Comment: Despite Brexit and the US-China trade war, trade fundamentals for our red meat sector are still some of the strongest in living memory, says Sam McIvor, CEO of Beef + Lamb New Zealand.

With all the focus in recent weeks on Brexit and the US-China trade war, you could be forgiven for thinking that New Zealand's international trading prospects were looking gloomy.

Despite all the high-profile headlines, the reality is the trade fundamentals for our red meat sector are still some of the strongest in living memory.

So, let's deal with the two large dark clouds on the trade horizon first.

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Brexit, when, or if, it happens will present challenges for our exports to the UK and European Union. But across the sector, and in partnership with the government, we're as prepared as we can be to deal with any disruptions.

We're also continuing our fight against any erosion of our previously negotiated WTO access rights, such as the proposal to split the quota between the UK and EU.

News that the Brexit deadline has been extended to 31 January is welcome news, however, given the Christmas lamb trade in the UK.

Chief executive of Beef + Lamb New Zealand, Sam McIvor. Photo / Supplied
Chief executive of Beef + Lamb New Zealand, Sam McIvor. Photo / Supplied

All eyes are now turning to the UK's General Election on 12 December, with Brexit set to be the key issue that the election turns on, and Beef + Lamb New Zealand will be following developments closely.

The other cloud hanging over international trade has been the United States-China trade war. While New Zealand has escaped any direct impacts from it, the uncertainty it has caused and the increased protectionism it promoted aren't good for anyone.

It's pleasing to hear signs that this may start to be de-escalated in the coming weeks as talks progress between Beijing and Washington.

On a similar note, Beef + Lamb New Zealand is also investing in our presence in the US market and relationship both through our Taste Pure Nature country of origin brand and a new person on the ground in Washington as well.

Genuine import demand

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Beyond all this high-stakes drama, things are looking very positive for our red meat exports. The African Swine Fever (ASF) epidemic is seeing increased demand from China for manufacturing beef as a like-for-like substitute for pork.

Contrary to some commentary, ASF isn't the main driver of New Zealand's increasing exports to China, it's something that is far better news for us: genuine import demand for New Zealand's beef and lamb.

Increasing consumer demand for mutton, which picked up in 2016, has outpaced China's growth in production and has extended to lamb imports. China has now become New Zealand's largest export market for chilled beef too.

Growth in China isn't the only game in town though. The Comprehensive and Progressive Trans-Pacific Partnership came into effect at the start of the year to benefit the sector.

The Japanese market has grown 25 per cent in volume and is now our third most valuable beef market.

The government has begun formal negotiations with the EU on that elusive free trade agreement and we're advocating strongly on behalf of New Zealand's red meat sector, as we know this will be a topic aspect to the deal.

- Sam McIvor is the chief executive of Beef + Lamb New Zealand.