Seafood trade flows have changed dramatically in recent years, according to Rabobank International Senior Industry Analyst Gorjan Nikolik.
Speaking at the North Atlantic Seafood Forum, Nikolik said China has transitioned from being the world’s biggest seafood exporter to becoming a net importer. That has elevated Norway to the top position after more than a decade in second place, but it may not hold on to the position for very long as Ecuador is firmly on course to overtake via the continued growth of its shrimp industry.
It’s possible the South American country could become the world’s biggest seafood exporter within the next seven years, Nikolik said.
In 2012, China was the world’s top exporter, followed by Norway, Thailand, and Chile. In 2017, China was still leading the way, followed by Norway, India, Chile, and Ecuador. But in 2022, with Chinese seafood exports having grown at a rate of 1.8 percent and its imports rising 10 percent, China became a net importer. Over the same 10-year period, Ecuador climbed from being the ninth-placed net exporter to second place.
“The whole world has changed in just a couple of years,” Nikolik said. “Norway has gone to number one, but I wonder whether by 2030, if Ecuador, with its shrimp and its volume-based growth, can go top. It has a long way to catch up but has a really good growth capacity.”
Although Norway’s trade is largely focused on farmed salmon and Ecuador’s is built on its shrimp production, Nikolik said there are strong similarities between the two, chiefly in that Ecuador is a small country, with a very small domestic market, and it offers the perfect climate for the species it’s producing. Ecuador’s export trade started by selling shrimp to the U.S. and E.U. markets, but it has become much more dependent on supplying China in recent times – today some 60 percent of its shrimp exports go to China. In the last two years, its overall shrimp exports have doubled in value from USD 3 billion (EUR 2.8 billion) to over USD 6 billion (EUR 5.6 billion).
“It’s had really impressive growth and there’s more to come because this country is absolutely not at its maximum production capacity,” Nikolik said.
While China is no longer a net exporter of seafood, it nevetheless remains the world’s-largest seafood exporter by volume. Nikolik told NASF he’s surprised by this – not least because it’s a market of 1.4 billion people that like to eat seafood. It also has relatively limited water and land resources per capita.
“I don’t find it amazing that Norway, Vietnam, Ecuador, Chile, or India are big exporters. These are unique countries with relatively [small] domestic markets, and are therefore natural exporters. But China is not a natural exporter. It’s stayed on top through a combination of government policy and aquaculture skills,” Nikolik said. “But things are changing with China. It’s joined the ranks of the other big economies. As for where it will go in the future, it’s getting an older population, and becoming more and more dependent on imports.”
Nikolik said shrimp and salmon have been the global seafood trade’s two big leaders, and that both have done “fantastically well” over the past two years – each recording sales above USD 25 billion (EUR 23.3 billion), having recovered strongly after the challenges brought by COVID.
Of the top-eight traded species, salmon and shrimp are the only two dominated by aquaculture, with the rest – marine and small pelagics, bivalves, groundfish, and tuna – all derived from wild-catch fisheries.
“These [fisheries products] don’t have a long-term growth path, while farmed salmon and shrimp do,” Nikolik said. The two could surpass the world trade value achieved by poultry and pork as soon as 2030, he added.
In volume terms, the poultry and pork trades equate to 130 million metric tons (MT) and 120 million MT, respectively.
“Pork alone creates one salmon industry per year by its [volume] growth alone, and yet in terms of trade value, the margin is much closer. I believe with these growth rates, salmon and shrimp will overtake poultry and pork. They won’t surpass the beef global trade anytime soon because that’s at USD 55 billion [EUR 51.3 billion], but I do believe they will be numbers two and three pretty soon,” Nikolik said.
Despite the growth trajectories, Nikolik pointed to signficant underlying differences between the shrimp and salmon trades. For shrimp, since 2019, the three biggest markets – the E.U., U.S., and China – have grown by around 30 percent in value and about 20 percent in volume.
“This means that approximately two-thirds of the growth is volume driven and only one-third is value-driven,” Nikolik said.
A decade ago, Thailand was the world’s shrimp superpower, with much of its trade targeted toward the United States. Today, though, India and Ecuador are leading the way as shrimp producers, with China as the primary buyer of their products.
However, India, which was leading global shrimp production two or three years ago off the back of phenomenal growth in the early 2010s, saw its growth slow by around 2018/2019, with the country also struggling to overcome challenges brought by the pandemic. India also remains focused on supplying the U.S. market due to its processing capabilities.
By comparison, salmon’s value growth across the big four salmon markets of the E.U., the U.S., China, and Japan is “quite substantial,” and this is being underpinned by high prices, he said.
In 2021, the value of salmon imported into the U.S. jumped 30 percent, China’s salmon imports increased by the same level.
“That’s phenomenal growth for such big importers,” Nikolik said. “But it’s all driven by prices.”
Photo courtesy of Jason Holland/SeafoodSource
