New Zealand lamb prices, trading at a three-year low, may rise 10 per cent next season, on lower Australasian supply and increased demand from China, says ASB Bank.

Lamb prices averaged just above $5 a kilogram from October to mid-May, the lowest since the drought-hit 2012/13 season, as early lamb processing saw much of the meat sold into a weakening frozen-export market, and as China and Britain processed more of their own flocks.

ASB expects prices to lift at least 50c a kg next season from October.

The first signs of a lift in lamb prices may have emerged, with prices spiking 4.5 per cent in Kiwi dollar terms over a week, drawing level with the same time a year earlier, according to ASB's latest New Zealand Commodity Price Indices.

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NZ export lamb production is tipped to fall 7.8 per cent to 19.6 million head in the season ending September 30, according to Beef + Lamb NZ.