Meat export breakthrough

China to accept high-value chilled product, levelling field with Aussie

New Zealand exporters will soon be allowed to send high-value chilled meat to China — potentially opening up trade worth hundreds of millions of dollars — under a deal announced yesterday.

The agreement — signalled by John Key as Prime Minister early last year — will give exporters access to China for chilled meat from 10 New Zealand meat processors, initially on a six-month trial with a view to later expanding trade.

The deal will allow meat exporters to move into a more lucrative part of the value chain. It also goes some way towards levelling the playing field with Australia, which has been exporting chilled beef, on a limited basis, to China since 2015.

As it stands, New Zealand meat exported to China is frozen — much of it at the lower end of the value chain.

The trial marked “positive progress” for New Zealand’s plan to expand market access to China for a range of meat products, Primary Industries Minister Nathan Guy and Trade Minister Todd McClay said in a joint statement.

“This agreement has the potential to be worth hundreds of millions of dollars for our farmers, exporters and the wider economy,” McClay said.

The deal was among several signed by Prime Minister Bill English and Chinese Premier Li Keqiang for co-operation spanning trade, customs, travel and climate change.

English and Li also confirmed a start to official talks on an upgrade to the nine-yearold free-trade agreement between the two countries.

In terms of chilled beef exports, New Zealand is playing catchup with Australia.

Li, in last week’s visit to Australia, announced a deal that would allow more Aussie beef producers access to China.

Meat Industry Association chief executive Tim Ritchie said yesterday’s deal “goes towards levelling the playing field” with Australia.

“It’s positive in the sense that we now have a foot in the door.”

Ritchie said that, given the challenges involved in exporting chilled meat, such as shelf life and the need to maintain strict temperature controls, he did not expect exports to China to suddenly take off.

“It’s going to require a consistent and sensible approach.” In yesterday’s announcement, English said official talks to upgrade the existing

free trade agreement between the two nations would start on April 25 with a goal of building on the deal that has tripled two-way trade to $23 billion since it came into force in 2008. “This memorandum is an important step towards meeting our joint target of $30b of two-way [trade] with China by 2030,” English said. For sheep meat, industry insiders said the deal was seen as a positive — especially against the background of uncertainty surrounding the trade to Britain after that country’s vote last year to leave the European Union. China is New Zealand’s second-largest market for beef and sheep exports. New Zealand exported about $1b of frozen sheep and beef meat in the year to December 2016 — a trade that has grown fivefold since 2011. Invercargill-based Alliance Group — New Zealand’s biggest sheep meat exporter — said the deal was an important first step. ASB rural economist Nathan Penny said the deal would boost the joint venture between China’s Shanghai Maling and New Zealand’s biggest meat processor and exporter, Dunedin-based Silver Fern Farms. “This will obviously give Silver Fern Farms — who have now got connections into that market — a kick-start to develop that consumer base at the higher end,” Penny said. Shanghai Maling last year bought a half-interest in Silver Fern.