This year’s autumn holiday season in China, which has historically involved elevated levels of seafood demand, is acting as a harbinger for seafood exporters considering whether to resume shipments to one of the world’s largest importing nations, with most hoping that inconsistent Chinese demand will stabilize in the near future.
“I believe that we are moving good volumes at the moment for the national holiday coming up in China,” Geoff Irvine, executive director of the Canadian Lobster Council, said prior to the holiday season.
Nonetheless, he cautioned that “there is concern about the overall economic situation in China and that is seen through the prices they [Chinese importers] will pay – which are low – but the product continues to move.”
China, the top market for Canadian live lobsters, bought 17.7 million metric tons (MT) of lobsters in the first seven months of 2023, compared to 23.1 million MT all of last year and 26.2 million MT in 2019, prior to Covid-19 affecting the market.
“The market in China doesn’t seem or sound as depressed as I [see] in most Western-based media articles,” Singapore-based seafood trader Wiun Chong Tan said, noting the large attendance of Chinese firms at this year’s Seafood Expo Asia in Singapore.
“Many Chinese companies are very eager to get out; they are aggressively attending exhibitions and making travel plans out of their country to meet their customers or suppliers,” Chong Tan said.
Chinese seafood firms, even amid economic turbulence, are keen to lock up export markets that can help them secure the product needed to corner the convenience market that is taking off in the country, Chong Tan said.
Additionally, a hole in the production market opened after China banned all Japanese seafood products following the release of treated cooling water from the Fukushima Daiichi Power Plant. Though this has left a void that both foreign and domestic seafood producers are looking to fill, some export markets to China remain depressed in their performance.
Irish seafood exports to China, for example, fell 40 percent in the first half of 2023 compared to the same period last year, when they totaled EUR 11.5 million (USD 12 million).
Irish oyster exporter Des Moore, head of County Donegal, Ireland-based oyster-farming company Bells Isle Oysters, is shipping again to China after solely focusing on European markets during the pandemic.
“I am back in Shanghai with two good customers since late May … [with] a range of sizes Grade 0 to Grade 5 … [moving] about 15,000 oysters a week,” he told SeafoodSource.
Although he has returned to the area, Moore understands why others are holding off.
“I don’t see many others returning [to China],” he said. “In October 2021, China was essentially impossible to service due to Covid leaving many suppliers overloaded with big oysters and no market. Nobody will [risk] that again.”
Moore highlighted how the process of shipping to China has gotten more complex, leaving some exporters wary of entangling themselves in the red tape attached to doing business in the area.
“Chinese sanitary authorities have done a comprehensive video link question session with every packing unit in Ireland followed by a comprehensive application process to attain a five-year access permit,” he said. “Many just gave up on the idea of reentering the Chinese market [entirely].”
Speaking from Beijing, Didier Boon, the head of the trading firm East China Seas, is also gloomy about the seafood market and the Chinese economy as a whole.
Boon said the bad press surrounding the Chinese economy has dampened consumer confidence and that Western political pushback against China has turned Chinese consumers against Western products.
“[Chinese consumers] are less and less willing to buy from places they feel are opposed to China,” he said.
China’s currency has depreciated more than 8 percent against the U.S. dollar since its peak in January came on the heels of the country’s reopening from zero-Covid policies. The weakened currency is, in part, due to foreign investors holding off on purchasing Chinese stock or stalling investments due to weak demand and geopolitical tensions.
As the Chinese currency has weakened, air and ocean freight rates for Chinese routes have fallen to below pre-Covid levels, and “trade has been fluctuating – more consistent over the last couple of months – and freight levels are returning,” Gary Wilcox, CEO of freight JAG UFS Group, which has offices in China, told SeafoodSource.
“What I have noticed is that customers are buying smaller orders but more frequently, rather than stockpiling on bigger orders,” Wilcox said. “I think this is due to nervousness in the market and not wanting to be left with large amounts of stock that aren’t selling, so in that respect, the trends have shifted to this model.”
On the high seas, “shipping lines are scrapping for business as vessels are not at full capacity,” he said, underscoring the tenuous nature under which exporters shipping their products to China are operating.
Photo courtesy of fukoton/Shutterstock
