A CHILLED lamb and mutton air freight shipment from Western Australia to China this month is an indication that trade relations between the two countries are improving, according to AustAgri Development Pty Ltd ‘s meat and agricultural consultant Mr Eddie Zhi.
Self-proclaimed ‘Fast Eddie’ said his import agent in China, the Zhejiang animal and byproducts corporation, was recently granted an import quarantine permit and quota into China for mutton and lamb.
He has organized a 10-tonne shipment of fresh chilled lamb and mutton carcases from Western Australia to the eastern China business and coastal centre Shanghai. The shipment will be first chilled Australian sheep meat carcase shipment to China in more than two years, although there has been some chilled cuts consignments this year.
Australia and New Zealand are approved suppliers of chilled sheep meat to China; however, New Zealand has an advantage with more listed plants, according to the MLA. Most Australian sheep meat exported to China comprises frozen cuts such as breast and flap, manufacturing, carcase and neck that are further processed in market. Australian lamb on the menus of high-end western-style restaurants, five-star hotels, and high-end hot pot establishments has driven growing demand for higher value cuts such as racks, backstraps and loins.
Episode3 director and analyst Matt Dalgleish said trade figures showed that Australia has had a five year average of 228 tonnes/year chilled sheep meat (lamb and mutton) exported to mainland China up to 2020, with nothing in the 2020-2021 and 2021-2022 financial years, nor so far in 2023.
“The chilled combined lamb/mutton total in 2020 was 117 tonnes.”
Combined frozen mutton and lamb exports to China in the 2022 calendar year totaled about 109,000 tonnes and 120,000 in 2021. In the first four months of this year, 46,835 tonnes of frozen lamb/mutton has been shipped to mainland China, compared to a year-on-year figure of about 40,000 in 2022, he said.
“This year is the strongest we’ve seen it (frozen sheep meat imports) on record.”
Mr Zhi said industry insiders are working tirelessly with both governments on the trade relationship.
“You will see further dramatic improvements in the China-Australia relationship in the coming months before the anniversary of Chinese and Australian full diplomatic relations 51 years ago engineered by the then Whitlam Labor government.”
Mr Zhi said he initiated sending premium chilled lamb carcases to China to differentiate Australian product from frozen product from other South American countries, Uruguay and Chile particularly when the import duty to China has been cut down to 0.
About two-thirds of sheep meat in China is typically consumed outside the home according to MLA and USMEF. But a Fitch Solutions report said per capita and household annual spending on discretionary items is forecast to double from 2016 to 2026, boding well for consumption of niche proteins such as lamb.
MLA said rapid growth in household ownership of particular cooking appliances such as air fryers, multi-functional microwave ovens and electric hot pot cookers, accelerated by the boom in home cooking due to the pandemic, is presenting new growth opportunities for Australian product at retail. The Xinsijie Industry Research Centre National said sales of air fryers are reported to have increased over 20-fold from 743,900 units in 2016 to 16.4 million units in 2020 and increased a further 124pc in Q1 2022.
Chilled lamb to be marketed direct to consumers
Mr Zhi said a previous goat shipment to China was marketed business-to-consumer (B2C) and his lamb shipment will be consigned direct to affluent consumers in the same way, along with video instructions on how to dissect carcases for cuts-based cooking to supplied recipes.
He said chilled lamb can be marketed to clients in China at a premium price due to its taste advantages.
“Chilled product also stays ahead of China’s constantly improving quality requirements, he said.
The lamb will be sold mostly sold B2C on social media, exclusively WeChat, and delivered by the Shunfeng delivery services and logistics company.
Mr Zhi said China will very soon demand from the USA and Middle East top-end sheep products such as chilled premium light weight lambs rather than just volume mutton of any kind.
He believes sheep meat demand from China can help consume the sheep and lambs that previously might have been exported live to the Middle East from Western Australia.
“Yes definitely, and possible live export to China too if there is a protocol in place for live sheep.
Mr Zhi supports the Albanese Government’s belief in increasing value-adding of sheep meat in WA.
“Yes of course, but it must come with the drastic improvement of processing efficiency and deeper understanding of the Chinese market unique requirements: not for curry sheep meats or Turkish type products of kebabs.
“Slow cooking with minimum spices is the preferred cooking method for top end sheep meats,” he said.
“Fat lamb is not really necessarily much appreciated by Chinese customers unless it’s for whole barbecue lambs.”
With four abattoirs currently for sale in Western Australia, Mr Zhi said Chinese interests are considering the plants’ potential.
“With a proven record of 2019 introducing Woodward Foods Australia to a Chinese investor Hairun,
“We are now actively introducing clients to explore the potentials of these plants,” he said.