Conflict challenges Middle East sheepmeat market, but outlook remains bright
Damian Storie from Classic Fine Foods spoke about what the conflict in the Middle East meant in the short and long term. Picture by Catherine MillerThe ongoing Middle East conflict is causing considerable. . .
Damian Storie from Classic Fine Foods spoke about what the conflict in the Middle East meant in the short and long term. Picture by Catherine MillerThe ongoing Middle East conflict is causing considerable supply chain disruptions. Subscribe now for unlimited accessto all our agricultural newsacross the nationor signup to continue readingAll articles from our website& appThe digital version ofThis Week'sPaperOur entirenetworkBut Damian Storie, who heads up one of the region's leading premium food distributors, Classic Fine Foods, says the growing affluence of the 11. 2 million living in the Middle East will create big opportunities for Australian sheepmeat exports by 2030. Adding to this demand is the boom in the gulf states' hospitality sector since the pandemic. "Ten years ago it was the US, but Australia has got a huge foothold in both the Kingdom of Saudi Arabia and United Arab Emirates. "Speaking at LambEx26 in Adelaide last week, Mr Storie said figures such as the annual tourist arrivals in UAE being tipped to reach more than 30 million by 2030 - a 40pc increase on 2023 levels - all pointed to sustained volume growth. The hotel and restaurant capital expenditure in hospitality expansion across the gulf states is also huge at US$15 billion. Mr Storie - who has 40 years experience in the meat trade - acknowledges price is a consideration in every market, but says rather than engaging in a "race to the bottom", Australia should be focusing its negotiations on quality. Traceability, reliability and consistency are all valued by the high end Middle East market. But in order for Australian lamb exporters to position themselves well in supplying high end hotels and Michelin star restaurants in the area, they needed a farmgate-to-plate story. When people come into a hotel they want to know everything about where that lamb has come from, the breed, how it was reared and who the producers are. - DAMIAN STORIE"When people come into a hotel they want to know everything about where that lamb has come from, the breed, how it was reared and who the producers are," he said. Some red meat brands are already differentiating themselves by supplying QR codes for diners to obtain this information, Mr Storie said. He says in the past few years a number of their food service customers have sent staff to Australia to visit farms to understand the product better. Australian lamb has built a strong reputation, but Mr Storie says key to having repeat sales is consistency. "Grading matters more than you think," he said. "Most of the high end hotels and restaurants have European chefs who are discerning customers and understand Meat Standards Australia is because they have worked in Singapore or the US. "Mr Storie says it is essential that exporters correctly label product bound for the Middle East in Arabic before it leaves Australian shores. It must have all the correct accompanying paperwork, such as Halal and food safety certification, to avoid any delays. "Halal processing is not just certification, cold chain handling are scrutinised by religious groups and customer alike," he said. CURRENT SITUATIONWhile the past few months have not been logistically easy, Classic Fine Foods' Damian Storie is proud they have been able to fulfil nearly all of their orders. They have had to pass on some costs which has been a challenge. "In the first month of the conflict, the price of a container coming into the UAE, including insurance, was an additional $12,000, so going to market with product we were having to put through increases to the food service market of 20 to 30 per cent," he said. Prior to the conflict, he said it was taking 28 days to shift meat from Melbourne to the port of Jebel Ali in Dubai through the Strait of Hormuz. With the Strait closed, vessels were forced to go around the Cape of Good Hope in South Africa extended the journey to the Middle East to 42-50 days. The Suez Canal shipping route is again open, but Mr Storie says it is still congested. These longer shipping times have forced more frozen sheepmeat rather than higher-valued chilled product to be sent. Another concern for the Middle East is the economic slowdown, including a big drop in luxury hotel occupancy rates in the UAE and Saudi Arabia. Hotel chains, such as Accor and Marriott, that make up more than half of Classic's business are having just 20pc check-in rates, according to Mr Storie. "We are hoping by the fourth quarter there will be some green shoots in the market, but at this stage there are very few bookings," he said. As it happensBreaking news alertBe the first to know when news breaks.