According to the Food and Agriculture Organisation (FAO) of the United Nations, over 70% of total global imports of agricultural products between 1999 and 2008 were accounted for by 20 countries with a similar number of countries responsible for 78% of exports. Of these, the UK was the fifth largest importer, with average annual imports of around US$40 billion, and the 11th largest exporter, with average annual exports of around US$18 billion.
Within any industry there are always influencing factors which make it difficult to accurately predict future performance and agriculture is no exception, with uncertainties around the Eurozone crisis and its impact on exchange rates making it hard to paint a clear picture for 2012.
In Northern Ireland total gross turnover from the food and drinks processing sector exceeded £3.4bn with export sales, i.e. outside the UK, accounting for almost 30% (27.4%) sales whilst Great Britain accounted for 42% of total sales. In recent years agriculture here has benefitted from the relative weakness of sterling versus the euro, but continued slippage in the euro could have a far-reaching impact on the industry, particularly around its export potential.
In the short term, what does 2012 have in store for the UK agri-food industry, and more particularly the NI food and drink processing sector, in terms of export? Can the UK maintain its strong position in the ‘top 20’ as a significant exporter? Will NI continue to benefit from the ‘clean, green’ image of local produce?
A strengthening of the pound against the euro in the coming months would result in UK agri-food exports becoming less competitive and would in turn see imports become cheaper. This would be a major challenge for the sector but as ‘every cloud does have a similar lining‘, input costs for farmers would ease to help sustain overall farm profitability.