Mexico seafood firms attempt to go direct to China market

Published on
November 5, 2013

Chinese dominance of Mexico’s fishing industry might explain a relative absence of Mexican firms in the China market.

Cash-rich Chinese buyers have been muscling in on Mexico’s seafood industry by offering cash up front to Mexican fishing fleets, often via soft grants of millions of dollars to the local fishermen’s union, according to Raul Cortez, export sales executive at the Cortez Group, speaking to SeafoodSource in China.

“This [Chinese financial control] has made the lobster trade very difficult for domestic Mexican export firms like ours, we can’t compete, we can only perhaps play the spot market and offer fishermen a good price when they need a fresh infusion of cash,” said Cortez, who’s based in Baja California, Mexico. Chinese buyers in Mexico have been particularly eager to suck up lobster supply, said Cortez, though his firm has had more luck controlling the flow of geoduck and finfish.

Cortez’s company is one of a handful of Mexican firms seeking increased market share and margins by going directly to China to reach out to new and existing clients of its geoduck, yellow croaker and shrimp products. Cortez has so far this year imported 30 containers (weighing 27 tons each) into China — he expects the full year figure will be up significantly compared to last year. Much of that is made up of yellow croaker, for which there’s strong demand in China — previously much of the Cortez group’s croaker went to Chinese ethnic food service demand in the U.S.

Cortez has saved USD 50 (EUR 37) per ton by sidestepping a reliance on trading companies — his customers are largely wholesalers in mainland China. “Those guys are trading companies, they make a connection but they have no distribution capacity, they pass you on to a wholesaler…but now guys like me are going out and investigating the market in China directly a lot of those guys are disappearing.” He advises firms to go direct into China, as you miss a great deal of information flow and feedback from the customer by going via a trading company.

The geoduck market is a premium one for his firm but getting the product into China safe and sound is a challenge: the Chinese won’t tolerate a mortality rate above 3 percent, and that can be very hard to ensure. Meanwhile, the Chinese government’s clamp down on lavish banqueting put a 30 percent dent in geoduck demand, estimated Cortez “but there is still a healthy market.”

Cortez is currently shipping an average two tons of geoduck per week to China. He has also considered sourcing sea cucumbers, for which there’s much Chinese demand “but it’s not a market I know enough about.”

Domestic seafood consumption remains limited. Ironically Mexico depends on China and Vietnam to supply a Mexican preference for plain filets “that don’t smell of fish, often with a lot of sauce and bread on them,” explained Cortez.

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