Sheep meat volumes to Britain alone were back 22% on 2018 at 47,000 tonnes but total exports to the EU in 2019 were slightly more than half the permitted 228,000 tonnes quota, Meat Industry Association chief executive Tim Ritchie said.
Exporters were responding to the political and economic uncertainty caused by the prolonged Brexit negotiations but were also reacting to the strength of other markets, especially China.
For the last two years NZ lamb exports have tracked below historic levels.
In 2017-18 116,696 tonnes were exported, 1% less than the previous year, with volumes to the United Kingdom back 6%.
Beef + Lamb statistics show red meat exports to the EU between October 2018 and June 2019 were back 18% on the previous year and 29% lower than the same period in 2014-15.
Over that same period exports to North Asia, which includes China, were up 16% to 126,400 tonnes, accounting for 37% of all lamb exports.
That shows NZ exporters are not abusing their preferential sheep meat quota but act to preserve market stability, Ritchie said.
“We are only shipping if markets can sustain it.”
The convincing electoral victory late last year by British Prime Minister Boris Johnson restored stability to the UK market.
Silver Fern Farms chief executive Simon Limmer said the new timelines for resolving Britain’s divorce from the EU mean the important Easter and Christmas trade is unaffected.
Alliance sales manager Shane Kingston said there is relief the feared disruption from Brexit never eventuated and the company’s contingency plans were not needed.
The UK formally left the European Union on January 31, which also marked the start of negotiations on trade and relations to be completed by December 31.
Ritchie said that gives exporters 11 months of business-as-usual but he warns failure by the parties to agree trade terms will potentially have a significant impact on NZ.
Each year about 30% of UK lamb is exported to Europe but if there is no agreement that lamb will be sold in Britain.
Beef + Lamb senior international trade manager Esther Guy-Meakin says there is still some uncertainty.
“Depending on the EU-UK bilateral trade agreement there is still some uncertainty about how the market will respond, particularly if the UK is unable to secure favourable rules for its meat exports to the EU.
“This will have consequences for third-party countries including NZ, who are trading into both markets.”
If the EU and UK agree on trade attention will then turn to negotiations with countries such as NZ.
MIA trade and economic manager Sirma Karapeeva said for NZ those negotiations will centre on a NZ-UK free-trade agreement.
“The current EU/NZ trade negotiations are under way and the red meat sector is looking for an outcome that builds on its current WTO access rights.”
