China’s mariculture industry takes another hit

Weaker demand for high end seafood species has hit China’s mariculture sector with falling investment leading to poor quality seedlings. That’s according to a new report on the sector compiled by Beijing Shui Shiji Shengwe Jishu (Beijing Water Century Biotech) Corp, a major manufacturer of vitamins and medicines for China’s aquaculture sector. Total maritime cultivation area for shellfish fell by 2.2 percent in 2014 and claims that China’s area for mariculture grew by only 0.6 percent last year, according to the report – that’s way down on an average growth pattern of 8 percent in the decade up to 2013.

This is in turn threatening China’s ambitious plans to drive seafood production through increased use of seawater. There has been a sharp downturn in the production of seedlings for species like sea cucumber and turbot, according to the Beijing Water Century Biotech report, which also claims that 80 percent of sea cucumber hatcheries in Yingkou and Dalian have stopped production. This is worrying for big firms like Zhangzidao Group, Homey Group Co and Guangdong Evergreen Feed Industry Co. which have driven their expansion through developing vast coastal cultivations zones for species like scallops and sea cucumber.
Report author Wang Jinlong says weaker domestic sales are largely to blame for the retreat but he also cites factors like a poor seedling survival rate and lower investment in research and development as reasons for the decline. Wang doesn’t reference the unfortunate demise of Zhangzidao’s deep-sea scallop harvest last year – a disaster for the company and its investors but also a major blow to the credibility of mariculture among the many investors keen to bet on food producing industries in China.

Nonetheless the report clearly chimes with a warning issued quietly by Shandong’s provincial Ocean and Fishery Bureau earlier this year. In any case, China’s mariculture sector appears to be in difficulty with declining cultivation and area for some major species. All of this threatens plans in China to compensate static aquaculture output with increased sea output: several central government white papers over the past decade like the ‘Ocean Granary’ and ‘Ocean Economy’ blueprints have made this clear.

Respected Chinese fisheries experts have also placed much hope on mariculture: China needs to urgently advance its offshore aquaculture efforts to hold onto its edge in seafood production, according to leading Chinese aquaculture researcher Mai Kangsen, dean of the aquaculture school at China Ocean University. Mai calculates that China’s three million square kilometres of territorial ocean is central to expansion of Chinese seafood in the face of tightening supply of land for aquaculture and “continuing deterioration of water quality.”

On land, a tightening of China’s land supply, in part due to pollution as well as industrial and real estate development, means production through mariculture has to increase. China last year had 7.62 million hectares being used for aquaculture according to the agriculture ministry, up 3.81 percent over the previous year: of that figure 6.32 million hectares were used in freshwater aquaculture production. Meanwhile, sea based aquaculture accounted for 1.59 million hectares.

Aside from weaker domestic demand for luxury products like sea cucumber continued growth of Chinese aquaculture is threatened by water pollution. An announcement this summer by local government in Shandong that volumes of production from seawater aquaculture were under threat due to pollution and development caught many off guard. The use of seawater to produce multiple seafood species has given China an edge over many competitors, including European aquaculture which has struggled to match the scale of China where production of several species has become the norm in many seawater operations.

Chinese authorities say 81 percent of China’s coastal areas are “heavily polluted.” China’s State Oceanic Administration in its 2014 annual report said that more than half of 445 pollution discharge points around the coast “failed environmental requirements” last year due to discharges of inorganic nitrogen and phosphates from fertilizers – as well as oil and chemicals from industry. China’s waters are being ruined by “environmental pollution, human destruction and over extraction of resources” according to the Oceanic Administration’s report.

China’s seafood firms this year made a move towards expanding its mariculture industry with the recent establishment of the "Mariculture Industry Standards Alliance," a collection of over 60 firms and institutions involved in the sector. With the stated goal of coming up with a new code of standards for the industry the new body has been set up with the prompting of the Chinese Academy of Fishery Sciences Yellow Sea Fisheries Research Institute, an influential state research body and features key corporate players like Zhangzidao.

Before the Zhangzidao shellfish catastrophe last year much had been made of the potential of mariculture, long a tradition in parts of China like Shandong and Liaoning which are both shellfish production hotspots. Experts like Mai Kangsen have called for a China plan for shen yuan hai (‘deep far off sea’) fish farming to build a national offshore aquaculture sector. But the reality is that most of China’s mariculture research and investment has been driven by domestic demand for luxury species like sea cucumber and shellfish. Right now a combination of weaker demand and man-made problems like pollution are limiting China’s mariculture ambitions.


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