Two bits of excellent news for New Zealand’s meat trade with China were announced today: a six-month trial for New Zealand chilled meat exports from 10 plants to the market has been announced and the China-NZ free trade agreement is to be updated.
Minister for Primary Industries Nathan Guy and Trade Minister Todd McClay welcomed a Memorandum of Cooperation, signed during Chinese premier Li Keqiang’s visit to New Zealand today, that allows for the export of chilled meat into China, calling it a big win for exporters.
“This is a fantastic step forward to New Zealand’s red meat sector and a sign of the great relationship we share with China,” says Guy.
The six month trial for chilled sheepmeat, beef and goat meat marks positive progress for New Zealand’s work programme to expand market access to China for a range of New Zealand’s meat products. There is a commitment to seek to expand trade following the trial period.
“Trade in chilled meat will initially involve 10 meat establishments agreed in conjunction with industry. I’m excited that New Zealand’s premium chilled cuts will be enjoyed in high-end restaurants and retailers in China soon.”
The agreement has the potential to be worth hundreds of millions of dollars for New Zealand’s farmers, exporters and the wider economy, says Todd McClay, adding this news follows from the Government’s launch of the Trade Agenda 2030 strategy last week.
“This memorandum is an important step towards meeting our joint target of $30 billion of two-way trade with China by 2030.”
“With great air links to China, exporters have the opportunity to fill returning planes with chilled meat as the demand grows,” says McClay.
China is New Zealand’s second largest market for beef and sheepmeat exports, New Zealand exported around $1.2 billion worth of sheepmeat, beef and offals in the year to end December 2016, a trade that has grown five-fold since 2011. According to Meat Industry Association (MIA) figures, around $525 million worth of frozen sheepmeat was exported to the market, $458 million of frozen beef and $275 million of co-products, including hides and skins, edible offals, tallow, tripe, meat and bone meal and runners and casings.
Onus is on exporters to perform well, says Ritchie
Meat Industry Association (MIA) chief executive Tim Ritchie explains China now accounts for 35 percent of the volume of New Zealand’s total sheepmeat exports, 17 percent of our beef exports and a significant proportion of co-products.
He welcomes the news of the chilled trade opening, which he says will give New Zealand’s higher valued chilled meats a foot in the door of China’s premium retail and foodservice sectors, something that has already been enjoyed by New Zealand’s competitor Australia since it signed its own FTA with China in December 2015. During Premier Li’s visit to that market last week, it was announced that the Australian trial, involving 11 chilled beef and one chilled sheepmeat plant, had now been rolled out.
Ritchie notes the Australians have built up a good trade involving 6,500-7,000 tonnes of chilled beef, reported to be worth A$400 million a year, and now have four times the number of establishments accredited.
“The onus will now be on the New Zealand industry to perform in a way that enables the rollout to occur at the end of our trial,” he says.
Chilled news welcomed by Alliance Group
Alliance Group cooperative has welcomed news of chilled co-operation between the two countries.
David Surveyor, chief executive of Alliance Group, says: “As New Zealand’s largest lamb processor and exporter, we are delighted an agreement has been reached. This is an important first step and great news for New Zealand agriculture.
“Chilled lamb exports to China offer significant opportunities for the co-operative, our farmer shareholders, particularly in the foodservice sector, which is a growing segment of our business and a key part of our strategy to capture more market value.
“Critical to the success of the chilled lamb market to China will be the development of the necessary infrastructure in the country to support our exports.
“Alliance Group has already undertaken extensive trial work with our key in-market partner Grand Farm in preparation for this programme.”
Strong relationship with China
Premier Li Keqiang’s visit is testament to the strong relationship China share with New Zealand, says Guy who also thanked officials from China’s Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) and acknowledged the hard work and close collaboration between AQSIQ and the Ministry for Primary Industries.
Talks between New Zealand and China on an upgrade to the China-NZ FTA will be held in Beijing from 25-27 April. This presents an opportunity to further grow exports in the run up to 2020, ensuring the FTA remains relevant to the modern trade, investment and business relationships between China and New Zealand.