Weaker Sterling likely to impact on Irish lamb price on main markets

A weaker Sterling is likely impact on the price Irish lamb makes on its main export markets, according to the AHDB (the body for British beef and lamb).

Due to the weaker Sterling, which makes Irish lamb more expensive to UK buyers, Irish lamb exports to the UK are unlikely to have much of an impact on the UK sheep trade this year.

The weaker Sterling also means that the UK lamb price is cheaper in euro terms, making it cheaper for French buyers to source sheepmeat in the UK.

According to Bord Bia, France and the UK are the main outlets for Irish sheepmeat, accounting for 63% of total shipments in 2015.

And, fluctuations in the exchange rate market, especially a weaker Sterling, could have a negative impact on the volumes of sheepmeat exported to these countries.

Official figures from the European Central banks show that the Sterling has weakened considerably since the start of this year.

It shows that €1 bought 78p during the first week of the year, this dropped to 74p last week. This is a drop of almost 7%.

Source: European Central Bank
Source: European Central Bank

EU markets

According to the AHDB, the price of EU heavy lambs is likely to fall slightly, due to a weaker Sterling, the collapse in skin price and lower global demand.

However, sheepmeat production is likely to increase in Spain, leading to an increase in the volume of Spanish lamb available on the European market.

French imports of sheepmeat from the UK have also declined this year, falling by 14%. But, the volume of Irish lamb available on the market has  remained stable, despite the weaker Sterling.

The AHDB also reports that the outlook for sheepmeat in France will continue to be influenced by lacklustre consumer demand and the consumer preference for domestically produced lamb.