TL;DR: Australian lamb and mutton set record exports in 2023, surpassing 50% of global shares. This growth challenges New Zealand’s market position, especially in China, as logistical issues and competitive pricing dynamics redefine the landscape of global sheepmeat trade.
In a striking development, Australian lamb and mutton have hit record production levels, propelling exports beyond expectations. For the first time, over half of the world’s sheepmeat exports in 2023 came from Australia, showcasing its growing influence in global markets.
This surge has intensified competition, especially affecting New Zealand, traditionally the second-largest exporter. The rise in Australian supply has shifted market dynamics, notably diminishing New Zealand’s presence in the lucrative Chinese market. Moreover, logistical challenges have further constrained New Zealand’s efforts to broaden its market reach.
China’s Growing Appetite
China, the largest consumer of sheepmeat, witnessed a remarkable 24% increase in imports, amounting to 429,434 tonnes in 2023. Despite New Zealand’s efforts, its exports to China grew only by 10%, reducing its market share. Contrarily, Australia’s exports to China soared by 43%, significantly enhancing its market presence.
Competitive Pricing
The rivalry extends into export pricing, where traditionally, New Zealand lamb enjoyed a premium over Australian lamb in China. This premium has largely vanished since 2022, bringing both nations’ products to a similar price point, influenced by exchange rate fluctuations.
Navigating Supply Chain Challenges
While New Zealand grapples with reduced market share in China due to Australia’s increased supply, it also faces logistical hurdles. For instance, Australian exports to the Middle East and North Africa saw a 51% increase in 2023, indicating a rebound in demand for chilled lamb, a preference in many markets.
Conversely, New Zealand’s exports of chilled lamb continue to decline, limiting its penetration into markets with a strong preference for chilled products.
The Outlook
The evolving dynamics underscore the competitive nature of global meat markets. Australia’s record production and strategic positioning have allowed it to capture significant shares, particularly in China, challenging traditional exporters like New Zealand. As market preferences and supply chain factors continue to evolve, both countries will need to adapt to maintain and expand their global footprint.
