UK crab industry aims to get claws back into China

Published on
June 6, 2016

Now that China has lifted a lengthy ban on its crabs, crustacean suppliers in the United Kingdom find themselves in position to launch a fresh assault on China’s hugely lucrative market.

Chinese authorities introduced an embargo on the import of live crabs from the United Kingdom last year after tests found excessive cadmium levels in samples of the shellfish. The ban was quietly lifted recently, U.K. Fisheries Minister George Eustice told delegates at the Shellfish Association of Great Britain (SAGB) 47th Annual Conference in London last week. Raising awareness of this change is very important to the country’s exporters so they can quickly revitalize a trade that, prior to the ban, was valued at around GBP 30 million (USD 43.3 million, EUR 38.6 million) per year.

The value of U.K. crab exports could easily be worth even more than that, according to Karen Morgan, agriculture, food and drink councilor at the British Embassy in Beijing. Also speaking at the SAGB conference, Morgan said the Chinese market is brimming with opportunities for U.K. shellfish, due to the higher demand for seafood among China’s growing middle class, which now totals more than 105 million people.

Having played a big part in the lifting of the Chinese ban (along with the SAGB), Morgan stressed the great potential for U.K. crab in the market. She said that culturally, Chinese people appeared to have a “special relationship” with crab and that the peak periods for its consumption are spring (April to May) and fall (September to October). She also highlighted that crabs are sold in a variety of ways, including vending machines, and in a plethora of formats – with deep fried crab-on-sticks a very popular snack.

China’s demand for seafood is huge, with its consumption accounting for 34 percent of the global supply, said Morgan. Despite being a net exporter of fish, China still needs to import large volumes to meet the needs of its domestic market. Imports of seafood into China currently amount to 4.2 million metric tons (MT) with a value of GBP 9 billion (USD 13 billion, EUR 11.6 billion), and the demand is being further exacerbated by recent domestic food safety scandals and environmental challenges.

Aiding British efforts to import seafood to China, Chinese citizens generally believe that imported products are cleaner and healthier than domestic products and are therefore willing to pay a premium for imported seafood, Morgan said. At the same time, supermarket and hypermarket chains are growing rapidly in China, as are the number of specialty and import-focused stores. Furthermore, the trend for a convenience lifestyle is tipping the demand from fresh to frozen and processed products.

Another opportunity for crab and other shellfish can be found in China’s e-commerce platforms, which are competing against traditional sales channels to sell seafood products. In order to gain advantages over other online sellers, some have extended their product portfolios to include imported, high-end seafood products, Morgan said.

Sales of fresh food via e-commerce in China reached CNY 26 billion (USD 4 billion, EUR 3.5 billion) in 2014, an increase of 100 percent year-on-year. In that year, the country’s overall online sales grew 35 percent to USD 452 billion (EUR 405.2 billion), giving it top ranking among the biggest e-commerce markets. In second place was the United States with sales totaling USD 305 billion (EUR 272 billion), up 27 percent year-on-year, followed by the United Kingdom with sales of USD 82 billion (EUR 73.1 billion), 12 percent more than the previous year.

However, with such grand opportunities available, Morgan said exporters should be prepared to face fierce competition – there are currently 120 countries sending fish and shellfish into China. Nevertheless, its consumers do hold U.K. food in elevated regard.

“They have a low opinion of U.K. cuisine, but have a high opinion of our products,” she said.

In 2014, the value U.K. food and drink exports to China totaled GBP 495 million (USD 713.6 million, EUR 639.7 million), which was triple the amount achieved in 2008. In value terms, the leading product was salmon (including smoked products) at GBP 65 million (USD 93.7 million, EUR 84 million), followed by whiskey at GBP at GBP 39 million (USD 56.2 million, EUR 50.4 million) and pork at GBP 22 million (USD 31.7 million, EUR 28.4 million).

The overall U.K. total increased to GBP 580 million (USD 836.2 million, EUR 749.6 million) last year, and the 2016 forecast is higher still at GBP 795 million (USD 1.1 billion, EUR 1 billion).

Morgan explained that the U.K. government has a global export target of GBP 1 trillion (USD 1.4 trillion, EUR 1.3 trillion) by 2020, which will be delivered by 100,000 new exporters. This ambition will be partly driven by government policy that includes a 25-year food and farming plan aimed at growing, buying and selling more food, as well as the Great British Food Unit, which promotes U.K. food products abroad and helps to open up new markets, and an Export Action Plan.

With China’s food and drink market now worth USD 1.5 trillion (EUR 1.3 trillion) and the country expected to become the world’s largest importer of food by 2018, the United Kingdom’s exporters should now consider China to be “a top priority target,” Morgan concluded.

Contributing Editor reporting from London, UK

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