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

 

RNZ: Housing Boom Could Get Worse, Economist Warns

Economists are calling on the Reserve Bank to reinstate lending restrictions, warning the housing market is spiralling out of control. More>>

ALSO:

Westpac: Sets Out Plan To Go Cheque-Free

Westpac NZ has announced details of its plan to phase out cheques, after signalling in May that it would be supporting a move to other forms of payment. Cheques will cease to be available as a means of payment after 25 June 2021. Westpac NZ General ... More>>

ALSO:

NZTA: Major New Zealand Upgrade Programme Projects Go To Tender

Two major New Zealand Upgrade Programme projects are beginning tenders for construction. The New Zealand Upgrade Programme is a $6.8 billion investment to get our cities moving, to save lives and boost productivity in growth areas. The first Auckland ... More>>

Reserve Bank: RBNZ Seeks To Preserve Benefits Of Cash

The Reserve Bank – Te Pūtea Matua is taking on a new role of steward of the cash system “to preserve the benefits of cash for all who need them”, Assistant Governor Christian Hawkesby told the Royal Numismatics Society of New Zealand annual conference ... More>>

ALSO:

Economy: Double-Dip Recession Next Year, But Housing Rolls On

New Zealand's economy is expected to slip back into recession early next year as delayed job losses, falling consumer spending, and the absence of international tourists bites into growth. More>>

ALSO:

Microsoft New Zealand: Microsoft Expands “Highway To A Hundred Unicorns” Initiative To Support Startups In Asia Pacific

New Zealand, 14 October 2020 – Today Microsoft for Startups launches the Highway to a Hundred Unicorns initiative in Asia Pacific to strengthen the region’s startup ecosystem. This follows the initiative’s success in India, where 56 startups were ... More>>

Economy: NZ Small Business Recovery Continues In September

Xero, the global small business platform, today released its Small Business Insights (XSBI) for September revealing an uptick in small business jobs and year-on-year revenue growth in New Zealand. Nationwide, the average number of jobs in the small ... More>>

ALSO:


Courts: Businessman Eric Watson Sentenced To A Four-Month Jail Term

New Zealand businessman Eric Watson has been sentenced to a four-month jail term in the UK for contempt of court, TVNZ reports. More>>

OECD: Area Employment Rate Falls By 4.0 Percentage Points, To 64.6% In Second Quarter Of 2020

The OECD area employment rate – the share of the working-age population with jobs – fell by 4.0 percentage points, to 64.6%, in the second quarter of 2020, its lowest level since the fourth quarter of 2010. Across the OECD area, 560 million persons ... More>>

Spark: Turns On 5G In Auckland And Offers A Glimpse Into The Future Of Smart Cities

Spark turned on 5G in downtown Auckland today and has partnered with Auckland Transport (AT) to showcase some of the latest in IoT (Internet of Things) technology and demonstrate what the future could look like for Auckland’s CBD with the power of 5G. 5G is ... More>>

Stats NZ: Monthly Migration Remains Low

Since the border closed in late-March 2020, net migration has averaged about 300 a month, Stats NZ said today. In the five months from April to August 2020, overall net migration was provisionally estimated at 1,700. This was made up of a net gain ... More>>

University of Canterbury: Proglacial Lakes Are Accelerating Glacier Ice Loss

Lake Tasman, New Zealand | 2016 | Photo: Dr Jenna Sutherland Meltwater lakes that form at glacier margins cause ice to recede much further and faster compared to glaciers that terminate on land, according to a new study. But the effects of these glacial ... More>>

ALSO: