The American operations of Guolian Aquatic, China’s leading shrimp exporter and one of its biggest seafood firms, is forecasting a drop of 20 to 25 percent in its earnings from sales in the U.S. due to coronavirus.
But U.S. shrimp prices will be higher overall in 2020 than last year, according to Kevin Tang, head of California-based Sunnyvale Seafood, a Guolian subsidiary. Tang said current high demand from retailers and a shortage of workers is pushing the replacement cost of shrimp higher, even though “[demand from] foodservice is declining and expected to drop in demand throughout the year,” he told SeafoodSource.
Sourcing shrimp and other seafood in the U.S. for the Chinese market is increasingly a priority for Guolian after China recently dropped tariffs on some imported seafood, Tang said.
“We are working on it,” he said. “This is our focus all along, with huge Chinese demand for American product.”
Tang sees big demand for U.S. wild-caught shrimp from the Gulf of Mexico, which can be processed at Guolian’s four plants in China for the domestic market.
“We already have supply ready to go,” he said.
Orders for tilapia are picking up, in part due to a drop in tariffs for fillets sized 115 grams and smaller. Tang said he’s “not expecting much change” for import prices, but he expects a softening of sale prices with the lower tariff on the sub-115 gram product.
In both shrimp and tilapia, Guolian hasn’t been able to switch some of the product to retailers.
“We cannot switch to retail packs,” he said. “There is a high cost in repack[age], some items specifications are not accepted by retailers, and we only have a few retail repacking facilities certified to BAP standards in the country.”
Sunnyvale has noticed an increase in demand from U.S. consumers for in-home shrimp and tilapia products since the coronavirus hit the country and it subsequently went into lockdown.
“Demand is increasing from the retailers and it is expected that the trend towards more home-cooking will stay on after the crisis,” Tang said.
With its established supply chain, China still accounts for around 70 percent of American tilapia imports. Still, imports of Chinese tilapia decreased by 10.3 percent in volume and 17 percent in value in the period January to September 2019, partly due to a 25 percent tariff imposed by the U.S. government. The uncertainty caused by the U.S.-China trade war had pushed down prices both at the Chinese farm gate and U.S. import levels, but an interim “Phase One” trade deal between signed earlier this year has cooled tensions in the first part of 2020.
