Saturday, December 2, 2023

Velvet aplenty but prices ease

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Velvet prices have eased into the new year despite exporters working hard to hold prices up.
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Deer Industry New Zealand marketing manager Rhys Griffiths said concern over the increasing supply of velvet has seen some importers reluctant to commit to orders early in the season.

This is despite fundamental indicators remaining strong in key markets.

“After a decade of reasonable increases in prices and volumes, prices appear to have eased to levels similar to what was achieved the season before last.

“Last season prices went up more than most expected so this could be seen as a bit of a correction. 

“This confirms what we always knew, that the growth in market demand is not limitless,” Griffiths said.

Early in the season some buyers held off from taking a price position.

Now most have come into the market but are taking a cautious approach, committing to smaller volumes than at the same time last year. 

Provelco farmer-owned exporting co-operative general manager Ross Chambers said it is a case of growing bigger not necessarily being better.

Volume has increased but in bigger sticks of velvet and that’s not necessarily what the buyers are after.

“There’s more product around but it’s not product the buyers are looking for so there’s a message to farmers.”

Chambers said there’s no doubting farmers are good at growing velvet and have got very good at growing the bigger sticks.

“Of course, that makes sense, more weight, more money, but there are limitations to that and we are testing that right now.

“Pre-Christmas got quieter than usual but we are still trading velvet.

“There’s been an easing but I don’t see that as unseasonal, more an awkward adjustment.

“With the fundamentals the same we should all be looking to stay positive in the new year,” Chambers said.

Last season about 800 tonnes was exported, up from 700t the previous season. 

On the back of growing herd numbers, genetic improvement and better herd management this year’s production is again expected to lift.

But he cautioned there are headwinds facing the sector, pointing to trade tensions between Japan and South Korea and the trade war between the United States and China. 

Economic growth has slowed in South Korea, the largest velvet market. 

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