Coronavirus: New figures show importance of Chinese market to meat exporters

As New Zealand primary industries feel the effects of the outbreak of coronavirus in China, new export figures have underlined the importance of the Chinese market to meat exporters.

Analysis by the Meat Industry Association (MIA) shows sheepmeat and beef exports increased to $9.1 billion in 2019.

The growth was largely a result of the growth in overall exports to China, which increased by 57 per cent to reach $3.7 billion.

Sheepmeat exports to China grew by 40 per cent to $1.6 billion for the year, and beef exports by 113 per cent to $1.7 billion.

Meanwhile, the total value of exports to Japan increased by four per cent to $367 million for the year.

This was mainly a result of an 11 per cent increase in the value of beef exports to Japan during the year, which grew to $183 million in 2019.

There was also an increase in exports of beef offals to Japan, which grew by 37 per cent to reach $48 million for the year.

New Zealand meat exporters have benefited significantly from tariff reductions into Japan following the Comprehensive and Progressive Trans Pacific Partnership agreement coming into force at the beginning of the year.

Tim Ritchie said underlying global demand for protein remains strong, despite the coronavirus outbreak in China.
Tim Ritchie said underlying global demand for protein remains strong, despite the coronavirus outbreak in China. Photo credit: Supplied

There have been total tariff savings of nearly $25 million on beef and offal exports to Japan over the year.

Chief executive of the Meat Industry Association, Tim Ritchie said the latest figures reinforce the importance of the sector to the New Zealand economy.

"The meat processing industry is New Zealand's largest manufacturing sector and employs approximately 25,000 people, many from regional and rural communities. 

That's why we need to ensure any policy reforms, whether that be climate change, forestry or freshwater, need to be carefully thought through so as to avoid any negative unintended consequences," said Ritchie.

Ritchie said the outbreak and spread of the coronavirus has disrupted the supply chain for red meat in China and the sector continued to assess the impact of the situation.

"Despite the issue in China, the underlying global demand for protein remains strong."

Meanwhile Rabobank researcher Tim Hunt said the biggest issue was getting meat products into and around China. 

"Air freight is compromised due to reduced passenger rates, shipping has been slowed down. If you can get the product into China the next problem at the moment is that people just aren't eating out," said Hunt.

He said New Zealand farmers would have the automatic stabiliser of a falling New Zealand dollar but the effects would still be felt.

"If this shutdown continues into the second quarter then it's going to be difficult for New Zealand agriculture and the economy to avoid material damage even if we do see the New Zealand dollar fall."

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