Dubai: British companies in attendance at Gulfood are expecting a bumper year, with a weak pound driving food exports to the region.
“We’ve seen a big increase in exports,” said Jean-Pierre Garnier, Head of Exports for the Agriculture and Horticulture Development Board (AHDB), adding “the key difference of course being the value of the sterling which is now 20 per cent cheaper.”
The sterling is currently hovering around the $1.24 mark, having slipped from a high of $1.49 just prior to the UK’s decision to leave the European Union (EU) on June 23, 2016.
UK exporters currently have a strong hand over competitors, as a weak currency ensures a cheaper price of goods for foreign markets, compared to those products priced in stronger currencies.
“For meat and dairy producers, in particular, exporting to the Gulf have a big advantage.”
Premium lamb, traditionally one of the most expensive meats, from Britain is currently very popular in the region, Garnier added.
Multinational British firm nasco, a wholesale supplier of domestic brands such as John West tuna, Weetabix, and Ribena, says it’s expecting its best show in its five-year participation, with the benefits of a cheaper pound already filtering through.
“Our business in January has already shown a 30-40 per cent pick up on last year,” said Ashish Vidani, Director, nasco.
“The lower value of the pound is encouraging people to look to buy British, and buy more. This could well be our best show yet.”
Nasco’s bullish outlook is echoed by Birmingham’s Food State International, which is representing an expanded product and brands range, including its new London Flavours crisps and snack range. “The new sterling value is definitely helping,” said Lisa Burrows, Project & Marketing Manager. “Our business in this region is growing, it has been really successful for us. The value of the pound is helping, but it’s not the only consideration, it’s a dynamic market which constantly demands new product.”
A poll from February 7 by Reuters suggested that the pound would drop when Britain commenced exit negotiations with the EU at the end of March, 2017.
That fall in value would be steep if talks turned fractious, according to the 60 foreign exchange strategists who were polled.
Lancashire’s Yearly Food Sales, which represents a range of British brands and is using the show for the regional launch of its Crescent Halal Pies and Pasties, says the pound’s reduced value against the dollar is sparking increased interest in UK products. “The interest is there, it’s up to us to take advantage of it and turn it into business,” said David Caine, Export Manager.
But the Brits are not pinning all their hopes on exchange rate fluctuations and say the Middle East market is changing with increasing demand for Halal ranges and more health-related products.
“We are now looking at bringing more health-related products into the market,” said David Caine. “It’s a market you can’t afford to stand still in but which is still performing well for us, particularly with demand from Bahrain, Saudi Arabia and the UAE.”
Ashish Vidani said product range expansion is key to fend off rising international competition for Middle East business. “It’s highly dynamic. We have favourable exchange rate conditions at the moment and we have to leverage these, along with new product introductions, to keep and build on our market share.”