Theyre not eating our lamb, there

With the ASEAN-Australia-New Zealand Free Trade Area Bill receiving bipartisan support in Parliament, Federated Farmers is increasingly concerned that lamb and mutton is being left behind and could miss out on the benefits of the ASEAN Free Trade agreement (FTA).

“Simply put they’re not eating our lamb, there,” says Don Nicolson, President of Federated Farmers.

“With the FTA to be phased in from 2010, the time to act is now. If you are in any doubt about that, the market reports issued by Meat & Livestock Australia (MLA) provide cold comfort.

“We seem to be going backwards on lamb and mutton in both numbers and market share.

“While we are moderately strong in the foodservice sectors of Indonesia, the Philippines and Thailand, our lamb and mutton has only a toe hold in Singapore and Malaysia.

“This is of concern given the impending Free Trade Agreement with Malaysia, which is a true Asian Tiger and New Zealand’s eighth largest export market overall. Singapore, our tenth largest export market, is a fully developed economy with a population larger than New Zealand.

“The MLA report further states that New Zealand lamb and mutton exports to the region have fluctuated and identifies the reason why. That being the price premium received from supplying European Union (EU) quota.

“Instead of using the EU quota as a backstop while new markets are developed, it seems to have become a crutch that New Zealand’s big meat processors depend too heavily upon.

“There is a pervasive, ‘I’m alright Jack’ attitude among the big processors that is stifling new market orientation. While on the surface beef appears to be fairing a lot better than lamb and mutton, we are not set up for the long haul.

“In 2008, New Zealand exported a record 37,837 tonnes to South East Asia with Indonesia figuring prominently. While Australia exported 63,862 tonnes, there was again dependency on the Indonesian market.

“It is more significant to plot New Zealand’s market share in terms of high value imported chilled beef. Indonesia remains the only bright spot but our 14 percent compares unfavourably with Australia’s 77 percent market share.

“In the case of Malaysia, our market share is down 59 percent on what it was in 2004. We used to supply over a third of Malaysia’s imported fresh beef needs but that is down to 14 percent in four years. By contrast, Australia now supplies 83 percent of Malaysia’s imported fresh/chilled beef up from 58 percent in 2004.

“While in value terms it still seems minor when compared to established markets, ASEAN is a strategic market of 600 million people offering phenomenal economic growth and is right on our doorstep.

“This highlights an even bigger issue and that is to understand the region’s cultural and religious nexus.

“ASEAN offers amazing opportunities for New Zealand’s farmers, but we ourselves need to understand our ultimate customers better to ensure our exporters do,” Mr Nicolson concluded.