“On 31 October, MPI notified us that we had clearance to export, but less than 24 hours later we heard a report of a major buyer up in China starting to offload excess stock that they’d taken in.
“The buyer thought there was no way that New Zealand and Chinese government officials would be able to restore market access so quickly, so they’d bought up a lot of velvet.”
Griffiths said due to the flooded market, prices were down about 20%, and that meant some farmers would not make a profit this season.
He said some were holding on to product rather than accepting the lower prices, while other companies are selling at the lower price.
“It really comes down to cashflow, I can completely understand where people may have had to offload product, sometimes it’s a long time between cheques.
“But I am hearing that people are being offered prices below the cost of production which is unacceptable, so some farmers are keeping product in the freezer until prices rebound.
He said while there were headwinds this season, the outlook for velvet remained positive.
“The annoying thing is that demand for our velvet in China and South Korea is really strong, it’s simply a supply-and-demand issue at the moment.
“We’re hearing at the retail end that people are still consuming New Zealand velvet for all its amazing qualities so we know things will turn around.”
- RNZ
