Changing Chinese tastes boost crustaceans, hurt other seafood

Published on
April 22, 2016

Demand for crabs, crayfish and shrimp is growing strongly in China, according to data covering the country’s seafood consumption in the first quarter of 2016.

However, prices for domestic freshwater fish and for some species associated with luxury dining, meanwhile, continue to fall in Shanghai, a key consumption market, as well as the important seafood trading port of Yantai.

Data for seafood prices published by local government in Shanghai shows strongest demand for crustaceans, with a 33 percent month-on-month rise in February prices for mantis shrimp. Likewise, tighter domestic supply of shrimp teamed with rising consumption is driving prices up, according to data published by the commercial bureau in Yantai, a key fishing port and seafood processing hub.

Popular for communal dining, the crustacean category has benefited from new consumer trends in China that associated imported lobsters and crabs with affluence. The data compiled from a survey of Shanghai’s five big seafood wholesale markets shows that prices for crustaceans grew by up to 40 percent year-on-year in the January-February period in the run up to Chinese New Year, though prices eased in March after the festival. Traders said business was so brisk, they could even sell small-sized crabs easily. They have been getting an average CNY 110 (USD 16.98, EUR 15.03) per 500 grams of male crabs and CNY 150 (USD 23.15, EUR 20.49) per 500 grams for females.

It should be noted that crabs and crayfish are among the few domestically produced aquaculture species which have been successfully marketed in China, with cooperatives in producing regions like Jiangsu successfully promoting the product as a premium product for diners in mid-priced restaurants and middle-class shoppers.

While there was a rise in prices for the majority (11 of 16) seafood categories surveyed in Yantai, there was a sharp fall for two species, whelk and urechis unicinctus (commonly called ‘sea intestines’ on Mandarin menus) which fell by 12.8 percent and 10 percent, respectively. Both products that have become synonymous with premium dining, the sector that has suffered the most under the government’s recent anti-corruption crackdown. Interestingly, the average price for crabs at wholesale in Yantai in the first quarter, CNY 82.43 (USD 12.72, EUR 11.26) per 500 grams, is starting to draw close on the average CNY 110 (USD 16.98, EUR 15.03) per 500 grams fetched by sea intestines

The data from Shanghai and Yantai also confirms another trend – the slump in demand and pricing for freshwater-farmed staples like carp continues to slump. The Shanghai data shows though volumes of freshwater fish rose 30 percent year-on-year, average prices for freshwater fish species fell 2.2 percent. An average price of CNY 29.10 (USD 4.49, EUR 3.98) per kilogram for freshwater species of all kinds was down 3.6 percent from last year. Seawater species, meanwhile, were up 3.64 percent at CNY 41.3 (USD 6.37, EUR 5.64). Once a valuable freshwater export commodity, eels are in particular trouble, in part due to the devalution of the yen in Japan, the key market for Chinese eels. There has been an alarming fall in eel prices since 2012, as prices at CNY 64 (USD 9.87, EUR 8.74) per kilogram mark their low point over the past four years. Likewise, prices for perch fell 15 percent to CNY 26.38 (USD 4.07, EUR 3.60) per kilogram.

There is good news, however, for anyone selling wild-caught fish species to China, as “wild caught” has become a major price-booster for seafood vendors. In the first three months of the year, Chinese staples like croaker, ribbon fish and pomfret all did well, mainly due to low stocks. This trend is likely to continue as Chinese consumers trade up from carp to “wild-caught” species.

There are factors working in favor of crustaceans in the mid-tiered consumer market in particular. Prices for pork – the protein of choice among Chinese diners – have risen sharply in the past six months, making seafood appear more affordable. Also, a spring crackdown on water pollution, particularly in the Yangtze River delta, appears to have cut some of the extra output projected for regions like Hubei and Jiangxi.

Chinese consumption of seafood, as well other commodities and consumer goods, has come to center around holidays – several of which were lengthened in recent years by the central government, which is keen to encourage its citizens to use the days off work to go out and spend. There are good signs for the second quarter of this year, given the period encapsulates two popular holidays, Qing Ming and May Day, as well as the Dragon Boat festival. This trend is destined to sharpen in years to come, making it imperative for anyone targeting China to build supply around these holidays.

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