Tilapia to slump as China shifts to high-value species

Published on
September 30, 2014

Mainland China will ultimately seek to shift some of its aquaculture away from tilapia to more high-value species, according to a senior fisheries expert in Taiwan, traditionally the source of much of mainland Chinese aquaculture investment and know-how.

A shift in species will see mainland China following a trend already set in Taiwan, with tilapia producers for instance shifting from tilapia to increased volumes of grouper and cobia, predicts Juh-ing Hsu, secretary general of the Taiwan Frozen Seafood Industries Association. Hsu also expects there will be increased use of mariculture in mainland China, mirroring a similar trend in Taiwan.

Taiwan’s government has set a priority on developing its grouper sector: There’s a premium for groupers flown live to Japan, for instance, Hsu told Seafoodsource. Likewise, a rapid freezing technique developed in Taiwan allows grouper producers to preserve the fish’s freshness. Hsu predicts some of that production capacity will shift to mainland China, taking space away from tilapia production. Groupers accounted for USD 166 million (EUR 131.9 million) of Taiwan’s USD 2 billion (EUR 1.6 billion) seafood exports in 2012, the last date for which there’s full data.

Ironically, a shift in Taiwanese enterprises to the mainland is proving the stiffest competition for Taiwanese exporters whose prices are on average 10 percent higher than mainland Chinese average prices, says Hsu. Yet Taiwan is well ahead on productivity: “Many years ago the typical market fish was a 300-gram tilapia, now it’s a 2-kilogram tilapia fish. With bigger fish you can do better filets and tilapia is also increasingly being used as sashimi.”

Taiwanese productivity gains may also be transferred to mainland China, helping to improve aquaculture output there. Increased labor costs prompted a shift to higher yields and automation in Taiwan and this trend will continue, said Hsu. “There is still a market for adding value in Taiwan in species like barramundi, eel, milkfish and even tilapia,” he said. Taiwan will remain a player and key supplier to the EU and United States, both in tilapia as well as higher-value species, Hsu predicted. “We can remain competitive,” he said.

Taiwan had a decade ago largely relied on tilapia (sometimes referred to as Taiwanese bream), eel and sea bass for sales to Western export markets. Taiwan has in recent years sought to increase the scale of its aquaculture sector through better productivity and new species since the island’s previous dependence on catch fisheries has come under pressure. Allegations of Taiwanese fishing firms using indentured labor from Cambodia on vessels overseas has also cast a shadow over the sector.

Taiwan is meanwhile struggling with its relationship to mainland China, which has in recent years been using improved trade links to wield economic influence over Taiwan, which it claims as part of its territory. While Taiwan benefits from low tariff access (under a 2010 agreement to increase trade) to the massive mainland market its own ability to make trade deals with regional partners is being curtailed by pressure from Beijing on potential partners.

Much of the tilapia industry that mushroomed in China's southern Fujian and Guangdong provinces in recent years was in many cases built with Taiwanese funds and expertise. Breeders and processors still active in mainland China include Zhang Zhou Hsien-Pin Frozen Foods Co., Ltd., and tilapia specialist Zhangzhou Changshan Chen Fong Food Co. Another firm, Maoming Changxing Foods Co., Ltd., distributes processed frozen seafood in Taiwan and, increasingly, on the mainland as retail and cold chains expand here. China is expected to surpass Japan as the largest market for Taiwan seafood later this year.


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