Many restaurants in China are yet to fully reopen and NZ beef appears to be an early beneficiary of growing Chinese retail demand as consumers look for meat from a country with a trusted food production system and a clean and green reputation.
But commentators warn we shouldn’t take this interest for granted, especially when other markets weaken as Governments try to contain the virus.
“China is shaping up as a bright light when our other markets are dealing with pricing pressure and downside from coming to terms with covid-19 restrictions,” AgriHQ senior analyst Mel Croad said.
Data shows NZ export beef volumes to China doubled in February and March though that was affected by supply-chain disruption in February because of covid-19.
March beef volumes are back a third on March last year but indications are orders are increasing because of its perceived health benefits, the ability to buy it online and ease of cooking at home.
Beef exports to the United States held up in February and March, helped by consumers stocking up ahead of movement restrictions.
A consumer report by Quantiful for Beef + Lamb said the Chinese perception of NZ and its beef and lamb strengthened during the covid-19 pandemic, aided by NZ’s battle to contain the virus and the belief our isolation makes us less vulnerable and confidence in our food production systems.
Croad says China is still nowhere near returning to business as usual with many restaurants and food services yet to fully reopen though many hot pot restaurants are back in business.
Restaurants have had to reduce the number of diners and rearranged seating to maintain social distancing.
Croad says growing demand for NZ meat, especially beef, is also helped by our clean, green reputation and continual food safety concerns with pork following the African swine fever outbreak.
With economic activity in North America and Europe weakening as covid-19 takes a grip the resurgence of China is welcome but NZ should be building on that interest.
“The industry should be working to capture that.
“We need to do everything we can to get market demand up and running.”
Food service outlets in Europe and the US are starting to close as consumers are encouraged to stay home, meaning falling demand for high-value cuts such as French racks and loins.
Those cuts are primarily sold through food service and US French rack prices have now dipped below US$9 a pound, less than at the same time last year though the price is still holding up well under the circumstances, Croad said.
The average lamb flap price in China is US$6.15/lb, up from US$6.10/lb this time last year but is also coming under pressure.
In February and March lamb exports to China were up 163% but back 14% between March this year and March last year.
Croad says global uncertainty will most likely see farmgate lamb prices break with tradition and start easing over autumn and winter. Beef prices are also expected to ease marginally.
B+LNZ global market intelligence and research manager Hugh Good says the Quantiful study shows Chinese families are buying food on health attributes in a bid to build protection from covid-19.
“Conversations show that health remains a strong driver of purchasing decisions but they are now much more focused on immunity.
“We’re finding that claims like organic have spiked as shoppers are seeking pure, natural products believing that it’s best for children and elderly,” Good said.
The resurgence of interest in home cooking is prompting Chinese to experiment and exchange recipes and ideas and they are searching for food that is convenient to cook.
Increasingly, that is beef.
Good says these are all signs NZ meat exports to China will recover.
Hot pot restaurants are one of the few venues to reopen widely. In recent weeks people have queued for up to eight hours to get a seat.
