October 17, 2013

 

New Zealand's meat export to China booms

 

 

China is now New Zealand's largest single market for sheep meat by volume and value but the country's meat companies are warned against becoming too reliant on the booming Chinese export market.

 

The warning was given by New Zealand's Meat Industry Association (MIA) chief executive Tim Ritchie.

 

He feared a repeat of New Zealand's dependence on meat exports to Iran in the 1980s.

 

Ritchie saw huge potential in the Indonesian market for meat exports and demand from this market could provide useful tension with China in the future.

 

The Indian market could also provide competition with China for New Zealand sheep meat exports as it developed.

 

Ritchie said there was no sign that export growth to China would level off.

 

According to MIA's just-released annual report, Chinese demand for sheep meat and beef had rocketed in the past 12 months. New Zealand's sheep meat exports to North Asia almost doubled over the past year from 77,913 tonnes worth US$392 million to 143,277 tonnes worth US$674 million. The growth was almost entirely due to the demand for meat in China, which grew 120% to 123,189 tonnes by June 2013. The value of these exports increased 124% from US$247 million to US$554 million.

 

The market was still predominantly a market for frozen cuts, with only US$349,000 of chilled cuts exported. The demand had been driven by their liking of stews that used thinly sliced meat that were less expensive cuts.

 

Beef exports to China increased from 4,541 tonnes to 33,319 tonnes, becoming New Zealand's second largest beef market by volume overall.

 

Ritchie said China was having problems in meeting the food demands of its rapidly expanding middle class.

 

China valued different parts of the sheep carcass compared to the West because of cuisine differences.

 

The export boom had resulted in a significant price increase for the lesser value cuts going into that market. Limited supply of these cuts meant Chinese consumers were also purchasing higher value cuts such as legs.

 

Ritchie believed over time, the chilled trade in China would develop too. Chinese demand had the potential to lift all of New Zealand's meat exports to other countries.

 

The growth has been accompanied by a number of access issues that had not been fully anticipated by the Government. Resources relating to access issues with China from within the Ministry of Primary Industries and other agencies required to deal with this growth in trade, has not kept pace.

 

The report said that for several years, the industry had voiced concerns to the ministry that its market access team lacked the capacity to deal with various issues "and was worryingly becoming increasingly reliant on a few highly experienced and able market access counsellors".

 

The MIA was pleased the ministry had committed to increasing resources in the marketplace, Ritchie said.