China drives resurgence of NZ deer industry

The New Zealand deer farming industry is looking at significant expansion of its velvet market after China overtook South Korea last year to be the biggest export destination, a senior industry official said Thursday.

The Chinese market had boomed with the development of a major deer products processing and trading hub in Xifeng, in northeast China's Liaoning Province, and with China's increasingly prosperous population, Deer Industry New Zealand velvet marketing manager Rhys Griffiths told Xinhua.

"Last year we saw about 62 percent of the industry's exports going direct to China. To put that in perspective, the figure was about 8 percent in 2007," Griffiths said in a phone interview.

Velvet exports to China were valued at about 17.5 million NZ dollars (13.83 million US dollars) in the 12 months to the end of September last year.

"We're obviously happy with those results in terms of how rapidly China has become a good market for our industry," he said.

The growth of the China market could lead to a rebuild of the New Zealand deer industry, which peaked in 2001 with about 1.9 million farmed animals, but had since dropped to 1.1 million, although New Zealand still remained the world's biggest deer farming country, he said.

"We wouldn't like to see a rapid expansion of tonnage of velvet. It's a market that is supply and demand sensitive -- when there's an oversupply, prices can drop quite sharply," said Griffiths.

Much of the velvet exported to China was frozen for processing into traditional medicines and foods and then re-exported, mainly to South Korea, which had consumed about 85 percent of New Zealand deer velvet from 2005 to 2007.

"A growing percentage of that product will remain in China, where it's a very respected health product historically. It's quite natural to see as we see the wealth creation in China," he said.

"It doesn't hurt to have the New Zealand brand take off as well. New Zealand is gaining in reputation as a quality producer."