independent

Sunday 20 April 2014

Middle East cattle deal to provide €64m boost

THE economy is set for a massive boost next year from the Middle East in a deal worth up to €64m.

Egypt, Libya and Lebanon look likely to permit live cattle exports, giving a timely injection into the Irish agrifood sector.

Veterinary clearance has been given for the resumption of cattle exports and the viability of shipping livestock to the eastern Mediterranean is being considered by a number of companies. Such exports stopped in the mid-1990s in the wake of the BSE scare.

A resumption of live exports to these markets would provide a multi-million euro cash injection for farmers and give an outlet for tens of thousands of additional cattle from the dairy herd due to come on stream over the next 12 months. Agriculture Minister Simon Coveney has indicated that suitable ships for the trade will be approved by the middle of February at the latest.

While cattle prices here have been relatively strong, a difference of up to €200 a head developed in recent months between prices here and those in our main export market, Britain.

Farmer representatives have accused beef processors of manipulating cattle prices, and they believe the re-opening of the live trade will provide competition. Mr Coveney alluded to this at the recent AGM of the Irish Cattle and Sheep Farmers' Association (ICSA) when he admitted that the live trade might keep beef processors "honest".

At its height in the mid-1990s,the live trade to the Middle East was worth over €130m and 260,000 cattle were shipped. Egypt took about 175,000 head in 1995, with Libya importing more than 80,000 head. However, the markets closed following the outbreak of BSE in 1996. Any resumption of the trade would be lucrative but could involve serious risks.

The instability in both Libya and Egypt means live shippers would need to be paid for stock before they were shipped.

There have also been suggestions that exporters will not start shipping cattle until numbers traditionally increase in the autumn and prices fall. However, the farm organisations have all called on Mr Coveney to ensure the live trade re-opens as quickly as possible.

As well as increasing competition in the domestic market, live exports are viewed as the perfect outlet for extra cattle from the dairy herd.

These would not be suitable for the high-end beef markets Irish processors have cultivated in Britain and Europe, and farmers are wary that an oversupply of this stock could undermine the price paid to specialist beef finishers.

ICSA president Gabriel Gilmartin said live exports were "absolutely essential" to ensuring strong cattle prices.

"The more destinations we have for live cattle exports the better," said Mr Gilmartin.

Irish Independent

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