China, the biggest market for New Zealand's mutton exports, is witnessing a falling demand in the country. As a result, mutton prices slid by about 10% over the past two months, a situation further exacerbated by difficulties in the UK market.
Reflecting on the present predicament, Murray Brown, the general marketing manager for New Zealand's mutton exporter, Alliance Group, spoke of challenging trade conditions and other relevant developments, including China's culling of sheep which "start to put pressure on the market".
The most populous nation in the world took up about 30% of Kiwi lamb exports and 70% of mutton deliveries. According to Brown, it also has the largest sheep flock globally.
With the Chinese sheep population (at an estimated 130-150 million) bearing the brunt of high slaughters, international imports have been much affected, Brown added.
In the meantime, Alliance Group itself had seen higher slaughtering of sheep during drought periods. Sheep numbers have since been stabilising and gaining normalcy.
Currently, New Zealand's farmgate price for a 17.5kg lamb has declined 14%, from a year ago, to US$3.69/kg. In the same period, mutton prices have dropped 23%.
Elsewhere in Europe, the UK is hampered by an economic disadvantage of exporting mutton due to a weak euro, and despite an increased local output of 6%.