China seafood sales helped by bird flu fears
Seafood consumption in China has been boosted by fears over poultry as bird flu continues to claim local lives.
On its Chinese language website, JRJ.com, a website owned by U.S.-based International Data Group — providing financial information to Chinese customers — said that Zhanjiang Guolian Aquatic Product, Kaichuang Marine, Oriental Ocean and Zhangzi Island are all benefiting from the bird flu fears gripping China’s cities. Stock prices of the firms rose by 5.97 percent, 5.05 percent, 2.96 percent, 2.93 percent, respectively on 9 April. JRJ claims that seafood sales across China increased 15 percent week-over-week last week, “and will continue increasing.” According to JRJ prices of grass carp, crucian and chub rose between 22 percent to 30 percent in the first ten days of April.
The JRJ report adds: “Because of bird flu, people start to eat seafood instead of chicken, duck and doves. Several poultry markets have stopped doing business…and even frozen poultry meat are seldom asked for. At the same time, the seafood markets are starting to bloom, the prices of the fish raises day after day...”
Investors in Guolian will be further cheered by the firm’s release of the forecast of its first quarter results. The shrimp and processing specialist is predicting a total net loss of CNY 5 million (USD 807,000; EUR 616,000) to CNY 9.5 million (USD 1.5 million, EUR 1.2 million). That would be an improvement on the same period last year when the firm lost CNY 29.53 million (USD 4.8 million, EUR 3.6 million).
With nine people in China so far dead from H7N9, this year's strain of bird flu, Chinese users of social media (in particular the Weibo microblog) have been feverishly swapping advice on eating and medicines. Guolian Aquatic Products’ stock price Friday at CNY 5.07 is a slight improvement on CNY 4.82 (USD 0.78, EUR 0.59) on 3 April but still down on a 52-week high of CNY 6.53 (USD 1.05, EUR 0.80). By contrast Yum Brands predicted a “significant, negative impact” from bird flu on sales at KFC stores in China in April.
At the official level, the prospects for seafood prices look particularly good for 2013. The Chinese Academy of Social Sciences, an influential government think tank in its annual “Green Book of Rural Area: Analysis and Forecast on China's Rural Economy (2012-2013)” this week predicted prices for aquatic products will rise 11 percent, eclipsing the overall average year-over-year rise predicted for agriculture products, which the Academy claims will rise 8 percent on the back of higher consumer spending.