AUSTRALIAN lamb exports have grown by 50 percent in the past 10 years, but there are still opportunities for growth in some key markets, according to MLA’s general manager – international markets, Michael Finucan said.
Mr Finucan said lamb exports grew from 161,037 tonnes in 2007 to 242,285 tonnes swt in 2016 and continue to have a positive outlook.
“2016 saw record export volumes, and despite tighter suppliers, 2017 is predicted to see only a 3pc drop with 235,000 tonnes expected to be exported.
“While current supplies remain tight, placing pressure on price for overseas customers, the long term fundamentals remain positive for the Australian sheep meat industry, especially in some key export markets,” he said.
Opportunities to expand US lamb consumption
Mr Finucan said the United States of America was the main export destination for Australian lamb in 2016–17 in volume and value terms, although lamb is the least consumed protein at 0.4kg per person annually.
“Lamb remains a niche and somewhat unfamiliar protein to US consumers, with 39% of consumers never having bought lamb.
“While this is primarily driven by a lack of familiarity, some taste concerns and limited knowledge of how to prepare it, there are opportunities to expand lamb consumption, particularly high-value, high-quality cuts appealing mostly to variety-seeking consumers with high disposable income,” he said.
MLA estimates” that 60pc of US lamb imports are consumed in the foodservice channel.
Lamb has been popular in foodservice due to its reputation of being a niche product appealing to higher-end consumers,” Mr Finucan said.
“Lamb maintains its position as a core protein at fine dining restaurants; however, strong growth is occurring in other foodservice segments such as quick service restaurants and family and casual dining.
Growth in these segments has been driven by some changing demographics and the shift in demand for more convenient and affordable lamb options such as lamb burgers, meatballs and kebabs.”
China still Australia’s biggest sheep meat destination
Mr Fincan said China is the largest sheep meat producer in the world and although per capita consumption is low at 3.1kg, it is forecast to continue to gradually increase.
“Imports comprise a very small proportion of sheep meat consumed and it is generally a very price-sensitive market influenced heavily by local supply factors based on the commodity nature of the product.
“Chinese lamb is particularly competitive on price, freshness and availability for consumers,” he said.
Mr Fincan said in 2016–17, China was Australia’s biggest sheep meat destination by volume, with a growing share of lamb, as mutton supplies continue to tighten.
“Australia exports predominantly breast and flap, used in further manufacturing and hotpot rolls for traditional hotpot restaurants.”
Although Chinese consumers perceive lamb to be a superior protein of high nutritional value, consumers find it less versatile, less convenient and more difficult to prepare and cook compared to pork and chicken, Mr Finucan said.
“Due to this it is mostly eaten out with a large proportion of Australian exported lamb consumed in the foodservice sector, particularly in hot pot restaurants.
“China remains a key market for Australian sheep meat; however, growth will be dependent on ongoing market access challenges and the need for improved cold chain infrastructure outside first tier cities.”
Lamb is biggest Australian sheep meat import to Middle East
Mr Finucan said the Middle East represents a significant market for the Australian sheep meat industry.
In 2016-17, 56 per cent of the exports to the region from Australian sheep meat were lamb. The key markets in the region are the UAE, Saudi Arabia, Qatar, Jordan, Kuwait, Bahrain and Oman. Sheep meat is a traditional dish in the region with consumption at 9.9 kg per person a year. In many countries in the region lamb is seen as the family favourite and the preferred meat of choice.
Mr Finucan said there are a number of factors that are expected to help drive the underlying growth and demand for imported products in the region, including, urbanisation, westernisation and growth in a number of wealthy households, a young population, large expat professional populations, forecast low inflation and a developing tourism sector.
“Australia has a strong well-regarded position in the market and dominates import supplies.
“With the improvement in cold chain handling infrastructure over recent years in many countries in the region, we have seen increases in chilled export volumes,” he said.
“This, as well as the increased number of daily flights into the region by the major airlines, has helped develop the chilled airfreight business, which now sees fresh Australian lamb carcases shipped to the market and into some retail space within 48 hours from processing in Australia.
“Chilled sheep meat exports now make up 53pc of volume shipped, in a region that was traditionally dominated by frozen shipments.”
Mr Finucan said the MENA region is also the largest market for Australian live sheep shipments.
“Opportunities in the region remain positive. however there are a number of market access irritants that challenge the market.
“The reliance on oil and gas export revenues and the presence of conflict contribute to raised levels of political and operational risk in the MENA region.”