Food and Drink Federation reports rise of 8.3% on same period last year to £4.9bn but add weak pound pushed up costs and resulted in 19% increase in trade deficit
The growth in exports was welcomed by the Food and Drink Federation
UK food and drink exports rose to “record” levels in the first quarter, with whisky and salmon and whisky two of the top three exports by value, new figures show. Industry body the Food and Drink Federation (FDF) said there was a rise of 8.3 per cent on the same period a year ago to £4.9bn in value terms and the strongest first-quarter on record. However the weakness of the pound also pushed up costs for producers, resulting in a 19 per cent increase in the trade deficit – the amount the cost of imports exceeds the value of exports – to minus £6.2bn in Q1.
The FDF said: “The impact of weaker sterling on British exports is expected to be seen in Q3 2017 as companies negotiate new sales agreements with overseas buyers.”
Whisky was the top export product by value, rising 9.9 per cent in Q1 to £895.9m on a 3.5 per cent lift in volume. Salmon exports rose at the fastest pace in value terms in Q1, up 52.3 per cent to £186.7m on 13 per cent volume growth. Wine exports were the largest in volume growth terms in Q1, up 13.8 per cent and 16.9 per cent in value terms to £133.3m. The FDF said export growth was strongest to South Korea, Belgium and South Africa, up 40.3 per cent, 37.3 per cent and 31.2 per cent respectively.
Beer was the biggest export to South Korea, wheat and barley to Belgium and animal feed to South Africa.
The top export market in value terms in Q1 was Ireland, up 11.2 per cent to £854.3m, followed by France (+5.8 per cent to £513.1m); the United States (+13.8 per cent to £507.3m); Netherlands (+7.4 per cent to £331.8m); and Germany (+10.4 per cent to £325.7m). Spain was the only export market in the top 20 markets by value to record a drop in exports, down 21.6 per cent to £191.5m, though growth positive to the other 19 countries in the top 20. Exports to non-EU countries rose 9.4 per cent in Q1 and exports to the EU rose 7.4 per cent. Chocolate was the UK’s third largest export in value terms in Q1, up 6.4 per cent to £155.3 million on volume growth of 2.5 per cent. Cheese was fourth at £145.3m having risen 29.1 per cent in value terms and 3.2 per cent in volume. Beer exports were the fifth top UK food and drink export in value terms in Q1 at £139.3 million, a rise of 9.5 per cent though volume was down 1.6 per cent.
Making up the rest of the top 10 food and drink exports were wine (6), pork (7), gin (8), beef (9) and vegetables (10).
Pork exports rose 24 per cent in value terms to £109 million despite a 4.8 per cent drop in volume, and beef rose 3.1 per cent in value to £106.3 million despite a 14.4 per cent drop in volume.
Vegetable exports rose 1.9 per cent in value to £97.6 million despite a 19.4 per cent drop in volume.
Gin exports rose 17.5 per cent in value to £108.3 million on volume growth of seven per cent.
By sector alcoholic drinks are the UK’s largest food and drink export by value, up 9.9 per cent in Q1 to £1.46 billion, followed by ‘other grocery’, which rose 14.5 per cent to £1.04 billion in Q1.
Cereals and bakery were third top by sector at £560.5 million though down 15 per cent year on year and the only category in the sector top 10 to see a decline in value.
Ian Wright said the FDF wanted to work with the UK Government to take advantage of increased demand for UK products overseas
Commenting on the latest export figures, Ian Wright, director general of the FDF, said: “The growth of food and alcoholic drink exports we’ve seen in Q1 is very encouraging news for our industry.
“We want to work with Government to take advantage of increased demand for UK products overseas and the opportunities that leaving the EU is expected to create.
“We would encourage the new Government to look to Bord Bia (the Irish Food Board) as inspiration in creating an organisation to help turbocharge sales of UK food and drink globally.
“It is also very pleasing to see non-EU exports performing beyond expectations.
“As the UK leaves the EU growth in exports is hugely important to our sector.
“We hope that with the determination of businesses and the assistance of the new Government, we can open more channels and provide a further boost to the UK’s competitiveness on the world market.”