China meat deal will require infrastructure - Exporters

Alliance Group chief executive David Surveyor. Photo / Supplied

Development of the necessary infrastructure to support New Zealand exports will be critical to the success of the chilled lamb market to China, Alliance Group chief executive David Surveyor says.

In April last year, then prime minister John Key announced New Zealand and China had agreed to protocols relating to chilled meat, which was lauded as being set to add hundreds of millions of dollars in returns from red meat exports.

A chilled meat memorandum of co-operation between New Zealand and China has now been welcomed by Primary Industries Minister Nathan Guy and Trade Minister Todd McClay, who described it as a "big win'' for exporters.

Mr Surveyor said the agreement was an important first step and "great news'' for New Zealand agriculture.

"Chilled lamb exports to China offer significant opportunities for the co-operative, our farmer shareholders, particularly in the food service sector, which is a growing segment of our business and a key part of our strategy to capture more market value,'' he said.

Alliance Group had already undertaken extensive trial work with its in-market partner Grand Farm in preparation for the programme.

Silver Fern Farms chief executive Dean Hamilton also described the memorandum as "welcome progress''.

"China is a very significant market for New Zealand's red meat and our second-largest behind the US. The agreement to trial chilled product will open further opportunities over time,'' Mr Hamilton said.

Silver Fern Farms would be working closely with its Chinese customers to build chilled supply chain capability, he said.

Mr Guy said the six-month trial marked very positive progress for New Zealand's work programme to expand market access to China for a range of meat products. It would initially involve 10 meat establishments agreed in conjunction with industry.

Mr McClay reiterated the agreement had the potential to be worth "hundreds of millions of dollars'' for farmers, exporters and the wider economy.

"Part of the Trade Agenda 2030 strategy, launched last week, is to maximise the benefits of our existing trade agreements.

"This memorandum is an important step towards meeting our joint target of $30 billion of two-way with China by 2030,'' he said.

China was New Zealand's second-largest market for beef and sheep exports. New Zealand exported about $1 billion worth of frozen sheep and beef meat in the year to December 2016, a trade that has grown five-fold since 2011.

"With great air links to China, exporters have the opportunity to fill returning planes with chilled meat as demand grows,'' Mr Guy said.

An agreement that would allow China to export retail-ready fresh unpeeled onions to New Zealand had also been signed.

Mr Guy also welcomed the signing of an agreement with China aimed at strengthening co-operation in fisheries, and an agreed list of projects to begin as part of the Agricultural Growth Partnership, which was signed last year.