By Matt Dalgleish | Source: DAWR
The Department of Agriculture and Water Resources (DAWR) release of the July sheep and lamb export figures indicate tight winter supplies are having an impact on export consignment volumes with monthly totals for both lamb and mutton exports reaching a seasonal low.
Figure 1 highlights the seasonal monthly export pattern for lamb, overlaid with the 2015 trend, the five-year average seasonal trend and the “normal” variation in the range for the series (as indicated by the green band). This band takes into account historic movements in lamb export flows and represents the range where lamb export volumes have fluctuated for 70% of the time.
As shown by the five-year average trend it is not uncommon for lamb export volumes to decline during the Australian winter as tight seasonal supply conditions, and the resultant higher domestic prices, have an impact on trade volumes. Although, until recently lamb export volumes for the 2016 season had been remarkably resilient, trending above the “normal” range since the start of the year. The July lamb export figures of 13,967 tonnes swt sending the 2016 pattern crashing to the bottom of the 70% range with a 33.6% decline from the June total.
Analysis of the July lamb export data by destination showing much of the recent decline in trade flow attributable to an uncharacteristic slump in consignments to the Middle East – figure 2. Indeed, the July lamb export volumes to the US, Asia and Europe for 2016 were on par with the July 2015 levels. However, lamb export flows to the Middle East for July 2016 of 3,797 tonnes swt coming in 38.3% below the July 2015 level and 29.3% under the five-year average for July.
Figure 3 displays the seasonal monthly export pattern for mutton which has a fairly pronounced mid-winter trough. The July 2016 mutton export volume of 5,314 tonnes swt shown breaching the bottom of the 70% range as a result of a decline in sheep consignments to “other countries” outside of the primary trading zones of the Middle East, Asia, Europe and the US. Indeed, a year on year comparison of the July figures of sheep exports to “other countries” shows a significant fall from 2,920 tonnes swt in 2015 to a mere 218 tonnes swt in 2016.
As the five-year average seasonal trend for mutton exports demonstrates there is a noticeable pattern of lower trade volumes during winter. Although the July trough is somewhat lower than normal it is likely to rebound as we head toward spring.
Despite the average seasonal trend for lamb exports showing a less pronounced winter trough pattern than mutton it is not uncommon to see trade volumes contract during the colder months. The July slump in Middle Eastern lamb exports, while uncharacteristic, wouldn’t be cause for concern unless the trend continued into the remainder of the season.
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