China slams door on seafood imports from COVID-impacted countries

Published on
October 7, 2020

A letter from the Beijing Municipal Commerce Bureau to seafood trading companies has suggested they avoid importing products from countries with a high count of active coronavirus cases, the latest move by the Chinese government to shut the door on trading partners they deem a threat to national health and security.

Countries that may be affected by the move include India – whose exporters have already reported a significant custom slowdown – and the United States, which both have high case counts.

The letter, sent in late September to licensed import firms, notes that “Customs and local governments have repeatedly detected the coronavirus in imported cold chain food.”

Conor O’Sullivan, the China representative at Bord Bia, the Irish state’s food promotion board, told SeafoodSource the seafood market in China is being harmed by China’s hard line on imported seafood.

“Many restaurants and retailers have been very hesitant to buy and promote their use of imported seafood in this environment,” O’Sullivan said. “Consumers are being encouraged to cook their food all the way through, which particularly impacts demand for high-value products that would normally be eaten raw like oysters, sometimes langoustines.”

As an indication of how much imports into China have been hit, O’Sullivan said so far this year, Irish seafood exports to China [to the end of July] are estimated at EUR 9.4 million (USD 11 million) – down from EUR 33.2 million (USD 39 million) in the same period last year.

“Of all of our food export categories to China, seafood has been the most impacted by COVID,” O’Sullivan said. “That being said, after a big drop in June [due to the Beijing Xinfadi wholesale market outbreak], our July exports had recovered to the highest monthly value since COVID broke out. We have been able to organize offline events since June and have conducted a series of restaurant promotions to support Irish seafood across China since then.”

Recently, there has been a recovery in demand in China, O’Sullivan said, but the market still has a ways to go to reach its pre-coronavirus levels of demand.

“China’s foodservice industry has recovered to about 80 to 85 percent of normal revenues already, but it will take more time for it to fully recover,” he said.

The situation appears grimmer in Hong Kong, according to Chris Hanselman, the CEO of Pacific Rich Resources, an Asia-focused seafood importer and distributor.

There has been “a small take-up” in demand due to a return of students to universities, “but to be honest, I don’t think it is sustainable and it will revert to the normal lows,” he told SeafoodSource. “There are no real good signs and I can’t see anything picking up in the short-term. I was hoping we would see a slight pick-up at Christmas, then Chinese New Year and through to Easter, but with the fickle nature of COVID-19, that is questionable. It’s very tough. If you go on LinkedIn and other platforms, you will see that most of the providers are looking at new revenue streams. They have huge kitchens and need to make then into alternate revenue streams. Tough, but necessary.”

Even with restaurants reopened and more flights going into China – cancellations had made high-value live trade very difficult – the Chinese capital appears to be harder than the rest of the country to ship into. However, China remains an option for exporters at a time of rising coronavirus caseloads in mainland Europe, Des Moore of oyster purveyor Belle Isle told SeafoodSource.

“This week, I send 2,500 kilograms into Guangzhou and Shanghai. It’s not a lot, but we can build on that,” he said. “Beijing is ring-fenced for seafood products and that is a big drawback. The problem is that when things do move, there is always another health scare.”

With travel into China still restricted – due partly to COVID-related quarantines imposed on all travelers – freight costs remain exorbitantly high, Moore said.

“Logistics is a nightmare,” he said, though he noted Middle Eastern carriers Etihad and Qatar Airways are still flying into China. Their rates are only 10 to 20 percent higher than last year, whereas Emirates and other airlines are as much as 60 to 70 percent higher, according to Moore.

Moore said he believes that his business will remain sound if he can secure shipments of between 500 kilograms and one ton per week into China’s “big three cities – Beijing, Guangzhou, and Shanghai." He said he’s starting to believe a good traceability system may be key to holding onto his sales in China.

“Quality and attention to detail must be there at all times,” he said. “Our first boxes with QR codes were sent today on my oyster boxes. This will eliminate counterfeiting and show us information on our distribution. All is difficult, but possible. As imports of seafood increase steadily, I think [China] slowly could be a great market, but we are never fully sure what will happen next.”

Traceability has indeed become a touchstone for the seafood trade in the wake of COVID, as leading online retailer JD.com has guaranteed its customers “total traceability” of its seafood from processor to packaging and transport,” though the firm makes no mention of tracing the location of catch. JD.com promises that all its seafood items are tested with nucleic acid.

In much the same way, China’s restaurant trade may have swung to large operators with stronger systems.

“Chain restaurants will probably weather this stronger than independents,” Steven Kwok, an analyst at consumer-focused OC & C consultants, told SeafoodSource. He pointed to a recovery in the share price of Hong Kong-based dining chain Café de Coral, which has outlets across greater China.

For suppliers of imported seafood, the issues of cost and access may prove forbidding for some time to come, said Chris Hanselman, whose firm until recently did a strong trade with airline catering firms in China.

“Costs [have] become an issue, so forget better meals,” he said. “I would suggest they will become cheaper.”

On a flight from China to the U.K. two weeks ago, Hanselman said he was not impressed with the food offerings.

“COVID-19 was given as the reason, but the meals were pretty awful and very, very basic,” he said. “I see this as been cost-driven.”

Photo courtesy of x_carrot007/Shutterstock

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