Complex 2023-2024 velvet season ahead

Oct 19, 2023

It’s likely to be a complex 2023-2024 velvet season, but there are still positives, DINZ markets manager Rhys Griffiths warned the NZDFA branch chairs.

Last season, which started reasonably before stalling between November and February then re-engaging with large volume buyers from China  after Chinese New Year, was “hard work,” he reminded participants.

Velvetting is starting to get underway on farm. Photo: Angela McIntyre.

Even so, the season finished with 1,040 tonnes of velvet production, exports worth over $100 million and Korean imports increasing by 51 percent, while China was down by 14 percent.

With an uncertain economy globally and continuing supply chain disruptions in China, “those complications could continue,” he said.

While there will be some product sitting in storage – due to the slight misaligment between the end of New Zealand production and the peak consumption period – this will move through quickly once the season gets going, he said. He counselled against unsubstantiated negative talk on prices which can be “really disruptive to the market price.”

Rhys Griffiths, DINZ markets manager sees “pretty firm underlying consumer demand.”

Growth in new health food products in Korea is slowing, he noted, with only 10 launched last season, compared to 27 the year earlier, but companies like KGC, Yuhan Care and Kwangdong are still promoting their branded New Zealand velvet products.

New Zealand velvet has also made “good progress” in displacing Russian velvet in the market, which has more recently seen buyer sentiment turning negative against the latter, following North Korean leader Kim Jong Un’s visit to Moscow.

While there is negative press on China’s economic situation, he noted, “they’re still forecasting five percent GDP growth” and TCM ingredient prices are currently steady.

For him, that adds up to “pretty firm underlying consumer demand over the medium-term.” However, it is often the wholesale market that sets a season’s price. At the time of writing, for this year, that was “a little unclear.”

What Griffiths is clear on is that “more New Zealand velvet will be demanded and consumed in South Korea and China over the next few years.”

That doesn’t, “necessarily mean a lift, or even stabilise, prices going forward, but we do need customers to commit to a value.”

Staying “close to your buyer” will be important for velvetters this season, as well as choosing buyers who have “a long-term investment in your industry.”

Selecting partners with connections to the healthy food market will also be important, he said.

He sees health functional foods as “the next evolution in our market and pointed to Korean research, which has already confirmed a prostate health claim for velvet and the “antifatigue claim is imminent.”

“Instead of sending over the whole dry stick, wouldn’t it be nice to be sending over a nice, branded sachet of velvet extract to the market so big Korean, Chinese and Taiwanese companies can use this in their product formulations.

This aspiration, “won’t happen overnight,” Griffiths admitted, “but is the type of thing we should be aiming for further down the track.”


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