Exclusive Clive Beddall Sterling's strength against the euro has hit UK food and drink exports for the second successive year. But although the value of overseas sales fell 5% to £8.8bn during the past 12 months, Food from Britain says the figures are better than predicted as some key markets start to recover. The strong pound, increased retail competition, a worldwide overcapacity in food and drink manufacturing and limited exports of beef have all contributed to the gloomy figures. But even as FFB pointed to a recovery of exports to Asia, UK business leaders warned that British manufacturing was showing the first signs of slipping into recession after the value of the euro hit a record low. The resulting boost to the pound will make life even harder for exporters. Shipments to EU nations ­ 63% of all our food and drink exports ­ were the worst affected, showing a 6% decline in 1999. However, in contrast, the non EU market ­ severely affected by the Asian crisis in 1998 that saw a decline in sales of 14% ­ has fared much better, shipments dropping only 3% last year. Exports to the Far East rose 14% and sales to the US increased 10%. Consistent increases have been recorded for the last six months outside the EU overall. The last quarter was particularly impressive, with sales up 9%. FFB chief executive David McNair said: "1999 was a mixed year. But the last quarter recovery in many markets gives hope for further improvement during the next 12 months." UK exporters have maintained share in many countries, ensuring that when the market improves they are well placed to take maximum advantage. Ireland, with an increase in sales of 8%, has now overtaken France (down 6%) as the UK's number one export market. {{NEWS }}