Prices for beef and sheep meat rising fast in China, as are our exports

In February, Chinese food prices went up by 6.0% year-on-year, representing a 2 percentage points increase in the overall price rise of 3.2% in their CPI.

And most of that increase was for beef and lamb.

For New Zealand exporters this represents a significant opportunity.

Beef prices have risen 34% in a year; prices for sheepmeats are up 13% according to February price data published by the Chinese statistics authority yesterday.

At the same time, the NZ dollar has actually depreciated by 0.5% against the Chinese yuan, although it appreciated by 0.5% against the US dollar, according to RBNZ average monthly exchange rate data. These are tiny movements on a year-on-year basis (Feb-on-Feb) although the intervening period has seen greater variability.

New Zealand's meat trade with China has started to grow very strongly in recent years, although off a fairly modest base. It is not so modest anymore.

Beef products accounted for NZ$62.1 million in exports in the year to January 2013, up NZ$50 million or almost 400% on the previous year. Sheep meat products are worth considerably more, achieving $364 million in the year to January 2013, and these grew $161 million or 78%, in that annual period.

Both beef and sheep meat exports have been growing strongly for a number of years and the rate of increase is rising.

The growth in the China market more than offset falling lamb demand in the traditional UK markets where we exported $30 million less in the year to January 2013. The fall was even greater in the US where the decline exceeded NZ$60 million.