Turkish lira crisis stirs concerns with Irish cattle exporters
Turkish Lira devaluation against the US dollar is raising concerns for Irish cattle exporters who were betting on this market development. Turkish Lira has tumbled over 40% over USD since the beginning of the year and the country's economic outlook presents certain sings of a recession in the following months, reports Agriland magazine.
The Turkish Government has been vocal on its preference for approximately 500,000 young cattle to be imported annually for further feeding by Turkish farmers but that volume could drop any time due to the uncertainty present in this market and poor economic conditions.
"The main issue is the weakness of the Turkish lira. When Ireland started sending animals there in autumn 2016, the exchange rate was €1 to 3.2 lira, as opposed to over 4.2 lira last autumn, and up to 7 lira now.
Understandably, the knock-on impact on food price inflation will be significant for consumers whose earnings in lira are unlikely to rise to fully compensate for these fluctuations. Other competitors supplying livestock to Turkey will also be faced with the same challenge. However, it is likely that customers will be highly priced sensitive in their buying", explained Joe Burke, beef and livestock manager with Bord Bia.
Turkish livestock imports are conducted through the state agency ESK and not directly to private buyers, as Irish exporters would want. Nevertheless, livestock exports to Turkey are down by 20% by now, with only 9,000 weanlings delivered to this market.
"So far in 2018, we have exported about 9,000 head to date which is down about 20% on the equivalent figure in 2017. We would have been hoping for an increase on last year’s 30,000 head because that took a while to get going and there was a hope that you’d be building on that trade. At the moment there is nothing going to Turkey", admitted Eddie Punch, general secretary of the Irish Cattle and Sheep Farmers’ Association (ICSA).
meantime, Italy has increased its livestock imports by 18% and there are certain hopes of growth in this market. "Italy has improved a little bit in 2018 compared to 2017 and it would be the real prize if we could get a significant amount of weanlings out there", added Punch.
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