Tuesday, April 23, 2024

Meat sales to China boom

Neal Wallace
China became an even more crucial market for red meat exports in May with sales growing 23% compared to the same month a year earlier and offsetting sharp declines in exports to United States, Britain and Japan.
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Meat Industry Association figures show total May sales for sheep meat, beef and by-products of $884 million, a 2% decline on a year earlier.

Sales to the US fell 15%, Britain by 10% and Japan 9% but there were increases of 31% to Canada and 13% to Taiwan with the Canadian lift from a 160% increase in beef sales worth $17 million.

Canada is a member of the Comprehensive and Progressive Trans Pacific Partnership and association chief executive Sirma Karapeeva says the increase in sales demonstrates the importance of trade liberalisation.

“While most beef exports to Canada are tariff-free, prior to the signing of the CPTPP Canada did apply a quota limit on the amount of New Zealand beef that could be imported tariff-free.

“Any beef exports outside of this quota would incur high tariffs.

“As part of the CPTPP this out-of-quota tariff rate is being reduced to zero over a period of six years, allowing NZ beef exports to fully respond to changes in market demand,” she said.

The volume of beef exported in May hit a seven-year low, according to AgriHQ’s Livestock Insight report.

For the month 31,050 bulls were processed, 13,200 fewer than May last year and 6900 less than the five-year average.

The deficit was driven predominantly by a lack North Island bulls, which were killed earlier in the season.

In contrast to the bull kill, May data shows the impact of delays in getting prime cattle slaughtered.

For the month 92,380 prime cattle were killed, 9620 fewer than a year earlier and 4200 fewer than the May five-year average.

Analysts say that suggests processors were reluctant to slaughter at full capacity because of a lack of confidence in the global restaurant trade, which is affected by covid-19 shutdowns.

The virus is also damping demand for hides with prices continuing to weaken because of competition from imitation products and environmental pressure on processing plants.

Average export returns for hides have dropped to $1.96/kg compared to $2.38/kg for the corresponding time last season, with little likelihood of improvement.

The latest export value statistics from May show the average was $1.17/kg, which is 79c/kg below last May, driven by a 40% downturn in the volume of tanned and crust cattle hides heading to NZs highest-value market, Italy.

With the economic fallout from covid-19 weighing heavily on luxury leather goods analysts say it could be some time before hide export returns improve.

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