New Zealand utilisation of its sheep meat quota with the EU last year increased sharply – up by eight percentage points to 76 per cent.
This is the highest figure since 2011, although it remained well below that of the previous decade when New Zealand filled or almost filled its quota. This rise reflects some increase in export availability and lower demand on the Chinese market. There has been some switch back into its traditional markets, led by the UK.
In contrast, Australia again filled its much smaller quota. While Australia’s global lamb exports are only 20 per cent lower than those of New Zealand, its quota allocation to the EU is only a fraction of that of New Zealand. Both Uruguay and Chile only filled around one third of their quotas, a proportion which is well down on the previous year. Argentina only used a fraction of its quota, the lowest figure for many years. Consequently, given the increase for New Zealand last year, the proportion of the total EU quota allocated increased to 70 per cent, well up on the previous year’s low of 64 per cent.
Looking towards 2016, annual quotas are unchanged, with the exception of Chile whose quota increases by 200 tonnes per annum and so goes up to 7,400 tonnes.
Also large differences in EU high quality beef quota usage
The EU High Quality Beef (HQB) quota is allocated on a July to June year and in the first six months of the current year, 2015/16, Australia, Uruguay, Brazil and New Zealand have all used up at least half of their annual allocation. In the case of Brazil and Australia the proportion was nearer two thirds as the EU remains a price premium market, and so attractive to exporters. In contrast, for Argentina, which has the largest quota of 29,500 tonnes, the allocation in the six month period only amounted to 37 per cent of the annual total. However, the Argentine beef industry gives a high priority to this quota and with the new Government introducing a more favourable export policy it will be interesting to observe whether quota utilisation for the full increases to above the 76 per cent of 2014/15.
Both the United States and Canada no longer supply significant quantities under the HQB quota. They now mainly supply high quality beef, especially chilled, through the autonomous quota of 48,200 tonnes. Argentina, Australia, New Zealand and Uruguay also able to supply under this quota. There are no import tariffs, unlike for the HQB quota, and the quota was virtually filled in 2014/15. In the period 1 July 2015 to 11 January 2016, of the annual total over half, had been allocated.
A new EU beef quota of 12,000 tonnes for the Ukraine has been introduced from January 1, 2016. Under this quota no duties apply. In 2014 the Ukraine exported 21,500 tonnes of beef in total but trade with the EU was negligible.
Implications for UK
Of the individual Member States the UK is the largest importer of sheep meat from the global market so any changes in quota utilisation normally has a bearing on trade especially in relation to New Zealand. In the case of beef, the UK is the fourth largest importer in the EU being well behind the Netherlands, Italy and Germany. Only Australia is a significant supplier of high quality beef to the UK market. However, as much of the product imported into the EU is premium beef it inevitably does have implications for the UK market, including in relation to its exports of prime beef to other Member States.