Lamb export value on par with year-ago levels

Australian lamb exports in June were valued at $161.4 million FOB, up 9% on the corresponding month last year (ABS). This brought the 2015-16 fiscal year total to $1.78 billion FOB which was fairly similar to the previous year, although 35% higher than the five-year (2010-11 to 2014-15) average.

The total volume of lamb exports for 2015-16 was also similar year-on-year, at 241,913 tonnes swt, although there were greater volumes of lamb shipped to some of the more price sensitive markets, such as Papua New Guinea and China (DAWR). This contributed to the export unit value ($/kg) averaging $6.78/kg for the fiscal year, down from $7.01/kg the previous year – despite the A$ depreciating 13% over the same period, trading at an average of 73US¢ for 2015-16.   

Offsetting the decline in the average unit value was a slight shift in the composition of lamb shipments during 2015-16, with a 3% year-on-year increase in higher valued chilled volumes (valued at $987 million, up 7%) and a 2% decline in frozen product (valued at $786 million, down 8%).

 In 2015-16, compared to the previous year, the value of Australian lamb exports to:

• The US increased 16%, to $617.4 million – 65% higher than the five-year average – despite the average unit value declining 7%, to $9.78/kg. The rise in value was underpinned by an 11% lift in volume for the year (53,618 tonnes swt).
• The Middle East lifted 4%, to $457 million – 44% higher than the five-year average. The average unit value was slightly higher (1%), at $6.71/kg, which somewhat offset the 3% decline in lamb shipments to the market over the same period (67,522 tonnes swt).
• China was 24% lower, at $144.5 million, although this was still 5% greater than the five-year average. Volumes to China (all frozen) lifted 1% year-on-year in 2015-16, to 36,188 tonnes swt, although the average export unit value fell 21%, to $3.38/kg.
• The EU dropped 14%, to $92 million, with a 19% decline in volume over the same period (10,034 tonnes swt).  The export unit value averaged $8.88/kg – up 5% year-on-year.
• South East Asia was 6% lower, at $90.7 million, although 23% higher than the five-year average. The average export unit value to the region was $6.54/kg in 2015-16, down 3% on the previous year.
• Japan declined 16%, to $72 million – although this followed particularly high returns the previous year, due to a rise in shipments driven by high lamb production in Australia. The export unit value averaged $8.56/kg in 2015-16 – 7% lower than the year before.
• Papua New Guinea increased 11%, to $50.3 million. The 19% fall in the average export unit value ($2.91/kg) in 2015-16 was more than offset by a 34% rise in export volumes (15,668 tonnes swt) over the corresponding period – all of which was frozen. 

Looking forward, the Bureau of Meteorology’s positive rainfall outlook, combined with expectations of the A$ to remain in the mid to low 70US¢ range, should continue to support the Australian lamb market over the coming months.

Note: All values are in A$