Skyrocketing velvet sales to China at the end of last year have pushed New Zealand velvet exports up more than $28 million on the previous year.
Deer velvet exports to China increased by about $20m in December 2023 as importers and exporters worked to deal with the changes to China’s import regulations for frozen velvet.
Statistics NZ’s latest data shows the FOB value of deer velvet exported to all markets rose from $96m in the year ending December 2022 to $124m in December 2023.
On those figures Deer Industry NZ manager markets Rhys Griffiths reported “$28m more overall than the previous year”.
Most of this can be attributed to velvet exports to China in December 2023, a month when exports tripled, with $20m more velvet exported to China than the previous year.
Griffiths said he expects this is a signal of the “pull coming from China and the assertive buying of importers trying to conclude deals ahead of the April 30 deadline for this season’s velvet production to be cleared into China”.
Exporters have reported many Korean buyers have been holding out this season.
This is confirmed in the statistics, which show velvet exports to the Republic of Korea halved in December to $1m FOB.
Meanwhile planning for every scenario for frozen velvet access to China continues with DINZ and Ministry for Primary Industries (MPI) officials still working with their Chinese counterparts to agree clear guidelines for importing frozen NZ deer velvet into China.
In November last year, Chinese officials notified the MPI of changes to China’s rules for imported frozen velvet used in Traditional Chinese Medicine.
From May 1 2024, only dried velvet can be imported into China, from any source, for use as a traditional Chinese medicine.
No frozen velvet from any source will be able to be imported for traditional Chinese medicine use after that date, until the new conditions are agreed.
At this stage, no change is being made to the Regulatory Control Scheme (RCS), nor to NZ’s velvet traceability requirements.
While no timeline has been set, the MPI reassured DINZ it is treating the issue as high priority.
The MPI is aware of the importance of having rules in place for the beginning of the 2023-2024 season, but a complex regulatory pathway involving several different agencies in China needs to be negotiated, DINZ chief executive Innes Moffat said.
The Deer Velvet Access Group (DVAG), a subcommittee of the DINZ board, is working on the issue.
DINZ has appointed project manager with expertise in the market, Damon Paling, to provide extra resource to assist with managing the process.
The DVAG met on February 9 2024 to undertake scenario planning concerning future access for deer velvet.
Paling said the workshop aimed to explore various scenarios that commercial operators may face, including best and worst cases, and to identify priority actions to move forward.
“Participants discussed factors such as risk tolerance, market conditions and long-term objectives when determining strategic positions.
“This included considerations commercial operators may wish to take around safeguarding existing assets, minimising exposure to market fluctuations and managing capital outlay amidst uncertain demand and prices.”
The workshop also explored potential untapped considerations and opportunities for commercial operators, leading to the identification of priority actions to be undertaken.
Post-workshop actions include a summary presentation to the DINZ board and development of a 90-day action plan.
Moffat said DINZ is working on the situation and remains committed to keeping industry informed as developments unfold.
“We will continue to engage with stakeholders, both domestically and internationally, to address challenges and seize opportunities in the evolving landscape of velvet exports to China.”
Long-term, the new regulations “will give NZ clearer, better and more secure access into China for both frozen and dried velvet”, Moffat said.
