AUSTRALIAN meat processors and exporters are in Tehran this month hoping to revive old market loyalties in the wake of the United Nations recently lifting economic sanctions against Iran.
Although a dramatic drop in Australia’s sheep flock size to around 70 million has restricted the availability of sheepmeat exports to traditional markets, particularly the Middle East, industry officials say lamb and mutton sales to the region have some big prospects.
Beef exports to the Middle East are also generally flat, or down, because of supply shortages and price competition from major Australian rivals such as Brazil.
While low oil prices and a dip in infrastructure building activity are likely to make 2016 a slow performer, some key segments are buzzing and Australia's long-standing reputation in the region as a red meat supplier and provider of food handling technical help provide a strong foundation for growth.
Last week Australian export companies including sheepmeat leader Fletcher International, Victorian firms Scorpio Foods and InterAgri, and processors Manildra, Teys and JBS, were in Tehran for an inaugural bilateral forum of meat traders just a month after trade sanctions were officially lifted.
Although food sales to Iran were not blocked by the UN sanctions and Iran imported about 137,000 tonnes of red meat from various countries last year, an end to decades of US-led trade restrictions imposed against the nation's military and nuclear programs will free up capital and economic activity and stimulate food sales opportunities.
Australia's agricultural export ties to Iran were worth about $1 billion 20 years ago, but were down to $360 million last year, with red meat sales almost non-existent in some periods during the sanctions (although worth about $3.4m in 2014).
The Middle East buys 31 per cent of our mutton exports and 29pc of our lamb, and took almost all Australia's 2.1m live sheep exports in 2014-15.
Saudi Arabia alone is Australia's fourth biggest export mutton market and eighth largest beef buyer, taking 11pc of our mutton ahead of United Arab Emirates (7pc) and Oman (5pc).
Lamb orders to UAE (our third biggest lamb buyer, taking 8pc of total exports) grew 9pc to 19,000t last year and strong demand from the nation's ritzy hotels, restaurants and shopping precincts also boosted our beef exports 12pc to 10,000t.
Lamb sales to Jordan rose to 14,700t, mutton orders to Oman were up 18pc (to about 6800t), and exports to Qatar and Bahrain also lifted.
"The region has a diverse and growing market and we enjoy strong relationships and unique access as a trusted source of quality and consistent product," said Meat and Livestock Australia's Middle East regional manager, Dr David Beatty.
The Australian red meat industry's first trade office was established in the region almost 50 years ago.
Mr Beatty said while many of its oil-rich countries were traditional sheepmeat consumers, they were keen to diversify their economies, looking to western trends and business options, and to western red meat cuisine to satisfy changing local diets and a huge influx of visitors.
"In the UAE, Dubai alone has 78 million airline passenger transfers every year and in 2020 will host the World Expo where a lot of international visitor attention and business activity will be centred," Dr Beatty said.
Hotel construction across the Middle East was booming with more than a million rooms to be built by 2020, and a 50pc rise in hotel rooms in the past year.
While Australia's chilled and frozen meat exports had traditionally serviced commodity-based carcase buyers, consumers in Saudi Arabia, Qatar and UAE had progressive, high-end retail and food service expectations and represented valuable growth areas for the world's second biggest sheepmeat exporter.