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.


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.