NZ sheep meat prices soar on China demand

AUCKLAND: New Zealand sheep meat prices are being pushed up to record levels as Chinese buyers look to secure supply ahead of their New Year celebrations.

The most recent North Island slaughter price for mutton was a record $4.75 a kg, compared with a fiveyear average of $3.32/kg, while the South Island slaughter price lifted to a record $4.80/kg, from a fiveyear average of $3.06/kg, AgriHQ said.

North Island lamb advanced to $7.30/kg, from a fiveyear average of $6.21/kg, while South Island lamb advanced to $7.15/kg from a fiveyear average of $5.94/kg.

AgriHQ said lamb prices were tracking above $7/kg for the first time since November 2011.

Sheep meat is popular in China for use in traditional dishes, and traders are buying the meat now to ensure it makes it to China in time for New Year celebrations, which start midFebruary, and to cover demand for the ensuing holiday period.

Also known as the ‘‘Spring Festival’’, Chinese New Year falls on February 16 next year, and the festival will last until March 2.

‘‘China’s garnered the majority of lamb exporters’ attention lately due to their extremely positive demand for the Chinese New Year period,’’ AgriHQ analyst Reece Brick said in his Monthly Sheep & Beef report for November.

‘‘Large portions of both New Zealand’s and Australia’s production are being secured by Chinese buyers as the midDecember deadline for shipments gradually approaches.’’

AgriHQ noted that 33% of all New Zealand lamb exported in October was sent to China or Hong Kong, compared with a 24%29% share over the past three years.

A similar trend was seen in Australia, China and Hong Kong accounting for 22% of that country’s lamb exports, up from 13%19% over the previous three years.

‘‘China’s insatiable demand for sheep meat has inflated the mutton market even further than lamb prices,’’ Mr Brick said in a section of the report, titled ‘‘Mutton flying on a high’’.

‘‘The inability to secure enough lamb, mixed with the high pricetag on lamb cuts, has led to some Chinese buyers using mutton as a substitute, compounding what was already firm demand.’’

New Zealand and Australian exporters had reportedly diverted a larger portion of mutton into China to take advantage of the strong demand, Mr Brick said.

The lift in international demand had bolstered confidence in the sheep industry to among the highest levels in recent years, he said.

Lamb slaughter prices held very firm through October and all indications pointed towards values holding well above historic levels through until the new year, Mr Brick said.

However, he warned there were questions around how demand would fair beyond the Chinese New Year as other markets were ‘‘variable’’. Demand in the EU and US was firm, while the Middle East and the UK were weaker by comparison. — BusinessDesk