Middle East trade overview to April 2016

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The red meat trade from Australia to the Middle East has been lower during the first four months of 2016, compared with last year, but the change is markedly different between meat types. Some key factors influencing trade so far this year, besides the significant drop in Australian beef production, include: a reduction in oil revenue and government and consumer spending across the Middle East; a resultant decline in consumer confidence in the region; and the influence of other, cheaper beef suppliers on the market, particularly beef from India and Brazil.

Note: all export volumes in this article refer to January to April 2016, and comparisons are with the same period in 2015.

Beef

Australian beef exports to the Middle East experienced the most significant decline, dropping 29%, to 12,472 tonnes shipped weight (swt).

This was largely driven by a 49% drop in trade to Australia’s largest market in the region, Saudi Arabia, to 5,275 tonnes swt, following the re-entry of Brazilian beef. To put this in context, however, this four-month volume was higher than the full calendar year in 2012, the year before the Brazilian ban, and only slightly lower than the previous calendar year high in 2011.

Other key markets to record lower volumes so far this year include Jordan (down 27%, to 1,138 tonnes swt) and Kuwait (down 15%, to 877 tonnes swt). The UAE was close to steady (up 1%, to 3,294 tonnes swt), while there were increases in trade to Qatar (up 14%, to 903 tonnes swt) and Egypt up (135%, to 511 tonnes swt).

Lamb

Lamb exports were highly variable across the region, even though the end result was a 1% decline in total volumes, to 21,774 tonnes swt.

The most noticeable change coming in the 87% drop in trade to Bahrain, to just 299 tonnes swt, a result of the removal of government subsidies on Australian chilled lamb carcases. Kuwait was another key market to record a fall in trade, down 29%, to 1,246 tonnes swt.

Most other major Australian lamb destinations recorded higher volumes:

• UAE up 13%, to 7,105 tonnes swt;
• Qatar up 30%, to 5,076 tonnes swt;
• Jordan up 14%, to 5,068 tonnes swt; and
• Saudi Arabia up 3%, to 2,415 tonnes swt.

Mutton

Like lamb, mutton exports were 1% lower, at 19,316 tonnes swt, with large variations in the export destinations between 2015 and 2016. The largest change was in the rise in trade to Bahrain, from zero last year to 2,853 tonnes swt, with traders making a clear switch from lamb to less expensive mutton. An 8% increase in mutton exports to the UAE, to 4,688 tonnes swt, made it the largest market in the region so far in 2016, ahead of Saudi Arabia, which saw a 42% drop in trade, to 4,619 tonnes swt.

Other major market changes included:

• Oman up 2%, to 3,024 tonnes swt;
• Kuwait down 24%, to 1,995 tonnes swt;
• Egypt up 164%, to 875 tonnes swt; and
• Qatar down 32%, to 811 tonnes swt.