Sheep intestines to China do a runner
New Zealand's $160 million sheep intestine trade with China is in a mystery temporary halt as officials work through access issues.
The intestines - familiarly known in the trade as "green runners" but in export parlance as casings - are used to make sausages and a variety of other products.
The total global value of the trade to New Zealand is $300 million.
A New Zealand meat industry delegation which recently returned from China was briefed on the issue. The visit in mid-June marked the first time the meat industry had showed a united front and was a sign of China's growing importance to the red meat trade.
Total red meat industry exports to China are worth almost $1.3 billion. China accounts for 28 per cent of the value of all sheepmeat exports, compared to the next most important, the United Kingdom, at 21 per cent.
The ban on casings mystifies the industry, because Australia has open access. Some have assumed it was a food safety issue.
Silver Ferns Farms board chairman Rob Hewett said his company had added 40 fulltime workers to its Balclutha plant, where the casings were cleaned and graded.
Until the wrangle is sorted, the casings are being diverted to other markets, but the prices received are lower than from China.
Hewett said the trip was an eye opener. It was the first time he had been to China and the numbers of expensive cars he saw convinced him there was a market for top of the range meats. "I saw more Maseratis and Ferraris in a few days in Beijing as I've seen in 12 years in New Zealand," he said.
Silver Ferns sells everything from carcases to casings to packaged steaks. It has recently entered into an agreement with New Zealand Focus in Shanghai to sell online.
The Chinese were moving away from chicken and pork in favour of red meat, he said.
"We are in a good spot with our free trade agreement with China, our food safety record and clean image. At the moment we can't supply enough," Hewett said.
Meat Industry Association chief executive Tim Ritchie said that trade with China had moved much faster than the forming of relationships with key players, and now New Zealand exporters were playing catch up.
"It's very exciting, demand for red meat can't be met domestically in China. At the moment they are satisfying 6 per cent of their demand through imports and that is rising.
"The demand is evolving too. Initially it was whole carcases and lamb flaps, but now it's expanding into higher end cuts, and premium meat sold through top restaurants," Ritchie said.
The delegation saw first hand how the Chinese add value to mutton and lamb flaps. The meat is rolled up "like a dog roll" and sold to hot pot restaurants, where the rolls are cut into fine slivers to put into a broth.
Hewett said his company was at some stage going to have to make "hard decisions" about how much meat to send to China.