China’s sheepmeat imports have slumped in 2022 after a decade of strong growth. The impact of this fall in demand is directly felt by Australia and New Zealand, who supply 90% of sheep imported by China between them.

As Figure 1 shows, New Zealand exports to China had been on a steep upward path over the past five years. In the year ended 30 September 2018, China was New Zealand’s second most important export market for sheepmeat behind the EU and UK. However, by the year ending 30 September 2021, such was the growth in demand from China that New Zealand exports were 155,617t, more than twice the 71,285t exported to the EU and UK.

This has changed dramatically for the year ending September 2022. New Zealand sheepmeat exports to China have slumped by over 40,000t.

With an extra 11% of lambs processed in New Zealand, it is no surprise that the EU and UK markets came back into focus with exports to there reversing the trend of recent years and increasing to 86,310t, an increase of more than 15,000t on the year ending September 2021.

Australia small player in EU market

Australia’s exports to China are also down this year but by much less than New Zealand. This is because Australia has had factories suspended in recent years, as well as a loss of production caused by flock rebuilding after drought.

Their exports to China (Figure 2) peaked in 2019 at 152,683t and have been on a downward trend since.

It is also striking how low Australian exports to the UK and EU are compared with New Zealand. This is because it has a tariff-free quota of just 19,186t compared with New Zealand’s 228,000t quota for the EU and UK combined. The Australian quota has been apportioned 13,335t for the UK and 5,851t for the EU 27.

This means more Australian lamb is appearing on the UK market than had been the case prior to Brexit and is reflected in the higher export figures in the 2022 year to date, reversing the downward trend of recent years.

Taste of what is to come

Worryingly for Irish sheep producers, this is a taste of what is to come from Australian lamb in the UK market.

Prior to Brexit, there was a 19,186 quota for the EU 28 members. The UK has now 13,335 of that and that is before the Australia–UK trade deal comes into effect.

There is a further twist to the post-Brexit trading arrangements for the UK and EU

When it does, Australia will have immediate access for an additional 25,000t of sheepmeat which will rise to 75,000t over 10 years.

After 15 years, it will increase further to 125,000t subject to a safeguard clause but after 15 years, there will be no limit on the amount of sheepmeat (or beef) Australia can export to the UK.

There is a further twist to the post-Brexit trading arrangements for the UK and EU.

While the UK has agreed to unlimited imports from Australia and New Zealand after a period of time, they will also continue to enjoy unlimited access to EU markets for UK sheepmeat.

The UK is the third largest sheepmeat exporter in the world after Australia and New Zealand. To the end of September 2022, it exported 49,836t, of which 48,740t was to EU 27 markets.

What this means for Irish sheep farmers

The EU is a net importer of sheepmeat and this has traditionally been met by New Zealand. However, with the growth in demand from China, there was less sheepmeat available for export to Europe and this has underpinned the increase in value over the past couple of years.

With the re-emergence of New Zealand and to a lesser extent Australia this year, the EU and UK markets have additional supplies available which squeezes the demand for Irish exports.


The arrival of Australian sheepmeat in the UK market in increased volumes because of the Brexit quota allocation, is also a foretaste of what is likely to come when the UK doors open fully to Australian imports. Not only do Irish sheepmeat exports face additional competition in the UK, there will also be more UK sheepmeat in EU markets as Australian volumes into the UK increase.