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UK food exports surging outside of EU according to latest figures

Author: FarmingUK Published: 12th January 2018 10:17

  Farming in th e UK

UK food exports surging outside of EU according to latest figures

UK food and drink exports are surging, according to the latest figures released by the Food and Drink Federation (FDF).

Exports were up by nearly 15 per cent year-on-year in the third quarter of 2017, and export growth was particularly strong to countries outside the European Union - providing some encouragement for those who are concerned about the country's prospects post-Brexit.

Exports to non-EU countries were up by more than 18 per cent in the three months between July and September.

The figures were released as the UK Government prepared to embark on negotiations to set out the UK's future relationship with the remaining members of the EU.

European Union negotiators finally agreed to move onto trade negotiations following agreement on the first stage of the Brexit negotiations - on the divorce bill the UK will pay, on the future rights of EU citizens and on the Irish border.

The UK says it wants to avoid a hard border between Northern Ireland and Ireland, although the Government has continued to insist that the UK will leave both the customs union and the single market when it withdraws from the European Union in 2019.

Important market

Farmers' leaders have been warning that the European Union is the UK's most important market for the UK food sector.

However, the FDF figures show that, although the EU still accounts for the biggest share of food and drink exports, the share taken by non-EU markets is increasing.

Non-EU markets now take 41.2 per cent of exports, although supporters of the single market will point to the fact that the EU still takes 58.8 per cent of the UK's food and drink exports.

Non-EU countries are amongst the fastest growing markets for food and drink. The Philippines, Iceland and South Korea were the fastest growing markets in the third quarter, according to the figures.

An increase of 289 per cent in exports to the Phillipines was led by higher demand for UK animal feed, pork, whisky, cheese and salmon.

Exports to Latvia were up 116 per cent, boosted by sales of whisky, wine, gin and fish fillets. Higher demand for breakfast cereals, soft drinks, chocolate and fruit contributed to the overall increase in food and drink exports to Iceland.

Butter and spreads were amongst the beneficiaries of an increase in exports to South Korea following a free trade deal with the EU. The top exports to Romania were whisky, chicken and cheese.

The fastest growing export products overall in the first three quarters of 2017 were liquid milk and cream - up more than 73 per cent on the previous year - butter and spreads - up 58 per cent - and vegetable oil - up 46.5 per cent.

Chinese target market

China was identified as one of the top three target markets for food and drink companies, according to a survey carried out by Grant Thornton on behalf of the FDF.

The latest figures show that China was one of the higher growth markets from January to September 2017. Export growth to China was up by 38 per cent in the first three quarters of 2017 - rising to £420 million from £305 million during the same period last year.

The importance of food and drink exports was recognised recently when Greg Clark, the Secretary of State for Business, Energy and Industrial Strategy, included the sector in the Government's new industrial strategy. A new food and drink sector council will be created as part of the strategy.

This move was welcomed recently by Defra Secretary Michael Gove when he spoke at the CLA rural business conference.

"Our exports now surpass £20 billion for the first time, up by nearly 10 per cent on the last year," he said. "That growth has been built on the reputation for quality built by people in this room.

"The food chain brings £110 billion to the UK economy," he said. "Food and drink is our biggest manufacturing sector.

"That is why I am so delighted that in the industrial strategy published by my colleague Greg Clark recognised the vital importance of food and drink, with a new food and drink sector council.

"This council will help pair the way for a for a food and drink sector deal in order to ensure that responsibility for effectively marketing and supporting primary producers and others is at the heart of the government's industrial strategy.

Lower quality

Concerns have been raised by farmers' leaders that the UK could be opened up to imports of lower quality, lower welfare food in any free trade agreements struck with non-EU countries.

US president Donald Trump's commerce secretary Wilbur Ross told business leaders at the Confederation of British Industry (CBI) conference in London that any post-Brexit deal with Washington would hinge on the UK scrapping rules set by Brussels, including regulations governing imports of chlorinated chicken. Chlorine-washed chicken is currently banned by the EU.

But Michael Gove told those attending the CLA conference: "When we talk about the industrial strategy it is important to recognise that we are not just world leaders in the way in which food and drink has grown as an export in the course of the last couple of years. We are world leaders in terms of quality.

"We have the world's highest animal welfare standards, we are moving towards having the world's most ambitious environmental goals and also embedding the most rigorous approach towards sustainability.
"All these are good in themselves but it is also the case that they can provide us with an advantage in the market place for food and drink. Increasingly consumers - not just in this country but across the world - are demanding higher quality food."

The food we buy

Mr Gove added that consumers want to know more about the meat they buy, the milk they drink, the provenance of their vegetables, the carbon cost of production, the weight of the footprint left on the planet by particular farming methods and the circumstances under which animals were reared during their lives.

"Not to mention the way in which their lives end," he said.

"The more specific the story we can tell about the care invested in the food we produce the more we actually reinforce our competitive edge Because if we make quality our hallmark we can secure farming's future.
"So when it comes to finding an edge in an ever more competitive world of food and drink, we need to recognise its in goods recognised for their exceptional quality and special distinctive provenance that will become market leaders."

The FDF says it is currently developing proposals as part of the Government's industrial strategy to boost specialist export support with an aim of delivering ambitious long-term export targets.





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