Change is afoot in China

Published on
May 31, 2011

Chinese seafood imports are set to soar, according to some of the country’s key importers.

“China in general is going to become a much larger importer of medium- to high-quality aquaculture products, particularly marine fish,” said Lukas Manomaitis, who runs Bangkok-based Seafood Consulting Associates.

Manomaitis expects demand from China to ramp up fast because of unsustainable local supply. He said the Chinese marine cage aquaculture industry is in danger of imploding through excessive densities of cage farms as well as an increasing focus in China’s coastal regions on tourism.

Chinese seafood imports increased from USD 3.9 billion in 2009 to nearly USD 5 billion in 2010, according to Scott Brown, whose Shanghai-based advisory firm Redfern guides the New Zealand government and seafood industry on seafood consumption patterns in China. Figures from the Food and Agriculture Organization suggest Chinese seafood consumption will climb from the current 12 kilograms per person to 36 kilograms in 2020.

The emergence of Western fast-food and supermarket chains like Walmart have been key to a new acceptance of frozen seafood products in China, facilitating importers through their national reach. Frozen seafood sales had previously been restricted by the lack of widespread ownership of freezers in Chinese households and the common habit of buying fresh product on a daily basis, explained Matthew Crabbe, managing director at Shanghai-based market research agency Access Asia, which produces an annual report on China’s frozen seafood market.

China’s three key categories of imports are high-end lobsters and oysters, fishmeal and lower-value fish for processing and re-export. However, Brown said imports for reprocessing have declined 10 percent in value terms in 2009-10, while seafood imports for local consumption have climbed by a similar figure. Among China’s top import sources, Russia is ahead of the United States by a long shot, with Norway and Japan following. Importers in the seafood hub Qingdao say Russia will remain the supplier of choice though local processors Qingdao Hongfu and Qingdao Yilufa. Both process Alaska Pollock, Canadian salmon and Russian cod, hake and halibut.  

Key seafood products from Canada include Dungeness crab, oysters and lobsters. Australia, meanwhile, ships abalone and crab, while New Zealand sells lobster, mussels and abalone to China. Brown said suppliers from New Zealand remain dependent on high-end retail and restaurants for sales but are also building relations with processors. The country shipped USD 74 million worth of frozen seafood, mostly to high-end outlets, with USD 9.7 million of squid and almost USD 2 million of mussels.

Less hung up on third-party certification as it’s U.S. and EU counterparts, China is a promising market for regional producers as well as exporters like New Zealand, Canada and South Africa.

“Southeast Asia will benefit, if it can develop the industry,” because of proximity to China and it’s natural coastline, said Manomaitis. “We just hope that they will not follow the Chinese model of production and make the same mistakes.”

Manomaitis noted that China is an attractive market because “unlike the U.S., EU and other locations that may want a certified product, the Chinese typically don’t ask for such certifications from third-party organizations such as the Aquaculture Certification Council, Global Aquaculture Alliance and World Wildlife Fund etcetera. This is an advantage when shipping to China because these certification programs cost money and time. And since the certification programs are not harmonized, it can be that one producer has to join several certification programs to ship to different locations.”

In China, seafood news has been dominated by scares over the safety of imports form Japan in the wake of the earthquake, tsunami and nuclear fall-out. While stressing that no Japanese product was being served, a duty manager surnamed Gao at the Cantonese-style Ah Yat Abalone in Beijing’s trendy Sanlitun area said his current most popular dish is South African abalone and red leopard coral grouper imported from Indonesia.

Alaska cod is the current top-selling import at Shun Feng, another high-end Beijing seafood restaurant. Management at Shun Feng imports salmon and cod from Canada and abalone and lobsters from South African.

While restaurant sales are invaluable, Crabbe said the expansion of foreign supermarket chains like Walmart, Carrefour and Tesco offers a beachhead to seafood importers who have thus concentrated on international hotel chains and restaurants.

China’s seafood market remains very regional, according to Access Asia — the bulk of imports are consumed along the wealthier east coast, while growing inland cities like Chongqing and far-west Urumqi rely largely on local freshwater product.

Contributing Editor reporting from Beijing, China

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