Tuesday, October 20, 2020

First half food & drink exports fall for first time in five years

UK food and drink exports for the first half of 2020 have fallen for the first time since 2020, a new industry report has revealed.

The data, published in a report by the Food and Drink Federation (FDF), shows that that when compared to the same period last year, exports had fallen by 13.8% to £9.7 billion.

Exports to all but three of the UK’s top 20 export markets fell, with sales to China (+0.3%), Canada (+6.7%) and Norway (+46.9%) seeing growth during the first half of the year.

Of the UK’s top ten export product categories, only pork saw positive value growth (+17.5%) with sales of £300m, largely driven by exports to China which purchased £132m of UK pork in H1.

While the fall in exports is clearly linked to the global impact of COVID-19, analysis by KPMG as part of the report, highlights that differing markets are at varying stages of the COVID-19 lifecycle. China is currently experiencing a period of growth, whereas other nations are in recession.

KPMG identified brand trust as a key driver of consumer purchasing decisions across all markets and an opportunity for exporters throughout the remainder of the year. While overall exports of branded products fell by 7.1% in H1, sales of branded products to non-EU markets grew by 1.9%.

Looking further ahead, the UK-Japan preferential trade agreement announced in September presents a key opportunity for exporters, with Japan currently the world’s largest net importer of agrifood and drink, and the UK’s 19th biggest market in H1 – worth £124.5m.

Demand for imported food and drink in Japan is growing because of its ageing population and a continued shift toward Western consumption patterns.

To support the recovery of UK exports post-COVID-19, the FDF, Food and Drink Exporters Association (FDEA) and the Agriculture and Horticulture Development Board (AHDB), have produced an export guide to help businesses successfully navigate the export process.

The guide signposts a range of support that can help exporters that have been impacted by COVID-19, and support for businesses post EU Exit transition.

Dominic Goudie, Head of International Trade, FDF, said: “A fall in exports in the first half of 2020 demonstrates the huge challenge currently facing UK food and drink exporters.

We also have serious concerns about our access to existing EU trade agreements, with more than £1.7 billion of UK exports at risk where continuity deals haven’t been agreed.

“However, there remain many opportunities overseas as we navigate our way through economic recovery, strengthen our resilience as an industry, and build relationships through new future trade agreements such as with Japan – the world’s biggest net importer of food and drink.

“Looking ahead, it is vital that we continue our work with Government and industry partners to deliver sustainable export growth over the next few months and beyond the end of the transition period in January 2021 to ensure our industry has the support it needs.

“Our export guide, made in collaboration with other industry bodies, aims to help navigate businesses through the export process with a range of practical support and advice.”

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