Pressure on China’s tilapia supplies
By Mark Godfrey, SeafoodSource contributing editor reporting from Beijing, China
Published on 04 July, 2011
Lower-than-usual temperatures has put pressure on tilapia supplies in southern China and forced prices upward. An unseasonably cold spring has had a “huge” impact on tilapia production, according to Yuan Zhuren, a researcher at Chinese Academy of Fishery Sciences Freshwater Fisheries Research Center, a research body attached to the Ministry of Agriculture.
Exporters agree. “This has not been a good year for tilapia production … Normally the temperature never goes below zero but this year it has,” Alan Wang, sales manager at Qingdao Pan Kai Import & Export Co., which processes and ships whole and filleted tilapia to the United States, told SeafoodSource.
Based in Guangdong, the semi-tropical southern province neighboring Hong Kong, Zhuren explains how local tilapia farmers were hit because the temperature in mid-March to April, usually a reliable 25 degrees C, was lower this year. It was “too cold for farmers to reproduce tilapia stocks,” said Wang. With the temperature climbing to only 25 degrees by late May, about a month later than usual, “supply tightened and market prices thus shot up.”
Tilapia prices in May hit a record RMB 11.20 per kilogram, said Landy Chow, general manager at exporter Siam Canadian’s Guangzhou office. But prices have since dropped back to RMB 9 per kilogram. Chow said many farmers had anticipated the colder weather and sold their stocks before the spring because of worries of a repeat of the famously cold 2008 winter, which saw snowfall in semi-tropical Guangdong.
“The U.S. market isn’t willing to pay that rate [RMB 11.20 per kilogram], and you can’t keep the fish forever,” explained Chow. Sluggish demand in the main market, the United States, also helped drag prices back. “U.S. inventory stocks are high and sales are slower, so high prices can’t be sustained.”
Making up for lower production in Guangdong won’t be easy. Shifting tilapia production from Guangdong to lower-cost neighboring provinces like Hunan and Hubei isn’t an easy option, explained Chow, given the shorter production period due to the climate, which in both provinces are colder than the ideal tilapia-producing temperature of 18 degrees C.
“If you can harvest only once a year, your costs of production will naturally be higher,” said Chow.
Zhang Yuren believes shifting production overseas isn’t a threat to China’s tilapia sector: “Some investors are switching production to Vietnam, but their technique of production still cannot compare with China. China’s techniques of hybridization and reproduction are both much better than theirs, and our high production guarantees us a big market.”
While most of China’s tilapia is produced in the country’s south, much of the trading and processing is centered in the city of Qingdao — local facilities process salmon, cod and pollock imported from Russia and Alaska, said Alan Wang.
Still, some Chinese seafood exporters have pulled out of tilapia production. Among them is Hainan Jiadexin Foodstuff, which is based on Hainan island province just east of Vietnam. Head of international sales, Crystal Yang said the firm has abandoned tilapia to concentrate on shipping shrimp to the EU market.