Norwegian beef market a top priority
Beef consumption in Norway is steadily declining
In 2021, Namibia exported its full quota to Norway and tapped into the Botswana quota as that country could only utilise 865 tonnes out of the allowable 1 600 tonnes.
The Norwegian market is important for Namibia and provides good export earnings, contributing to the stability of the livestock and meat industry.
In 2021, Namibia exported its full quota to Norway and tapped into the Botswana quota as that country could only utilise 865 tonnes out of the allowable 1 600 tonnes.
Namibia shares a 3 200 tonnes quota for the export of beef to Norway with Botswana, which is administered under two different quota schemes.
According to the Meat Board of Namibia, the generalised system of preferences (GSP) quota of 2 700 tonnes is allocated to importers from Namibia or Botswana on a first-come, first-served basis.
Meanwhile, the trade agreement between the Southern African Customs Union (SACU) and the European Free Trade Association (EFTA) quota of 500 tonnes is available through a Norwegian auction to Namibia and Botswana.
"In addition, the quotas are administered through firm-specific allocations within these two countries."
The Meat Board says that given the permanency risk of the GSP quota system, the SACU round of negotiations with EFTA should focus on securing the quota under the SACU/ EFTA regime on a first-come, first-served basis.
Botswana and Namibia were approved for export to Norway in 1995, and exporters have since had preferential and duty-free market access.
"Export of bovine meat from Botswana to Norway started in 1996, while Namibia had some problems in the beginning with salmonella and did not export continuously on an annual basis before 1998."
Moving towards a surplus
The Meat Board says that although the Norwegian population is growing, beef consumption per capita is steadily declining.
"On the other hand, domestic production is growing due to government incentives. This implies that by the year 2025, a balance between beef demand and supply may be reached, or possibly even a surplus in the market."
It says that this scenario will lead to an increase in pressure on the Norwegian government to reduce unilateral tariff-free import quotas under the GSP arrangement.
"Thus, the ongoing SACU round of negotiations is critical for the migration of the GSP quota to the SACU/EFTA arrangement. However, the SACU/EFTA quota is based on the Norwegian beef import auction system that adds additional costs to the export value chain."
The Meat Board says it is therefore imperative for Namibia to negotiate the shift to the SACU/EFTA quota to be accompanied by an exemption from this auction mechanism.
Namibian beef does well
It added that Namibian beef is well placed in Norway and commands high returns, and in comparison with Botswana, Namibia receives better prices.
According to the Meat Board, Namibia’s beef export value has continued to increase over the years, while Botswana’s revenues are on a steady decline due to production challenges and relatively lower price realisation from the Norwegian market.
Although average export prices increased marginally from N$189 per kg in 2020 to N$190.75 in 2021, the value of exports increased tremendously due to an improvement in export quantity.
On the other hand, the Meat Board points out that Botswana’s export prices increased marginally from N$100. per kg to N$101.40.
Additional opportunities
The Meat Board says that the quantitative restriction is the most significant challenge for Namibian beef exports to Norway.
"Given the unilateral nature of the GSP quota, the Norwegian government may at any time withdraw the GSP quota. It is important that efforts should be geared towards shifting a substantial quantity to the SACU/EFTA regime, which could assure permanency and stability of Namibian beef exports to Norway."
The Meat Board further stressed that the Norwegian market is important for both Namibia and Botswana’s meat industries, raking in N$520 million (2021) in export earnings.
"In terms of priorities, SACU would be better-off negotiating for a transfer of the GSP quota to the SACU/EFTA arrangement as a first priority to guarantee the quantity and thereafter negotiating for an increase in quota altogether."
The choice is yours
Secondly, it said that a shift to a first-come, first-serve basis will be more advantageous than the current auction system with respect to the SACU/EFTA arrangement as it will allow exporters to choose importers that can provide the highest prices.
"SACU, as a negotiating unit, should be able to advance a request for cumulating inputs between Namibia and Botswana so that Namibia can access the Norwegian market with meat derived from Botswana cattle and vice-versa."
The Meat Board says that this would strengthen value-chain integration in the region and reduce the risk of non-fulfilment of quotas.
It adds that a strong position should be taken on the dominance of prime cuts given Namibia’s limited supply of beef.
"Prime cuts serve to maximise the country’s returns and balance-off returns from other lower-paying markets where products such as offal are exported."
In 2021, Namibia exported its full quota to Norway and tapped into the Botswana quota as that country could only utilise 865 tonnes out of the allowable 1 600 tonnes.
Namibia shares a 3 200 tonnes quota for the export of beef to Norway with Botswana, which is administered under two different quota schemes.
According to the Meat Board of Namibia, the generalised system of preferences (GSP) quota of 2 700 tonnes is allocated to importers from Namibia or Botswana on a first-come, first-served basis.
Meanwhile, the trade agreement between the Southern African Customs Union (SACU) and the European Free Trade Association (EFTA) quota of 500 tonnes is available through a Norwegian auction to Namibia and Botswana.
"In addition, the quotas are administered through firm-specific allocations within these two countries."
The Meat Board says that given the permanency risk of the GSP quota system, the SACU round of negotiations with EFTA should focus on securing the quota under the SACU/ EFTA regime on a first-come, first-served basis.
Botswana and Namibia were approved for export to Norway in 1995, and exporters have since had preferential and duty-free market access.
"Export of bovine meat from Botswana to Norway started in 1996, while Namibia had some problems in the beginning with salmonella and did not export continuously on an annual basis before 1998."
Moving towards a surplus
The Meat Board says that although the Norwegian population is growing, beef consumption per capita is steadily declining.
"On the other hand, domestic production is growing due to government incentives. This implies that by the year 2025, a balance between beef demand and supply may be reached, or possibly even a surplus in the market."
It says that this scenario will lead to an increase in pressure on the Norwegian government to reduce unilateral tariff-free import quotas under the GSP arrangement.
"Thus, the ongoing SACU round of negotiations is critical for the migration of the GSP quota to the SACU/EFTA arrangement. However, the SACU/EFTA quota is based on the Norwegian beef import auction system that adds additional costs to the export value chain."
The Meat Board says it is therefore imperative for Namibia to negotiate the shift to the SACU/EFTA quota to be accompanied by an exemption from this auction mechanism.
Namibian beef does well
It added that Namibian beef is well placed in Norway and commands high returns, and in comparison with Botswana, Namibia receives better prices.
According to the Meat Board, Namibia’s beef export value has continued to increase over the years, while Botswana’s revenues are on a steady decline due to production challenges and relatively lower price realisation from the Norwegian market.
Although average export prices increased marginally from N$189 per kg in 2020 to N$190.75 in 2021, the value of exports increased tremendously due to an improvement in export quantity.
On the other hand, the Meat Board points out that Botswana’s export prices increased marginally from N$100. per kg to N$101.40.
Additional opportunities
The Meat Board says that the quantitative restriction is the most significant challenge for Namibian beef exports to Norway.
"Given the unilateral nature of the GSP quota, the Norwegian government may at any time withdraw the GSP quota. It is important that efforts should be geared towards shifting a substantial quantity to the SACU/EFTA regime, which could assure permanency and stability of Namibian beef exports to Norway."
The Meat Board further stressed that the Norwegian market is important for both Namibia and Botswana’s meat industries, raking in N$520 million (2021) in export earnings.
"In terms of priorities, SACU would be better-off negotiating for a transfer of the GSP quota to the SACU/EFTA arrangement as a first priority to guarantee the quantity and thereafter negotiating for an increase in quota altogether."
The choice is yours
Secondly, it said that a shift to a first-come, first-serve basis will be more advantageous than the current auction system with respect to the SACU/EFTA arrangement as it will allow exporters to choose importers that can provide the highest prices.
"SACU, as a negotiating unit, should be able to advance a request for cumulating inputs between Namibia and Botswana so that Namibia can access the Norwegian market with meat derived from Botswana cattle and vice-versa."
The Meat Board says that this would strengthen value-chain integration in the region and reduce the risk of non-fulfilment of quotas.
It adds that a strong position should be taken on the dominance of prime cuts given Namibia’s limited supply of beef.
"Prime cuts serve to maximise the country’s returns and balance-off returns from other lower-paying markets where products such as offal are exported."
Comments
Namibian Sun
No comments have been left on this article