A series of factors including tighter import supply and stricter environmental rules are combining with shifts in consumer choices to keep upward pressure on Chinese seafood prices, a Shanghai-based analyst of agricultural commodities told SeafoodSource.
Seafood prices have eased slightly in the country, but not because of falling pork prices, which often leads to protein substitution among Chinese consumers. Pork prices were elevated due to the swine flu epidemic, but a sharp fall in prices has done little to affect seafood prices, according to Darin Friedrichs, co-principal of research consultancy Sitonia Consulting, which focuses on the Chinese agriculture commodities markets.
“Seafood prices are likely to remain high. Some of this is due to structural changes in supply, the government has been stricter about environmental measures which has limited areas that can be used to raise aquaculture products,” he said. “Additionally, China continues to aggressively test imported seafood products for coronavirus. Health officials linked the most recent November COVID outbreak in Dalian to improper handling of imported seafood, so it’s unlikely those measures will ease soon. That means a combination of tighter supply for both domestic and imported products.”
The government measures are also coinciding with a shift in consumer eating habits in China.
“The broader shifts in consumer eating habits remain,” Friedrichs said. “Younger consumers are eating less pork and eating alternatives that they perceive as healthier.”
After a brief rally in October, pork prices have fallen since December “as consumer demand has normalized and over supply remains an issue in the market,” Friedrichs said.
Feed prices, as well, are high due to a number of factors, adding to the likelihood that seafood prices aren’t going to fall.
“Feed prices are high. Even after a record corn harvest, corn prices remain high. Wheat prices remain high. Soybean meal is also relatively expensive due to a combination of logistics issues and lower production in Brazil,” Friedrichs said. "Rapeseed meal is also a popular aquafeed, but rapeseed production could be lower this year due to high planting costs. Overall, seafood prices are off their highs, but remain elevated, and are likely to remain elevated.”
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