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Thursday, March 22, 2018

Qatar load of sheep heading that way.

By Matt Dalgleish  |  Source: MLA, ABS, Mecardo

Key points

  • Qatari demand for live sheep remains firm as expatriate World Cup workforce increases the countries red meat protein appetite.
  • A boost to total live sheep flows noted early in 2018 from less traditional destinations, such as Turkey and Israel.
  • “Other countries” categories taking the lions share of live sheep trade for the first few months of 2018, but unlikely to remain in top spot as demand from more traditional export destinations returns.

2018-03-22 Sheep Fig 1

2018-03-22 Sheep Fig 2

2018-03-22 Sheep Fig 3

Strong volumes of live sheep to Qatar throughout the final quarter of 2017 kept total live export flows trending above average, despite a decline in consignments to Kuwait in the final stages of the year. A resurgent Israel and Turkey also noted early in the 2018 season to push the “other countries” category to the top of the export destinations market share ranking.

Figure 1 highlights the seasonal pattern in total live sheep exports for the current and previous season. During the last quarter of 2017 volumes trekked 14% higher than the five-year seasonal average pattern, pushed higher by above average Qatari demand in November and December as ongoing World Cup preparations necessitate a higher expatriate workforce and a subsequent lift in red meat protein requirements.

The pattern of demand out of Qatar for live sheep is outlined in figure 2 and highlights that seven of the twelve months last season volumes shipped were significantly above the five-year average monthly pattern. Indeed, the 2017 season saw monthly Qatari trade flows run 25% higher on average across the year when compared to the five-year pattern and 13.5% above the 2016 levels.

The live export flow during the last quarter of 2017 was also supported by a doubling in Israeli demand compared to the seasonal quarterly average levels and a return of Turkish appetite for live sheep during November of over 60,000 head.

Indeed, the increased Israeli and Turkish trade has continued into 2018 with over 9,000 head sent to Israel in January and nearly 73,000 head shipped to Turkey during February. The early season surge in flows to these two destinations is pushing the “other countries” market share to the top of the ranking so far in 2018 to just over 40% - Figure 2.

What does this mean?

The current market share ranking of the “other countries” category is probably a bit overstated due to the very large flows to Turkey seen during February. Similarly, the likelihood in the coming months for an increase in live sheep flows to Kuwait will see the market share values normalize somewhat for the 2018 season.

Although what has been undeniable has been the growth in flows to Qatar on the back of their successful soccer World Cup bid. The increase in live sheep flows to Israel and Turkey, although at times sporadic, reinforces the benefit of having a diverse export sector as a decrease in demand from a normally regular consumer, like Kuwait, can be offset by other players. This reinforces the strategies undertaken by levy bodies such as MLA to promote our sheep product (in all its forms) into as many markets as possible.

Mecardo information is provided to assist in your marketing decisions. It contains a range of data and views on the current market. It is not intended to constitute advice for a specific purpose. Before taking any action in relation to information contained within this report, you should seek advice from a qualified professional. The information is obtained from a variety of sources and neither Mecardo nor Ag Concepts Advisory will be held liable for any loss or damage whatsoever that may arise from the use of information or for any error or mis-statement contained in this report. 


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