FEARS among sheep producers of increased competition from imported

lamb are being played down, despite suggestions that New Zealand

suppliers are seeking greater access to European Community markets.

The Brussels-based European director of the NZ Meat Producers Board,

Mr Neil Taylor, and its UK marketing chief Mr John Mabb, have both been

quoted as claiming that the EC could comfortably absorb 15% more NZ

sheepmeat.

At present, an official voluntary restraint agreement limits the

volume to 205,000 tonnes annually -- about half of which comes to the

UK.

But there is speculation that board officials may try to persuade the

EC Commission to allow an increase in the quota tonnage when the

agreement comes up for renewal at the end of the year.

However, a spokeswoman in London said: ''Although demand for our

product is greater than we can meet under the quota, in practice we

expect the current trade agreement with the EC will be rolled over for

1994.''

The apparent inconsistency with the widely reported comments by Mr

Taylor and Mr Mabb is partly a reflection of conflicting political

pressures on the board.

On the one hand, it has to be seen as representing the interests of

New Zealand farmers -- while, at the same time, acting responsibly in

not pushing for unrealistic or potentially disruptive changes to the

balance of the EC sheepmeat market.

NZ Meat Board officials have been particularly anxious to avoid a

repeat of the controversy over lamb imports which soured relations with

Scottish producers in 1992. Yet they also need to consider their

relationships with the retailing and meat processing companies which use

NZ sheepmeat.

Although a rollover of the VRA would limit the NZ shippers to the same

total sheepmeat tonnage for all the EC markets next year, it might still

leave scope for extra lamb to enter the UK in competition with domestic

production.

A late start to New Zealand's 1992-93 lamb killing season meant that

an unusually large proportion of the sheepmeat arriving in this country

earlier this year was, in fact, mutton. Lighter grade lambs are still in

abnormally short supply in the London trade.

Importers suggest that if the next killing season -- due to begin at

the end of September -- has a more normal profile, then larger numbers

of NZ butchers' grade lambs could be available in the UK even within a

similar total sheepmeat quota.

However, currency changes could work to the advantage of British sheep

farmers. UK trade buyers have been complaining since early last year

about New Zealand shippers diverting supplies from this country to

Germany and other Continental outlets, where trade is priced in D-Marks.

The crisis in the European currency systems has effectively revalued

the D-Mark against the NZ dollar, increasing the incentive for New

Zealand shippers to continue these diversions.

Germany is already their second biggest EC market after the UK. New

Zealand is a relatively less significant supplier to the French and

other Mediterranean markets, which are the main focus of UK lamb export

activity.