Lower imports and production in France

By Bronwyn Magee 

French lamb prices have dropped back in recent weeks, although continue to trend high compared to year earlier levels. In the week ending 14 February, the French reference price stood at £6.11/kg. This is 73p higher than the price achieved for the same week last year, and £1.12 above the five-average.

Since the start of the year, the gap between French and GB prices has narrowed, with GB finished prices continuing to climb in recent weeks. As of the latest week (14 February), the gap between the two series stood at 18p, much smaller compared to the 189p gap seen at the end of last year (27 December).

France typically imports around half of its sheep meat. It is the single most important export market for UK lamb, accounting for 40% of our exports, mostly in half or whole carcases. However, shipments of UK sheep meat to France declined by 14% (5,400 tonnes) on the year, to total 34,000 tonnes in 2020.

While UK production has fallen recently, French sheep meat production has also dropped back, down 1% (700 tonnes) on the year, to total 80,900 tonnes for 2020. As such, total supplies available for consumption in France fell in 2020, down 5% compared to 2019.  

Meanwhile, consumption in France has unsurprisingly been impacted by COVID-19, with a lack of foodservice demand resulting from national lockdowns. Although, there are reports to suggest French retail demand has increased in recent months, which could offer further support to prices in coming weeks.

It seems the tight supply, despite lower consumption, has supported prices up until now. Typically, French prices start a seasonal decline at the beginning of the year, which could be what we are starting to see now.

At a domestic level, the higher prices on the continent, combined with tighter UK supply, have supported high GB prices seen currently. However, as the gap between the two prices narrows, GB prices may become less competitive in France, which may see demand drop back further. This will make an interesting watch point going forwards.

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