Approximately €570m was wiped off the value of Irish food and drink exports last year due to the fall in the value of Sterling following the UK’s Brexit vote.
That’s according to Bord Bia which launched its Export Review and Prospects Report today warning that exports markets for Irish food and drink will continue to be challenging this year and that prepared food exports to the Britain will remain under pressure.
It said that the underlying weakness and volatility of sterling negatively affected the competitiveness of Irish exports, reducing the value in trade by a potential €570m.
The main sectors which were hit were dairy, beef and beverage exports and Irish companies had beef affected to take various degrees. "Most categories with the exception of seafood were back in terms of exports to the UK in 2016."
Bord Bia Chairman Michael Carey said that export trade figures are not down by €570m, but he said Irish food and drink exports were facing challenges in the UK market before Brexit.
"It's very difficult for anyone to be definitive on the exact figure."
However, he also said that Irish beef exports will face increasing challenges in 2017. Meat and livestock accounts for 33pc of total Irish food and drink exports and within that beef exports are worth in the region of €2.38 billion.
The volume of cattle coming through Irish meat processors in 2017 is predicted to increase by 6pc and Michael Carey said that would present challenges, but work was continuing to increase market access to new countries. However, he said the UK will continue to account for around 50pc of Irish beef exports.
Overall, the figures presented by the Minster for Agriculture Michael Creed showed an increase of 2pc in overall export values to reach €11.15 billion, a new record high.
This marks the food and drink industry’s 7th consecutive year of growth and an expansion of 41pc or €3.3 billion since 2010.
The strongest performing sectors last year were prepared foods, beverages and dairy product and ingredients.
Sales in international markets continue to drive export growth, representing 80pc of total export growth this year.
According to Minister Creed one of the notable features of this achievement is the impact of market diversification in the year in which the UK decided to leave the European Union.
"While trade with the UK fell by 8pc, triggered by challenging exchange rates, uncertainty arising from Brexit and further competitive pressures, this was offset by increased exports to international and emerging markets such as North America (+€200 million to reach €1.1 billion), China (+35pc to reach €845 million) and the rest of Asia (+6pc to reach €330 million).
"An overall increase of 13pc in shipments to international markets, to reach a value of approximately €3.5 billion, was particularly remarkable" added Minister Creed.
Bord Bia says export markets look set to remain challenging in 2017 amid ongoing market uncertainty. However, the pickup in global dairy demand is expected to continue while further opportunities for growth are likely in beverages.
Increased beef export availability may put some pressure on returns while prepared consumer foods exports are likely to face on-going competitive pressures, most notably the UK.