China sees some demand pockets for seafood amid looming deflation

Ocean Treasure's staff posing in front of the company's logo.

Even as inflation remains persistent in Western economies, China may be entering a period of deflation due to weak consumer spending and dwindling demand for imports and exports both globally and locally.

China’s overall imports fell by 6.8 percent year-over-year in June, following a 4.5 percent decline in May. Exports dropped by an even more drastic 12.4 percent in value, according to data from China’s customs administration, but exports in H1 2023 rose 3.7 percent by value. Chinese factory gate prices for exports showed the fastest rate of deceleration since 2016.

While data signaling deflation and weak consumer demand is potentially bad news for seafood exporters, there are some pockets of demand in the country. Shanghai customs authorities reported a 41.9 percent rise in the value of seafood imported into the city’s ports in the first five months of 2023 compared to the same period of 2022. Imports in the period totaled CNY 10.9 billion (USD 1.52 billion, EUR 1.30 billion), with imports of king and snow crab totaling 1,500 metric tons (MT), a historical high.

The surge in Shanghai’s king crab imports appears to sync up with a broader jump in Sino-Russian seafood trading in 2023. China’s trade with its northern neighbor rose 41 percent year-over-year in the first five months of 2023, according to Chinese customs authorities. Russia had a USD 8 billion (EUR 7.1 billion) trade surplus with China, with total trade between the two amounting to USD 93.8 billion (EUR 83.4 billion) in the period.

Overall food prices in China rose

Photo courtesy of Ocean Treasure

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