Increased Chinese lamb production and cold storage stocks are expected to have a dampening effect on import demand this year.
Following unprecedented exports in 2013-14, exports to China slipped 13 per cent year-on-year to 35,737 tonnes slaughter weight in 2014-2015.
While other Asian markets picked up some of the shortfall, Meat & Livestock Australia’s international business unit general manager Michael Finucan said it was not enough to fully offset the Chinese void.
The result was a 6.3pc reduction in shipments to the Asian region to 75,018 tonnes swt last financial year.
The subdued demand is set to continue this year with trade to China reportedly slowing due to high cold store inventories.
Mr Finucan said the last couple of years, trade to the region had been tough.
“Australia represents less than 3pc of the market, New Zealand has 6pc and the domestic Chinese sheepmeat represents 91pc of market – we really are influence heavily by what happens domestically with their sheep flock,” Mr Finucan said.
“In 2013 they had a large influx of sheepmeat which flooded the market, depressed prices and that has now put pressure on Australia’s ability to compete.”
He said accuracy about the volumes in storage were vague but hoped the market would correct and stabilise later this year.
“Chinese New Year finished so the year is starting now - we’ll get a better sense what the market is looking like in a couple of weeks when people are back to work and putting orders in,” Mr Finucan said.
“We had two abnormal years in 2013-2014 when we sent a lot of product into the Chinese market.
“The market will steadily grow with ongoing demand and we should expect it to be a very important market for sheep meat.”