Velvet selling underway

Velvet selling underway

Friday, December 18, 2020

The 2020 velvet antler selling season is well underway, with marketers making large sales to their major customers in South Korea and China, says Deer Industry NZ (DINZ) markets manager Rhys Griffiths.

“Frozen velvet exports in October to Korea and China were nearly double last year’s figures. The volumes were relatively small – October is the beginning of the season – but it was a good start. Meanwhile our velvet processing plants are flat-out, cooking and drying velvet before export,” he says. 

A rack of velvet, after hot water cooking, being moved into a cold air drying chamber, the next step in processing

“While there has been an overall reduction in prices since last season, demand is proving to be resilient, given the impact of Covid on many of our customers. Some farmers have been affected by this more than others. 

“While in previous seasons there have been discounts for velvet that was grown out beyond the industry’s quality grades, this season the discounts applying to these non-typical styles have become greater. They are now as much as 20 per cent compared with properly cut Korean velvet. It’s a clear price signal for farmers to take into account when deciding when to cut their velvet.”

Many Korean customers had successful sales during Chuseok (Korean Thanksgiving) in October, Griffiths says. This is a major harvest festival and three-day holiday held around the autumn equinox, involving gift-giving and family gatherings. Luxury gift packs of health foods, such as deer velvet, are popular items, he says. Coming into winter, it is also the period of highest consumption of velvet generally.

“The success of Chuseok will have given firms the confidence to plan their sales campaigns for Seollal, Korean New Year, which falls on 12 February in 2021. Offsetting that will have been a level of caution based on fears about what Covid-19 might do next.”

That caution was justified. Korea, the largest market for NZ velvet, is now experiencing a major second wave of the pandemic. Lockdowns are hugely disruptive of retail sales and supply chains, Griffiths says.

“It appears that firms that have a major on-line presence have done well throughout the pandemic. In contrast, some retailers have been hard-hit. Duty-free stores in particular. Chinese tourists were an important market for many Korean retailers selling luxury items, until the borders were closed in response to Covid.”

In China, where Covid appears to be largely under control, Griffiths says a small number of highly respected companies are showing an interest in developing sophisticated health food products based on NZ velvet. They are in regular contact with China-based business development managers working for DINZ and NZ velvet marketers.