10 Feb 2024

NZ beef and lamb exporters hope for New Year boost in China

7:12 am on 10 February 2024
Traditional Chinese lunar New Year dinner table, party invitation, menu background with pork, fried fish, chicken, rice balls, dumplings, fortune cookie, nian gao cake, noodles, chinese decorations

Exporters are hoping NZ beef and lamb will join fish at Chinese New Year feasts. Photo: 123rf

Companies are hopeful Chinese shoppers will buy New Zealand red meat this Chinese New Year.

Meat processor Alliance is busy pushing New Zealand lamb, beef and venison into China - just in time for Chinese New Year celebrations, which kick off when the new moon rises on 20 February.

But current trading conditions are fraught with challenges - China is working to clear large volumes of chilled meat inventories, while it also imported cheap meat from countries including Australia and Brazil.

Alliance group chief executive Willy Wiese said the Chinese economy was not in the best state - and sales over Chinese New Year would reflect where shoppers were really at.

"I'm cautiously looking at how the current economic turmoil ... in China plays out - so we're keeping a very close eye on that," Wiese said.

"I'm hoping we see significant clearance of that [New Zealand] inventory, and then potentially slow price appreciation on products into China. I don't think it's going to be quick, because there are a lot of other dynamics at play in the economy."

The speed at which China cleared through its chilled inventory would also indicate the ability for Chinese consumers to spend, Wiese said.

"Within the next couple of weeks, you'll see that clearance rate as they move into Chinese New Year - so it's all set, it's about a week away and we'll see how quickly they can clear that - and that will give us a good idea of their consumption patterns."

There was strong competition in-market while China had "significant challenges moving volume and price" of meat, especially lamb, Wiese said.

"In beef as well, they've granted access to a large number of South American beef plants to export product into China, which obviously keeps a margin squeeze on our trade with China at the moment," he said.

"I don't want to be too optimistic. Although you have the volume opportunity, the price is not necessarily there where we can maximise value back to our farmers."

He described the outlook for China as "stable to slightly positive [rather] than stable to slightly negative".

Christmas and the festive period were key indicators for its UK and European markets, as Chinese New Year was for China, Wiese said.

"We have seen really good clearance rates [in the UK] over Christmas. [And] we have seen a significant build up of inventory for Easter, which unfortunately, with the lower livestock flows within New Zealand, has not necessarily assisted us in making sure we could fully meet all our supply obligations - as our farmers are putting more weight on to maximise their returns."

He said the flow of livestock into its seven meat processing plants was 25 percent slower than projected - largely due to conditions being much better than expected and planned for during the El Niño weather pattern.

Wiese said this could result in waiting periods for suppliers at the meat works in the coming weeks.

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