Competition, tighter inspections hurting China seafood exports 

Published on
June 18, 2014

Stricter inspection standards in key export markets as well as stronger competition from Vietnam are seriously hurting Chinese seafood exports, which fell in the first quarter of 2014, claims a key government quality and quarantine watchdog.

Shrinking export markets, “technical trade measures” and other issues facing China’s seafood exporters “cannot be ignored,” according to a recent article in the China Gateway (Zhongguo Guomen) newspaper published by General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ). The article points to Chinese Customs statistics which show that from January to April this year, China's exports of 1.14 million metric tons (MT) of aquatic products, worth USD 5.9 billion (EUR 4.4 billion), dropped by 5.9 percent and 3.3 percent respectively, year on year.

In the article AQSIQ — which promotes better quality in Chinese exports and oversees quarantine and quality of imports — points to newly-stricter inspection measures imposed by the U.S., EU, Russia, South Korea on China's exports of aquatic products. In particular, it points to new stricter inspection measures in Korea, which it says went into effect on 1 January. The AQSIQ article describes ten categories of “pharmaceutically active substances” being focused on by Korea, including nitrofurans, chloramphenicol, benzopyrene and malachite green.

The other big threat facing China seafood exports, as the AQSIQ sees it, is competition from Southeast Asia — in particular Vietnam.

The article states “the rapid development of aquaculture exports by Thailand and Vietnam and other Southeast Asian countries, is crowding out our market share,” and points to Vietnam official data for the first four months of this year showing Vietnam exported USD 22 billion (EUR 16 billion) worth of aquatic products, a year on year increase of 31.2 percent. “Exports to the U.S. rose 85 percent year on year to USD 547 million (EUR 403 million), accounting for 24.59 percent of Vietnam's total seafood exports…while exports to Japan increased by 19 percent and exports to South Korea grew 56.1 percent.” AQSIQ points to an ambitious target of Vietnam: to lift exports to USD 8 billion (EUR 6 billion) to USD 9 billion (EUR 6.6 billion) by 2020. “This will take some of our [China] market share.”

China also risks losing market share because its aquaculture costs continue to climb, due to rising labor and feed prices, according to the AQSIQ report. It singles out rises in the cost of fishmeal which it said rose by up to CNY 600 (USD 96, EUR 71) per MT so far this year, putting it at CNY 10,200 (USD 1,636/EUR 1,206) per ton of high-grade Peruvian fishmeal.

Interestingly, AQSIQ pointed to the lack of well-known domestic Chinese seafood brands and a need to do more value-add to keep more of the value in processed seafood exports in Chinese hands. What AQSIQ terms “deep processing” currently accounts for less than 30 percent of China’s processed exports. AQSIQ is advising firms to upgrade their processing equipment, improve self-regulation of antibiotics residues while also developing new export markets.

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