WELLINGTON - New Zealand's free trade agreement (FTA) with China saved exporters of sheep and cattle products almost NZ$25 million ($20.82 million) last year in tariff payments, according to New Zealand's meat marketing organization.

The amount was set to grow as tariffs continued to fall and export volumes grew, said Beef and Lamb New Zealand.

Exports of sheep and beef products to China totaled NZ$687.4 million last year, with tariff savings of NZ$24.8 million.

"Those volumes are trending upwards as China continues to develop rapidly, with a growing middle class population looking to increase protein consumption, and that includes our beef and lamb, " said the organization's chief executive Scott Champion.

"The number of consumers considered to be wealthy from a global perspective is growing significantly and this is driving increased consumption of imported food products."

China imported 29,800 tons of New Zealand's total mutton exports of 355,000 tons, making it the second largest market by volume after the United Kingdom and ahead of the United States.

"Crucially, the Chinese market is looking for quite a different product mix compared to our traditional mutton markets such as the UK and US which take the higher value cuts like lamb legs and French racks."

China was a key market for "sheep flaps," which were used in the traditional hotpot dishes.

Exports to China of co-products like fats and oils and animal casings were worth NZ$170 million last year, on which the FTA resulted in savings of an estimated NZ$12 million in tariff.

The FTA also provided a tariff quota of 27,563 tons of New Zealand clean wool this year, which would rise by 5 percent a year until 2017 creating an eventual tariff quota of almost 37,000 tons.

Champion said the China FTA could deliver another NZ$21 million by the time the tariffs were fully eliminated in 2016.

Beef and Lamb New Zealand represented the country's sheep and cattle farmers when the government was negotiating the FTA.

The free trade agreement with China came into force in October 2008 and New Zealand is now in negotiations for a free trade agreement with India.