25 Oct 2012

Lamb prices climb in China

10:40 am on 25 October 2012

New Zealand's traditional European lamb markets are in the doldrums - but it's not all grim news.

The European debt crisis, and the resulting economic fallout, has pushed down both prices and demand for lamb in the UK and other EU markets.

Beef + Lamb New Zealand's UK market manager, John Mabb, says lamb is struggling to compete with cheaper alternatives.

However New Zealand is not solely dependent on those markets, and other countries are starting to take up some of the product that had been going to Britain or the European Union.

One of those markets is China, which has become New Zealand's largest customer for frozen lamb.

NZX Agrifax market analyst Nick Handley says that, in contrast to Europe, prices for lamb have been rising in China.

"Retail bone-in sheep meat prices are reported to have been 22% higher in September than a year earlier, with the average price working out at just over $NZ10 a kg, which is 59% higher than the five-year average."

Mr Handley says the prices do not appear to have eroded demand.

Beef trade mixed

Beef + Lamb's market manager for Japan and South Korea, John Hundleby, says those countries are under economic pressure and that's reflected in a mixed performance for the beef trade there.

Competition from American beef is also putting pressure on prices.

He says there was a slight increase in supply to Japan, but a drop in supply and consumption in South Korea.

Despite that, those two countries remain New Zealand's second and third beef export destinations.