Middle East and North Africa (MENA)

Red Meat Market Report Middle East and North Africa (MENA) Sheepmeat and beef 212 update Ben Larkin blarkin@mla.com.au +61 2 9463 9395

Overview Economic growth across the Middle East and North Africa (MENA) was strong in 212, and is tipped to remain positive throughout 213. High hydrocarbon prices in recent years have fuelled economic growth in many of Australia s red meat markets in the region. However, the region can be broken into two distinct economic groups, oil exporters and oil importers, with oil exporters set to fair better with high hydrocarbon prices. Australian red meat exports to the MENA region totalled 135,312 tonnes swt (shipped weight) in 212. This was a 23% increase on 211 shipments, and 32% above the five year average for Australian red meat exports to MENA. The MENA region, for the third year running, was Australia s largest destination for Australian lamb exports, with shipments totalling 55,76 tonnes swt in 212. Total global Australian lamb exports reached record levels in 212, with increased production also contributing to the growth in shipments to the region. Signifying the growing importance of MENA as a destination for Australian lamb, exports to the region accounted for 29% of all Australian lamb exports in 212, up from 22% in 211. Mutton exports rebounded in 212, after three years of decline. An increase in production in Australia and the corresponding reduction in prices contributed to the growth in Australian mutton exports to the MENA region in 212. Mutton exports totalled 47,348 tonnes swt, a 2% increase on 211 volumes. Beef volumes declined slightly in 212, after six straight years of growth. Beef shipments totalled 32,737 tonnes swt in 212, 5% down on 211. Although decreasing slightly in 212, beef shipments remained well above the five year average of 18,974 tonnes swt. Economic and financial conditions Economic growth is estimated to have reached 5.3% across the MENA region in 212, while growth of 3.6% is forecast by the International Monetary Fund (IMF) in 213. The 212 figure was well above the global average of 3.3%. Australia s largest red meat market in the region, the United Arab Emirates (UAE), registered economic growth of 4% in 212, while Saudi Arabia (6%) and Jordan (3%), Australia s second and third largest markets, respectively, also recorded strong expansion. Figure 1 Economic growth rates - Key export markets % change year-on-year 8 UAE Saudi Arabia Jordan Developed world average 6 4 2 21 211 212f 213f Source: International Monetary Fund Oil prices, a key determinant of wealth in the region, are forecast to remain high in 213, with Business Monitor International (BMI) forecasting oil prices to average US$12/bbl. Conflicts in Libya and Egypt appear to have past their peaks, with economic growth recovering in both nations throughout 212. However, civil war in Syria and continued instability within the entire region surrounding the Arab Spring present increased risks for further social tension and conflict. Conflict and uncertainty in the region will hamper trade, tourism and investment throughout 213, curtailing the potential for economic growth. MLA Market Information 2

Australian lamb exports Australian lamb exports totalled 55,76 tonnes swt in 212, a record for lamb shipments to MENA and 61% above the five year average for lamb exports to the market. Chilled lamb exports accounted for 59% of all Australian shipments. Growth in chilled shipments fuelled the overall spike in exports to MENA, with chilled lamb exports increasing 68% on 211 volumes. An increase in Australian lamb supply throughout 212, a reduction in lamb prices on the record highs seen in 211, and a slowdown in Australian live sheep exports to the MENA region contributed to the growth in Australian lamb exports. Figure 2 Australian lamb exports to MENA 6 5 4 3 2 1 ' tonnes swt Chilled Frozen Forecast 4' 5' 6' 7' 8' 9' 1' 11' 12' 13f f = forecast and MLA forecast Figure 3 Australian lamb exports to MENA Iran 13.2% Jordan 23.5% Qatar 1.8% Saudi Arabia 7.2% Bahrain 6.% UAE 24.% 15.3% The UAE was Australia s largest market for lamb in the MENA region in 212, with 13,25 tonnes swt shipped, followed by Jordan (12,959 tonnes swt) and Iran (7,271 tonnes swt). Exports to Bahrain totalled 3,326 tonnes swt in 212, well above the 28 tonnes swt shipped in 211. Exports to Iran almost tripled on 211 volumes to total 7,271 tonnes swt, while Jordan (47% year-on-year growth) and Qatar (7% year-on-year growth) also took significantly more Australian lamb. Libya rebounded in 212 as a destination for Australian lamb exports, after shipments reached a low of 14 tonnes swt in 211 as the country was gripped by civil war. Shipments reached 2,237 tonnes swt in 212, approaching the record for Australian lamb exports to Libya set in 28 of 3,47 tonnes swt. Exports of carcase lamb dominated the cuts mix shipped to the region. exports accounted for 6% of Australian shipments to MENA, with carcase exports more than doubling on 211 volumes. The majority of carcase exports (74%) were chilled airfreight. Lamb leg was also shipped in large quantities to the MENA region, accounting for 12% of overall lamb exports, followed by shoulder (1%) and forequarter (7%). Driving the growth in carcase exports were large increases in shipments to Qatar (2,722 tonnes in 211 to 5,32 tonnes swt in 212), Jordan (1,847 tonnes swt to 6,233 tonnes swt) and Iran (892 tonnes swt to 4,999 tonnes swt). Figure 4 Australian lamb exports to MENA by cut 27 27,1 tonnes swt 6.9% 211 35,643 tonnes swt 44.9% 212 55,76 tonnes swt 59.7% Leg 11.1% Shoulder 9.3% 6.9% Forequarter Rack 7.4% 4.3% Leg 12.7% Shoulder 13.1% Forequarter 15.% 1.3% Rack 4.% Leg 11.8% Shoulder 1.5% Rack 2.7% Foreq uarter 7.4% 8.% MLA Market Information 3

Figure 5 Australian mutton exports to MENA 6 5 4 3 2 1 ' tonnes swt Chilled Frozen Forecast 4' 5' 6' 7' 8' 9' 1' 11' 12' 13f f = forecast and MLA forecast Figure 6 Australian mutton exports to MENA Bahrain 13.3% UAE 23.5% Kuwait 12.2% Egypt 7.3% Saudi Arabia 26.7% 1.6% Figure 7 Australian mutton exports to MENA by cut 27 51,46 tonnes swt 57.1% Oman 6.4% Australian mutton exports The MENA region was Australia s largest export market for mutton in 212. After three years of decline, exports of mutton increased in 212, totalling 47,348 tonnes swt, up 19% on 211 volumes. This corresponded with a 23% increase in Australian mutton production in 212, and a decline in mutton prices from the record highs reached in 211. Saudi Arabia was Australia s largest export market in the MENA region in 212, with shipments reaching 12,646 tonnes swt. This was followed by the UAE (11,126 tonnes swt), Bahrain (6,318 tonnes swt) and Kuwait (5,758 tonnes swt). After a tumultuous year in 211, mutton exports to Egypt rebounded in 212, to 3,437 tonnes swt, up from a low of 528 tonnes in 211. Shipments to Libya also recovered somewhat after falling to 26 tonnes in 211, back up to 353 tonnes swt in 212. Cut composition was dominated by mutton carcase, accounting for 61% of all shipments, while leg (19%) and manufacturing (6%) were also exported in large quantities. 211 39,699 tonnes swt 57.5% 212 47,358 tonnes swt 6.6% Shoulder Leg 6.8% 22.% Manufacturing 7.6% Bone-in loin 1.7% 4.7% Leg 18.6% Manufact uring 1.5% Bone-in loin 2.7% 5.9% Shoulder 4.9% Leg 18.6% Bone-in loin 3.6% 6.7% Shoulder 4.1% Manufacturing 6.4% Oil- A key determinant of wealth Although economic growth throughout the MENA region was strong in 212, resource endowments and political stability vary significantly between countries. Oil is a key determinant of wealth, and economic prospects vary significantly from nations that are large oil exporters, and those nations that are net oil importers. Countries within the MENA region can be broken into two distinct economic groups, oil exporting nations and oil importing nations, as detailed in the International Monetary Fund s (IMF) November 212 Middle East and Central Asia Regional Economic Outlook. Average GDP per capita in oil exporting nations within the MENA region in 212 stood at US$24,41. This compares to an average of US$3,349 in oil importing nations, clearly indicating the wealth disparity within the region and the distinct difference in wealth between oil exporters and oil importers (IMF). MLA Market Information 4

Oil- A key determinant of wealth (continued) With recent high oil prices, those countries with oil have been able to post, in most cases, strong economic growth, even in times of economic uncertainty around the globe. With oil prices forecast to remain high in the short term, nations with high oil production should see continued high returns, bolstering of government revenues. Overall economic growth for MENA oil exporting nations is forecast at close to 4% by the IMF for 213. Conversely, high oil prices can have the opposite impact on oil importers. An increase in oil prices means higher prices paid for imports, damaging balance of payment figures in oil importing nations. High food prices also have a similar impact, forcing importers to pay higher amounts for imports. Importantly, as many oil importer governments within the region subsidies both fuel and food consumption, any increase in prices will serve to increase subsidy payments, therefore, damaging government balance sheets. Growth forecasts for MENA oil importers is 3% for 213 (IMF). Australia s top two red meat markets in 212, the UAE and Saudi Arabia, are both oil exporters, with large proven oil reserves. Jordan, Australia s third largest market, on the other hand, is classified as an oil importer. Oil exporters Fiscal breakeven oil prices Government expenditure has grown significantly in recent years in MENA oil exporters on the back of high oil prices as governments have increased wages, social expenditure and infrastructure investment. This has effectively created a situation in which the oil price that governments need to ensure that their budgets are not in deficit, the oil break-even price, has increased. If oil prices where to decrease below this oil break-even price for a significant period of time, this would place strain on government budgets, most likely resulting in reduced expenditure. This would consequently have a negative effect on economic growth, as government injections into the economy slowed. Therefore, it is important to know this oil break-even price for Australia s large red meat markets in the region. If the price of oil is above this break-even price, then it can be assumed that governments are not under significant budgetary pressure, and have the ability to inject stimulus into their economies to drive economic growth. Table 1 Fiscal breakeven oil price ($US per barrel) Fiscal Breakeven oil prices ($US per barrel) Projections 27 28 29 21 211 212 213 Algeria - 73.3 74.8 82. 14.7 117.9 99.5 Bahrain 65.5 79.7 82.5 12.7 113.9 118.2 111.4 Iran 81. 65. 76. 17. 134. 15. Iraq - 111.4 72.3 9. 95. 112. 94.1 Kuwait - 33. 28. 45.9 44.4 49. 56.4 Libya - 46.6 68.2 57.7 183.5 88.5 98.8 Oman 42.1 61.7 61.1 66.6 77.9 81.3 83.3 Qatar - 24.2 25. 24. 38. 4.4 68. Saudi Arabia - 37.6 73.6 67.5 77. 74.4 85.2 UAE - 23.4 61. 86.5 92.4 79. 77.5 Yemen - - 138. 13. 195. 237. - Source: IMF MLA Market Information 5

Figure 8 Australian beef exports to MENA 4 3 ' tonnes swt Chilled Frozen Forecast Australian beef and veal exports Australian beef exports to MENA declined 5% year-on-year in 212, to total 32,737 tonnes swt. Although declining, beef exports were still well above the five year average of 18,974 tonnes swt. The UAE was Australia s largest beef market in the region in 212, with shipments totalling 7,64 tonnes swt. key markets in the region include Jordan (6,12 tonnes swt), Saudi Arabia (5,241 tonnes swt) and Iran (3,421 tonnes swt). Egypt and Iran both experienced strong growth in 212, after a tumultuous year in 211, with beef shipments increasing 96% and 9%, respectively. Conversely, exports to Kuwait and Lebanon declined year-on-year in 212, after a strong year in 211. Shipments to Kuwait declined 38%, totalling 2,263 tonnes, while exports to Lebanon were down 65%, to 83 tonnes swt. Chilled beef exports avoided the overall decline in beef shipments, remaining steady on 211 levels at 9,178 tonnes. This reflects the strength of the retail and high-end foodservice sector for Australian chilled primal cuts. Frozen exports experienced the decline, back 6%, with manufacturing shipments declining 32%, to 8,275 tonnes swt, while topside/inside exports were down 7%, to 5,899 tonnes swt. 2 1 4' 5' 6' 7' 8' 9' 1' 11' 12' 13f f = forecast and MLA forecast Figure 9 Australian beef exports to MENA ' tonnes swt 4 grassfed grainfed 35 3 25 2 15 1 5 4' 5' 6' 7' 8' 9' 1' 11' 12' The cut composition to Australia s largest market, the UAE, was dominated by exports of manufacturing beef (23%) and topside/inside (23%). Importantly, exports of Australian loin cuts remained robust. Tenderloin exports increased 7% to 58 tonnes swt, cube roll/rib eye roll shipments increased 12% to 388 tonnes swt, while striploin exports were down slightly, back 1% to 67 tonnes swt. Grainfed exports increased 4%, to total 5,299 tonnes swt. Topside/inside was the dominant grainfed cut exported, at 1913 tonnes swt, followed by thick flank/ knuckle (1,2 tonnes). Both these cuts are used chilled at retail, while are exported frozen for further processing into burgers. Manufacturing grainfed exports increased eight-fold, totalling 859 tonnes, with the majority of these trimmings being used in the manufacturing of burgers. In particular, demand for Angus burgers has led to an increase in the demand for Angus beef trimmings. Figure 1 Australian beef exports to MENA by cut 27 2.% Thick Flank/Knuckle 4.8% Silverside/Outside 7.% 4,458 tonnes swt Topside/Inside 9.1% Manufacturing 24.5% Topside/Inside 18.5% 211 34,31 tonnes swt Manufacturing 35.5% Top sid e/insid e 18.% 212 32,737 tonnes swt Manufacturing 25.3% Striploin 11.% 41.6% 11.9% Striploin 3.5% Silverside/Outside Thick Flank/Knuckle 3.9% 8.% MLA Market Information 6 18.7% 17.5% Thick Flank/Knuckle 7.9% Striploin 3.5% Silverside/Outside 4.1% 23.7%

Competitor update Import statistics covering the MENA region are sparse, so it is beneficial to look at the export statistics of Australia s largest sheepmeat and beef competitors to ascertain the competitive environment Australia faces in the region. Sheepmeat New Zealand New Zealand (NZ) exported 4,8 tonnes of lamb to the MENA region in 212, a 49% increase year-on-year (Global Trade Atlas). NZ s major market for lamb, the EU, continued to suffer from economic hardship throughout 212, with NZ lamb exports consequently redirected into alternate markets, particularly the Middle East. Although increasing substantially, this growth was roughly in line with Australia s growth in exports to MENA in 212 of 55%. Interestingly, NZ supplies a slightly different market segment in the region. NZ s largest market in MENA was Saudi Arabia in 212, with shipments totalling 18,263 tonnes, followed by Jordan (12,468 tonnes). Although Jordan is a large market for Australian lamb exports (12,959 tonnes swt), Australian exports to Saudi Arabia only totalled 3,974 tonnes. NZ s dominance in Saudi Arabia can be attributed in some part to their use of gas flushing when packing product. Gas flushed product has an expiry of 9 days after slaughter in Saudi Arabia, as compared to 7 days for vacuum packed chilled product (Australia s dominant packing method). This allows NZ to seafreight product to the market with a reasonable shelf life on arrival, giving them an advantage in the market. NZ lamb exports to Australia s largest market, the UAE (13,25 tonnes swt in 212), only totalled 1,432 tonnes in 212. Although Australia and NZ lamb exports compete very evenly in Jordan, it appears that in each other s top market in the region, market share is dominated by the incumbent. NZ lamb exports to Jordan increased substantially in 212, up almost two-fold yearon-year. NZ product destined for Jordan in some cases is gas flushed, which is preferred by some Jordanian importers. India Indian lamb exports grew 2% in 212, totalling 1,348 tonnes swt. Mutton exports pose greater competition to Australian product, with Indian mutton shipments totalling 1,593 tonnes in 212, growth of 15% year-on-year (GTA). Although these are the offical figures, there seems to be large amounts of Indian product in the market. Live sheep Australian live sheep exports, which are almost exclusively destined for the Middle East, have been restricted in recent years by a declining national flock and market access restrictions into major markets. Australian live sheep exports were the lowest on record in 212, totalling 2.279 million head. MLA Market Information 7

Table 2 Lamb competitor update Table 3 Mutton competitor update Lamb Mutton 212 tonnage 211 tonnage Net tonnage change % change 212 tonnage 211 tonnage Net tonnage change % change Australia 55,76 35,643 19,433 55% NZ 4,8 27,44 13,396 49% EU 825 1,268-443 -35% India 1,348 1,128 22 2% TOTAL 98,49 65,443 32,66-33% Source: Department of Agriculture, Fisheries and Forestry Australia 47,348 39,699 7,649 19% India 1,593 9,172 1,421 15% NZ 3,916 7,29-3,113-44% EU 1,616 1,227 389 32% China 481 1,396-915 -66% TOTAL 63,473 57,127 6,346-1% Source: Department of Agriculture, Fisheries and Forestry Beef India Table 4 Beef competitor update India was the largest supplier of beef to the region, with shipments totalling 431,69 tonnes in 212, an increase of 9% year-on-year. Indian beef (buffalo) meat is a low cost product and is largely destined for the frozen manufacturing sector. As Indian packaging and processing standards improve, an increasing amount of Indian chilled product is reaching the market, although this is still competing in the lower end retail and foodservice sectors. Brazil Brazil was the second largest supplier of beef into the region, with exports totalling 331,313 tonnes in 212, a slight increase on 211 shipments. Brazilian beef largely competes with Australian beef at both the frozen manufacturing level and into the mid-level retail and foodservice markets. Importantly, market access restrictions were placed on Brazil in numerous countries across the region after the discovery of an atypical case of BSE in late 212. Saudi Arabia Beef banned all Brazilian beef imports, with opportunities opening up in 213 for Australian beef to supply some of the gap left in the market. 212 tonnage 211 tonnage Net tonnage change % change India 431,89 396,444 34,645 9% Brazil 331,313 327,238 4,75 - EU 62,849 145,646-82,797-57% US 43,881 58,584-14,73-25% Australia 32,737 34,31-1,573-5% Argentina 22,83 29,854-7,24-24% Uruguay 24,32 15,897 8,45 53% NZ 8,738 9,242-54 - China 4,791 1,15-5,314-53% Paraguay 9,835 1,158-323 -3% Canada 1,682 2,732-1,5-38% TOTAL 974,47 1,4,21-66,163 7% Source: Department of Agriculture, Fisheries and Forestry US US beef competes with Australian beef in the higher market segments, particularly into high end foodservice and to a lesser extent, chilled retail. US beef exports fell 25% in 212, as a reduction in US beef production affected the volumes exported to the region, with a ban on US beef imports in Saudi Arabia in mid-212 due to the discovery of BSE also contributing to the decline in volumes. MLA Market Information 8

Beef into Saudi Arabia 213 a strong year? Australian beef exports to the Middle East (excluding North Africa) hit their highest ever monthly total in February 213, totalling 5,463 tonnes swt. A surge in shipments to Saudi Arabia contributed to the record volumes, with Saudi Arabia alone taking 2,512 tonnes swt. A ban on Brazilian beef in Saudi Arabia in late 212 has created a gap in the market, with this contributing to the increased volumes sent in early 213. With such a strong start to 213 into Saudi Arabia, a background on the country seems appropriate, to provide insight into further opportunities for Australian red meat into the Kingdom. Nature of Australian exports Saudi Arabia was historically Australia s largest red meat market in the MENA region, before the UAE claimed the title in 29. Historically a large market for Australian mutton, volumes to the country slowed with the reduction in Australian mutton production from 21 onwards. Red meat shipments totalled 21,861 tonnes swt in 212, 1% above 211 exports. Exports to the country peaked in 26, at 28,83 tonnes swt. Although beef exports were down 13% in 212 on 211 levels, at 5,241 tonnes swt, this was 55% above the five year average. Beef accounted for 24% of Australian red meat shipments to Saudi Arabia in 212, with lamb exports making up 18% and mutton exports 58%. Beef exports to Saudi Arabia were dominated by shipments of frozen product, with 96% of all exports frozen in 212. Manufacturing exports make up the majority of shipments, accounting for 56% of all exports, followed by carcase (2%) and topside/inside (6%). The market for chilled product in Saudi Arabia is rather small, at 24 tonnes swt in 212. Importantly, in 213 (Jan-Feb) there has been phenomenal growth in Australian chilled shipments to Saudi Arabia, with chilled shipments for the first two months of 213 up more than four-fold on total 212 exports, reaching 873 tonnes swt for January and February alone. The first two months of 213 has seen total beef exports increase more than eight-fold when compared year-on-year. Market access requirements Quotas and Tariffs There are no quotas for Saudi Arabia. There is no tariff on chilled product, 5% tariff on frozen product, offal and processed meat. Shelf life The shelf life for vacuum packed meat is no more than 7 days from the date of slaughter, while for vacuum packed offal it is no more than 51 days. Frozen meat (all types) has an expiry date of no more than 12 months after slaughter. Gas Flushed lamb has an expiry date of no more than 9 days after slaughter. Entry date requirements apply for the market. They are: Vacuum packed meat (all), the product must enter no more than 4 days after slaughter date. Frozen meat, product must enter no more than 4 months from the date of slaughter. Frozen offal (6 months), brain and testes (4 months) and liver (9 months). Halal requirements Halal slaughter is required for product destined for Saudi Arabia. GMO Free All meat products to Saudi Arabia must be from free GMO and genetically modified feedstuffs. The eligibility is determined on the National Vendor Declaration (NVD). MLA Market Information 9

Beef into Saudi Arabia 213 a strong year? (continued) Saudi Arabia s food consumption on the up The latest Business Monitor International (BMI) report on food and drink in Saudi Arabia paints a positive outlook for growth in food consumption in the country. Strong economic growth within Saudi Arabia, forecast at 4.5% in 213, driven by high oil prices and continued high government spending, is forecast to drive household expenditure and subsequently food consumption upwards. Food consumption growth is forecast at 9.75% in 213, while out to 217 growth is forecast at 53.3%. The report places Saudi Arabia at the top of BMI s risk/rewards ratings for the MENA region, indicating the good opportunity for investment in the food sector and for growth in food consumption. Although consumers in Saudi Arabia do not spend as much per capita as those in the UAE, Australia s largest market for red meat in the MENA region in 212, it offers better opportunities for long term growth, particularly food consumption, according to the BMI report. A large population of 28 million, the biggest in the Gulf Cooperation Council (GCC), provides a large consumer base. Importantly, the population is not only large, but also young, with roughly half the population younger than 25. Combined with good prospects for economic growth in the coming years, the potential exists for Saudi Arabia to act as a growing market for Australian red meat. Economic Outlook The IMF has estimated growth of 6% in 212 and is forecasting growth of 4.2% in 213. High levels of government spending, particularly since the beginning of 211, and continued expansion of the private sector are driving the strong economic growth. High oil revenues have allowed the government to increase expenditure while still keeping the budget in surplus and maintaining levels of foreign reserves. In 211, the government embarked on numerous new social programs, in an attempt to boost growth and ensure that social dissent around the MENA region did not spread to Saudi Arabia. A host of programs to deal with youth unemployment headlines these social initiatives. Combined with large scale education and healthcare programs, government spending has contributed significantly to the domestic economy in recent years. It is forecast by BMI that government expenditure will contribute 2.1% and 1% to GDP in 212 and 213, respectively, illustrating the importance of strong government expenditure to the economy. Political Risk The political situation in Saudi Arabia remains stable, however, social tensions do exists. The Kingdom of Saudi Arabia is a traditional monarchy, with the current King, King Abdullah, succeeding to the thrown on 1 August 25, following the death of his brother (Australian Department of Foreign Affairs and Trade, DFAT). The current ruling family, the House of Saud, will face internal complications as the current first generation heirs to the thrown suffer from ill health or pass away, however, there is little threat to the families grip on power. The regime has talked about political change following the Arab awakening, however, political parties remain illegal (DFAT). With the onset of the Arab Spring in 211, Saudi Arabia drastically increased government spending, in what was seen by many as an attempt to shore up political stability through increasing the wealth of the population. These subsidy packages totalled US$13bn, comprised of wage hikes for civil servants, housing and unemployment benefits and infrastructure spending (BMI). MLA Market Information 1

Figure 11 Australian beef exports to Saudi Arabia ' tonnes swt 7 Chilled Frozen 6 5 4 3 2 1 4' 5' 6' 7' 8' 9' 1' 11' 12' 13 ' note: 213 includes only January and February figures Figure 12 Australian beef exports to Saudi Arabia (Jan-Feb) ' tonnes swt 4 Chilled Frozen 3 2 1 4' 5' 6' 7' 8' 9' 1' 11' 12' 13 ' Beef into Saudi Arabia 213 a strong year? (continued) Saudi Arabia has been ranked by Freedom House, along with Equatorial Guinea and North Korea, as one of the world s least free nations. Although relations between the ruling Monarchy and its people appears strained, risk of political upheaval appears remote. Summary Record beef exports to Saudi Arabia in January and February 213 indicate that Saudi Arabia is a growing destination for Australian beef exports. The ban on Brazilian beef put in place in late 212 has opened opportunities for Australian beef and contributed to the strong start to 213. However, such an opening should provide strong links with the Saudi trade that can be capitalised in the future, even as market access restrictions on Brazil are eased. Regional forecasts Population growth continues at a fast pace across the MENA region. Among Gulf Cooperation Council (GCC) countries, population growth from 212 to 215 is forecast by the IMF at 7%, with the total population reaching over 47 million people in 215. Outside of the GCC, population growth in large Australian red meat markets is also predicted to be positive. Egypt (6% growth), Iran (4%) and Jordan (7%) are all forecast to see strong population growth out to 215. Egypt, behind Pakistan (187 million people) and Nigeria (155 million people) is the third largest country in the MENA region, with a population of 8 million people. As a significant meat importer, the large and growing population in Egypt should signify the potential of the Egyptian market for Australian red meat exports. Political upheaval and difficult technical standards have meant that Australian shipments have been restricted in recent years, however, potential still exists. Beef consumption in MENA is forecast to expand by 314, tonnes cwt (29, tonnes boneless) between 21 and 215 (see MLA paper Forecast growth in Australian beef exports by major market 21-215, P.Barnard and P.Weeks, January 211). MLA forecasts that Australian beef and veal exports to the Middle East (excluding North Africa) will total 35, tonnes swt in 213, an increase of 12% year-on-year (MLA beef industry projections 213). Despite the growth in Indian beef exports to the region, strong indications of continued demand from Australia s large markets looks set to drive the growth in Australian beef shipments. Lamb exports to the Middle East (excluding North Africa) are forecast by MLA to grow 6% in 213, to 55, tonnes swt (MLA sheep industry projections 213). MLA Market Information 11

Free to MLA members For further information please call toll free 18 23 1 or 2 9463 9163 or fax 2 9954 752 Also available on www.mla.com.au Meat & Livestock Australia, 213. ABN 39 81 678 364. MLA makes no representations as to the accuracy of any information or advice contained in Red Meat Market Report and excludes all liability, whether in contract, tort (including negligence or breach of statutory duty) or otherwise as a result of reliance by any person on such information or advice. MLA Market Information 12