volume terms) lamb export destinations – the Middle East, the US and China – recorded year-on-year declines in August, while, encouragingly, some of the higher-valued markets (EU and Japan) registered growth.

Australian lamb exports to the Middle East in August declined 22% year-on-year, to 4,674 tonnes swt. In-market reports suggest this was largely due to the end of Ramadan coinciding with the beginning of summer holidays (which run during July and August) – when many residents leave for travel, particularly in the UAE, Qatar and Kuwait. The trade is anticipated to pick up again with the end of the holidays in September.

Volumes to the US declined 9% year-on-year in August, to 3,318 tonnes swt, although this was off the back of particularly high levels in 2015 – the five-year average (2011-2015) for August is 2,914 tonnes swt. Combined with lower Australian production, cold storage levels in the US and comparatively cheaper prices for other proteins (poultry, pork, and domestic beef) contributed to lower lamb export volumes in August.

Lamb shipments to China were down 12% on year-ago levels, at 2,025 tonnes swt, with reports from AgriHQ suggesting that cheaper domestic Chinese lamb may be placing competitive pressure on imports. However, demand is reportedly anticipated to strengthen in the lead up to Chinese New Year.

Exports to South East Asia fell 21% in August, compared to last year, at 973 tonnes swt – largely underpinned by lower volumes to Malaysia (down 21%, to 656 tonnes swt) and Indonesia (down 78%, to 37 tonnes swt).

In contrast, lamb shipments to Papua New Guinea – a relatively high volume but lower value market – jumped 67% year-on-year, to 1,659 tonnes swt. The EU (597 tonnes swt), Korea (564 tonnes swt) and Japan (526 tonnes swt) recorded 8%, 46% and 9% growth year-on-year, respectively.