Illegal imports are believed to be a likely source of African swine fever in the pig population, widespread across China and causing a big drop in pork production, a key part of the meat diet.
Those imports made up a large part of total imported volumes and the border controls, including the arrest of meat smugglers, led to sharp decline in activity in the final few months of last year, Holgate said.
The supply gap has to be filled by other meats and NZ beef exporters are very well placed to take advantage, with favourable market access arrangements and their supply being delivered only through official channels.
Beef prices in mainland China have been rising despite a 50% lift in imports and a 1.5% increase in domestic production last year. Other meat types have also increased in price because of border controls.
The policing of the borders is expected to continue through the first half of this year.
China has been NZ’s fastest-growing beef market in recent years and exports there exceeded those sent to the United States during the final three months of last year.
Meat Industry Association (MIA) chief executive Tim Ritchie said that might be a timing event rather than China becoming the major individual market ahead of the US on an annual basis but it is extraordinarily important for NZ and month-on-month growth is high.
He hopes the strong demand will continue but the industry here will not be making too much of another country’s misfortunes and they do import from other countries.
NZ exporters will make their own commercial decisions.
“China already takes a significant component of our beef exports and they’ll be managing the risk, not wanting to put too many eggs in one basket. They also have contracts in other markets and will be careful not to shut those countries out.”
Holgate said an overall shortage of supply combined with improving US beef prices and strong demand in Asia as well as China has resulted in a modest improvement in NZ farmgate returns so far this year but he expects to see some softening of prices over the coming quarter as domestic slaughter rates pick-up.
Dry conditions will result in increasing numbers of cattle being sent for processing at the same time as the build-up in culling of non-productive dairy cows.
The Asian (ex-China) demand includes a 58% lift in exports to Japan in the final quarter of last year, ahead of tariff reductions coming in at the start of this year, which will help further. Exports to Taiwan increased 11% in the final quarter.
