Despite the 2021/22 velvet season being an extremely challenging one for the industry, farmgate returns are looking up on the previous season and are continuing the longer-term upward trend.
Source: DINZ
Early revenue estimates for the season ending September 2022, show returns will pass NZ$120m, up from just under $100m for the 2020/21 season.
DINZ’s manager markets Rhys Griffiths believes a couple of factors are behind the positive results.
“The combination of improving prices and increased production has boosted returns” Griffiths says, “However, farmgate price fluctuations continue to be driven by changing market conditions and currency, albeit not to the same extreme volatility experienced by the sector in earlier years.”
Exporting to the growing Chinese market during the global pandemic provided extra challenges for New Zealand buyers and exporters, who worked hard to stop Covid-19 from getting into packhouses and disrupting trade.
Logistical challenges continue in China with “lockdowns still being used by the Chinese government to achieve its current zero-Covid policy,” reportedly impacting business confidence, he notes.
“While South Korea – New Zealand velvet’s largest export market – has started to open, hopefully by the time the next season begins, China will be well on the road to economic recovery.”