China’s Animal Agriculture Association has reported an increase in sheep supply over the past five months.
Meat and Livestock Australia said that the report of more sheep available (while not reported as an actual number), could have created an expectation of increased future supply, with live sheep prices in China declining month-on-month and year-on-year for the first time in two years, averaging RMB22/kg lwt (A$3.79/kg lwt) in July.
Meanwhile, China’s sheep meat production has reportedly remained stable. As demand for mutton usually slows in summer months, average wholesale prices eased in the two months to July, but remained higher than a year ago, at RMB55.02/kg (A$9.49/kg).
MLA’s Global Consumer research in 2014 revealed that local sheep meat is generally preferred to imported sheep meat, citing consumer perceptions of freshness in relation to local product.
New Zealand (NZ) mutton exports to China over the three months to June increased 25% year-on-year, to 13,275 tonnes swt.
Partly influenced by the competition from China’s local sheep and NZ mutton, Australian mutton exports to China declined in the June quarter and into July (at 1,999 tonnes swt), particularly for mutton carcase – the segment that was to supplement the short supply of local sheep meat. This decline might also, in part, be attributed to a drop in Australia’s sheep kill (and, therefore, total mutton availability).
Sheep meat demand in China is expected to start improving from September. While sheep might be available in China, the expected lower sheep and lamb throughput in Australia and NZ is likely to limit shipments to the market.
