Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


China’s taste for hotpot elevates lamb flaps to prime cut

China’s taste for hotpot elevates lamb flaps from offcut to prime cut, sending prices to record

By Tina Morrison

April 29 (BusinessDesk) – China’s taste for hotpot, where meat and vegetables are cooked in a broth at the dining table, has driven a four-fold increase in the price of lamb flaps, turning the offcut into a premium cut and lifting the overall return kiwi farmers can get from their animals.

Lamb flaps, the gristly ends of the ribs trimmed away when the butcher cuts racks and rib chops, used to be considered a cheap cut, retailing for about US$1.35 per kilogram as little as eight years ago. It has soared 84 percent to US$5.84/kg, overtaking shoulder at US$5.64/kg and narrowing the gap with lamb leg at US$8.12/kg, based on Agrifax data.

In China, the meat is processed into a lamb roll and sliced thinly for hotpot, the dominant cooking style for lamb and a staple of the national diet. Chinese sheepmeat imports nearly doubled to 165,300 tonnes in the 2013 export year as a growing population, higher incomes and a decline in the world’s largest sheep flock spurred demand for imported protein.

New Zealand is China’s largest supplier of imported lamb, with a 55 percent market share, as the nation benefits from reducing tariffs under its Free Trade Agreement, according to ANZ Bank New Zealand, the nation’s largest rural lender.

“Prices are at their highest point at the moment,” said Murray Brown, general manager of marketing for Invercargill-based Alliance Group, the world’s largest processor and exporter of sheepmeat. “It is a very good raw material for their hotpot type cooking style, more than some other higher valued cuts.”

There is limited scope to increase volumes and the focus now is on ensuring the current price can be sustained to avoid an overcorrection, Brown said.

“New Zealand needs to be very disciplined in terms of how we manage things like where the lamb flap prices have got to, we want to be able to get it to a level where it can be sustainable,” Brown said. “Prices must be getting to a stage where they will start to plateau.”

The rise in demand for lamb flaps has been good for farmer returns.

“That lift in demand from China for some of those cuts is actually a huge benefit to the sheep industry because then you are optimising your returns from every bit of the carcass,” said ANZ rural economist Con Williams. “It’s an amazing change that has occurred over the last five or six years.”

Increased westernisation of Chinese diets is also spurring demand for more traditional cuts of meat.

“The product forms going in there have widened,” said Alliance’s Brown. “The growth in flap has been significant because of the usage and eating styles but other product forms are now filtering in. What it is really doing is putting a bit of a squeeze on other markets that one day will possibly have to pay a little bit more for some of these product forms.”

In 2011, a lamb supply shortage caused a spike in prices which saw the meat taken off many restaurant menus in Europe and the US, denting demand. That led to a glut in supply the following year which pushed down prices and attracted Chinese buyers to the more traditional cuts of meat, according to Agrifax manager Nick Handley.

“They didn’t really get into those cuts until the price had dropped quite a long way and it suited New Zealand exporters really well because we suddenly had a lot of lamb we couldn’t sell and they jumped in and bought heaps,” Handley said.

As European demand starts to bounce back, analysts are watching whether China will continue to buy the more traditional higher value cuts, he said.

“Exporters are working quite hard with their customers in the Chinese market to help develop demand for the higher value cuts because obviously for us to get the most value out of the Chinese market, ideally we would love them to be consuming some of our higher value stuff rather than just buying at the lower end,” Handley said.

Meat is New Zealand’s second largest commodity export behind dairy, and was worth $5.5 billion in the year through March, according to data published today by Statistics New Zealand.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Trade Agreements: TPP Minus US Starting To Gain Ground

The Japanese government is picking up the pace on reviving the Trans-Pacific Partnership trade and investment deal, with talks scheduled next month among the 11 countries left in the pact after the withdrawal by the US after the election of president Donald Trump. More>>

ALSO:

PACER:

Prices Up 2.2%: Annual Inflation Highest In Over Five Years

"Rising petrol prices along with the annual rise in cigarette and tobacco tax lifted inflation," prices senior manager Jason Attewell said. "Petrol prices in New Zealand are closely linked to global oil prices, and cigarettes and tobacco taxes rise in the March quarter each year". More>>

ALSO:

Undertaxed? NZ Income Tax Rate Second Lowest Among Developed Nations

New Zealand workers pay the second smallest portion of their income to the government among developed nations and less than half the average ratio of their Organisation for Economic Cooperation and Development peers. More>>

ALSO:

Cyclone Cook: Round Up Of This Week’s Weather

One of the significant impacts this week was flooding due to excessive rainfall amounts. Rainfall amounts topped out at 350mm over the past 60 hours in parts of northwest Nelson, with 200mm+ measurements recorded about Coromandel Peninsula, and between 150-200mm in the Kaimai Ranges. Rainfall amounts of between 30-50mm were commonplace elsewhere. More>>

ALSO:

Earlier: Batten Down The Hatches For Cyclone Cook

Although fast-moving, Cyclone Cook will be destructive and MetService Expert Meteorologists have issued Severe Wind Warnings for the whole of the North Island apart from Northland... More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news