Spring lamb exports lower with tighter supplies

After a strong first half of the year, Australian lamb exports have dropped considerably below year-ago levels since July. Recently released September data from the Department of Agriculture and Water Resources show an 8% year-on-year decline for the month, at 17,385 tonnes swt. The proportion of chilled shipments in September was 44% (up one percentage point year-on-year), while frozen volumes accounted for 56%.

Reduced lamb supplies have contributed to the lower volumes shipped during the month. MLA reported eastern states lamb slaughter in September averaged 331,105 lambs per week – down 8% from the corresponding period last year.

Exports for the year-to-date, however, the January to September total lifted 2% above the corresponding period in 2015, to 174,308 tonnes swt, largely underpinned by higher volumes shipped earlier in the year. Furthermore, compared to the five-year average for the nine month period, 2016 is up 16%.

Looking at how the major lamb export markets are tracking so far this year (January to September), compared to last, volumes to:

• The Middle East were down 10%, to 47,229 tonnes swt
• The US increased 8%, to 38,067 tonnes swt
• China increased 23%, to 28,350 tonnes swt
• Papua New Guinea increased 11%, to 11,642 tonnes swt
• South East Asia eased 3%, to 9,434 tonnes swt
• The EU lifted 1%, to 7,018 tonnes swt
• Korea increased 44%, to 5,889 tonnes swt

Lamb carcases accounted for the greatest proportion of total shipments for the January to September period this year, at 36,043 tonnes swt. While 2016 volumes were down 11% on last year, it was off a high base, with year-to-date shipments remaining 21% above the five-year average.  The year-on-year decline was largely attributed to volumes to Bahrain dropping from 7,272 tonnes swt in 2015, to 312 tonnes swt this year – due to the lifting of the Bahrain government subsidy on imported Australian lamb.

There was, however, considerable growth recorded in lamb carcase exports to Qatar and the UAE. According to in-market insights, both markets are very progressive and have seen great expansion in retail supermarkets. For the year-to-September, carcase volumes to Qatar jumped 16% year-on-year, to 11,890 tonnes swt, with the trade supported by government subsidies that apply to chilled whole carcases.

To the UAE, carcase exports recorded 11% growth from last year, to 9,683 tonnes swt – reflective of urbanisation and the developing retail sector over the past several years.

Breast and flap exports lifted 4% for the year-to-date, at 32,384 tonnes swt. China is the primary destination for this product, with volumes reaching 17,490 tonnes swt – an 8% increase from last year. Papua New Guinea is also a major market for breast and flap, taking 10% more than last year, at 9,490 tonnes swt.

Lamb shoulder shipments for the January to September period edged 1% higher than in 2015, to 25,448 tonnes swt. Volumes were spread across a range of markets, the largest being South East Asia (4,937 tonnes swt, down 2%), Japan (3,896 tonnes swt, up 14%), Middle East (3,763 tonnes swt, down 13%), the US (3,340 tonnes swt, down 25%) and Korea (3,076 tonnes swt, up 48%).

Leg exports were slightly lower (3%) for the year-to-date, at 24,820 tonnes swt. The US is the largest market for leg shipments, at 9,460 tonnes swt, although volumes were down 5% year-on-year. Shipments to the Middle East declined 4%, totalling 5,466 tonnes swt for the nine months, while those to the EU were similar to last year, at 3,892 tonnes swt.