NZ Meat Board confident of fundamental change in world sheepmeat New Zealand expects prices to strengthen Cheaper imported lamb at first seemed one likely consequence of international trade disruption due to the terrorism crisis. But New Zealand industry analysts looking at the UK and their other major markets around the globe reckon prices will strengthen in the medium term. Exchange rate movements since the catastrophes in the US appear to favour British buyers, the New Zealand dollar in particular having fallen sharply against sterling. However currency traders in Wellington were reported on Monday predicting the rate would rebound from NZ$3.60 to its pre-crisis NZ$3.30 quickly and perhaps move towards NZ$3.20 within a couple of months. More importantly, first reaction from the New Zealand Meat Board as the scale of the disaster became clear was to emphasise the potential significance of broader economic shifts rather than currency volatility. "They are a bit worried about prices slipping if all this causes a worldwide recession, hitting demand everywhere," The Grocer was told by one source close to the Board leadership. This focus on aggregate demand, with little interest in currency rate windfalls or opportunistic trading, is attributable to the Board's confidence a fundamental change is under way in the world sheepmeat sector. A few weeks ago chief executive Neil Taylor released a report by Meat Board forecasters predicting a sharp drop in output from the major producing nations including New Zealand over the next five years. With global tradeable production falling about 150,000 tonnes while product development innovations stimulated demand, the implication was a probably price uptrend. "Over the past decade, lamb has largely avoided the drop in prices experienced by beef, pork and chicken," commented Taylor when publishing the report (though he was not referring to the UK market specifically). Sentiment evident in the crisis so far indicates the New Zealanders believe their supply projection remains valid, so lamb will be effectively repositioned as a higher value meat in the major markets, though recession might restrain the price adjustment to relative scarcity in the short term. {{MEAT }}

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