Sheep meat demand in the Chinese market increases


The main suppliers, Australia and New Zealand, may see a decline in their market share due to anticipated supply shortages.

Posted on Jul 04 ,08:53

Sheep meat demand in the Chinese market increases

China has increased demand for sheep meat in the first 4 months of 2019 leading to higher export volumes for Australia and New Zealand. China' Custom data reveals that during the first four months of the year, sheep meat imports have increased by 18% compared to the same period last year, reaching 140,600 tonnes.
The two suppliers for the Pacific area accounts for 98% of that volume shipped to China, with Australia sending 51,500 tonnes (+30%) and New Zealand delivering 86,500 tonnes (+11%) in this market.
"The increase in product availability from Australia could be a result of extensive drought conditions that has led to increased slaughterings with an anticipated annual flock decline of 3.7% by June 2019", commented Alex Cook, AHDB Analyst.
Nevertheless, both countries will find it hard to keep up the pace with China's demand for animal protein to substitute the pork. "Australian and New Zealand lamb exports are forecast to decline in 2019 as a result of anticipated supply shortages, according to MLA. However, Chinese import demand is expected to continue to grow as the country begins to open markets for other protein sources to lessen the impact of ASF. Under ordinary circumstances, if the UK sheep industry were to gain access to Chinese markets, prices would have to become competitive with the main sheep meat exporters to gain market share", says the analyst.

Since the start of 2019, the average wholesale price for sheep meat in China has been relatively stable around the 60 yuan/kg level ($8.60/kg). Prices throughout this year have been above both last year and the 3-year average.

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