Thursday, 29 October 2020
Exports of NZ sheep meat are forecast to shrink in 2020/21, driven by uncertain global economic conditions and lower domestic production.
According to the latest New Season Outlook by Beef + Lamb New Zealand (B+LNZ), exports of lamb are forecast to fall 6.5% year-on-year, while mutton could see a 10% downturn in shipments.
A smaller NZ lamb crop is expected in 2020/21 due primarily to the drought, while more ewes are expected to be retained for flock rebuilding. These factors are both expected to contribute to lower domestic sheep meat production, and lower exports.
Total export values for sheep meat are forecast to fall 15% to $3.5 billion, largely driven by COVID-19 disruption. The decline in foodservice sectors around the world has negatively affected export values of NZ lamb, with weaker consumer spending expected to continue to weigh on shipments. The drop in consumption has also reportedly led to stock build-up in some markets, which may reduce demand for NZ sheep meat.
However, the ASF-related protein shortage in China is expected to remain a positive driver for NZ exports during the forecast period. China, being ahead of many others in the COVID-19 storyline, is one of the few global economies forecast to grow year-on-year in 2020. However, downside risks to trade include increased price sensitivity among consumers, substantial sheep meat inventories caused by increased importing ahead of Chinese New Year celebrations, and of course how COVID-19 cases continue to be managed.
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