A weaker domestic currency and shrinking demand in its home market are driving South African oyster producer Saldanha Bay Oyster Co. to diversify its export markets in the wake of disruption caused by the coronavirus.
Secondary markets in Asia have become targets for the company, according to the company’s farm manager, Hendri Endemann.
“Besides the quality of our oysters, the South African rand versus the U.S. dollar must make this a very favorable option,” Endemann said. “We have well-established relationships with multiple clients in mainland China, Hong Kong, and Taiwan currently and [we are] looking at expanding into Singapore and Malaysia.”
As a way to create a buffer from the volatility of Asian markets, Endemann said the company is looking at exporting to the United States as well.
“One of the markets we have identified and would like to gain entrance into is the U.S. market, as frozen mussels have already been exported successfully to the U.S.A.,” he said. “Even though there are greater growth opportunities in Asia, the high labor cost in the U.S. should allow us to compete on price-point with oysters produced locally in the U.S. This will allow us to diversify and not be completely dependent on just one or two regional markets. I can actually see demand picking up in Asia over the next couple of months, but currently it is highly volatile due to restaurant closures, flight availability, and freight cost.”
The South African local market traditionally absorbed between 55 and 65 percent of Saldahna’s annual production, but the firm has lost this market completely for seven weeks, as no restaurants were allowed to operate during the country’s lockdown to combat the coronavirus, Endemann told SeafoodSource.
“The export market has been slow in recovering and we have been operating at below 20 percent of historical maximum volumes since the airlines started operating in middle of April 2020. The preceding three months [we] had almost no export sales due to international lockdowns and flight restrictions,” Endemann said. “Currently, we have a strong working relationship with our freight agents, who are doing wonders in finding flights in these trying times.”
China has proven a growing market for oysters from around the world as oyster bars in Beijing and Shanghai have targeted a growing middle-class clientele. Yet a 7.5 percent year-on-year dip in retail sales in April and a fall in property prices are worrying signs for vendors of luxury goods in China.
