China’s exports of this seafood taking hits

Published on
August 24, 2015

China’s top shrimp processing and trading hub has warned that neighboring countries are eating into China’s overseas seafood market and has blasted what it terms a wave of protectionism by key western exports markets.

“In recent years … China’s neighbors have become more competitive: their aquaculture technology has become more sophisticated, their production costs are low ...” warns a document distributed to seafood firms by the Zhanjiang office of the General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ), which is a government agency tasked with policing quality control of exports.

According to the AQSIQ the city shipped 39,800 metric tons (MT) of aquatic products worth USD 275 million (EUR 242.3 million) in the first half of 2015. No comparative data is offered from last year but the “export situation is not optimistic,” the AQSIQ warned: “In the first six months of this year foreign market orders plummeted, prices are low … and continue to decline … there’s been a further rise of trade protectionism, an endless stream of foreign technical barriers to trade ...”

“Dumping” by regional competitors on international markets has created “fierce competition” for Chinese exporters in export markets. The Zhanjiang AQSIQ document however does also blame overcapacity and “disorderly” competition between Chinese seafood companies for some of the country’s woes.

Along with “sluggish demand” in international markets the AQSIQ blames the “continued appreciation of the RMB against non-U.S. currencies,” as well as “labor cost increases.” The AQSIQ offers some familiar advice to exporters, suggesting they pay more attention to currency hedging, take a more nimble approach to orders – including fast fulfilment of small orders – and pay closer attention to new technical specifications set by major export markets.

The gloom isn’t confined to Zhanjiang. Customs data shows the province of Liaoning booked 827,000 MT of foreign trade in the first half, valued at USD 1.9 billion (EUR 1.7 billion), down 2.6 percent and 4 percent, respectively. Exports at 360,000 MT were worth USD 1.24 billion (EUR 1.1 billion) – down 1.3 percent and 5.8 percent. Imports totaled 467,000 MT worth USD 699 million (EUR 616.1 million) – down 4.5 percent and 4.1 percent. Liaoning is a significant processing center with the port city of Dalian a leading shipper of processed cod and haddock for western markets.

Meanwhile there’s an interesting contrast in data from a leading region for the production of freshwater aquaculture for the domestic market. Hubei claims its aquaculture sector output was worth USD 106.8 billion (EUR 94.1 billion) in the first half of this year – a year-on-year increase of 17 percent. Tonnage was up 5.2 percent to 2.2 million MT. Hubei has seen a big rise in production of freshwater fish and crabs over the past decade.

Local officials are claiming the data represents a vindication of policies to keep the supply of land to aquaculture stable and likewise keeping prices of seafood stable in local markets: seedling value at CNY 5.3 billion (USD 829.6 million, EUR 731.3 million) represents an increase of 8.4 percent but an average price of CNY 13.07 (USD 2.04, EUR 1.80)/kg is flat on last year.

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