Exchange rate causes fall in export value

The value of UK food and non alcoholic drink exports has dropped £6 billion in the first six months of the year, according to the Food and Drink Federation (FDF).

The figures show that the value of exports to the EU shrank by 7.5% in the first half of the year. The rise of pound sterling against the sharply depreciated euro has made UK exports less competitive in key eurozone markets.

Exports to non EU markets have continued to grow and value added goods have increased globally, with significant rises of exports of tomato ketchup, bread, pastry and cakes.

Dairy exports saw losses of £157 million on record highs in the same period last year, however exports remain above pre 2014 levels and exported volumes are up for both processed and unprocessed milk and cream. Fish and seafood exports also lost £137 million in value, largely as a result of a sharp fall in salmon exports.

Steve Barnes, economic and commercial services director at FDF, explains, “Food and drink has been bucking the trend when it comes to exports for years and the value of the sectors exports is still declining less than UK exports overall. However, we are starting to see the negative effect of exchange rates, particularly in eurozone which remains the key destination for UK food and non alcoholic drink exports.”