COVID-19 has scrambled China’s aquafeed sector markets, with domestic market now a primary focus
China’s domestic aquaculture sector is shifting its production focus to a later harvest in order to supply rising demand from within the country, according to a leading Chinese supplier of fishmeal and fish oil.
A fishmeal trader with an IFFO-certified fish oil refining plant, Fujian High Fortune Bio-Tech Group also has a GMP plant for omega-3 related products and healthcare industry production. Its clients are in the human consumption and health care industries, in addition to animal and aquafeed production and the pet food industry.
Mounting logistical difficulties confronting seafood importers have also contributed to a company-wide shift to a focus on the domestic market, according to Janni Zhong, director of the overseas business division at Fujian High Fortune Bio-Tech. A decrease in the country’s seafood exports further accelerated the move, she said.
“There has been a significant decrease of the volume exported from China, not only because of the decrease in external demands, but also because many suppliers are suffering from logistical challenges,” she told SeafoodSource. “Chinese consumers are worried about imported fishery products carrying [corona]virus. Thus, the demand for imported fishery products dropped, which has allowed domestic demands for domestically farmed fishery products to rise. However, since the volume exported has dropped, I would say the demand for our fish oil and fishmeal from our aquaculture feed clients did not increase much. Also, it does seem that the peak season of aquaculture has been delayed from May to July and August.”
Demand abroad for China’s fishmeal and fish oil exports – among them, products High Fortune creates – has “shrunk dramatically,” but domestic demand remains high, Zhong said.
“Especially from industries such as the aquaculture feed industry, from which the products are consumed for basic needs,” she said.
High Fortune’s salmon-farming clients in South America have decreased production through the COVID-19 situation, while eel-producing clients in China have diverted supply from export markets like Japan and the U.S., as eels are bringing in more money in China than previously, Zhong said.
“Due to the logistic challenges and rising costs, also due to the Chinese consumers’ doubts about imported fishery products containing [COVID-19], the eel farmers have focused more on our domestic market,” she said. “Recently, with the promotion of domestic consumption for eel, there seems to be a price increase. However, the overall production does not seem to increase by much. The reason for the price increase may be that overseas consumers prefer a certain standard or smaller size of eel, thus the larger-sized eel were cheaper [in the past]. But as domestic clients do not show strong preferences toward any particular standard, thus the originally larger-sized eel price has increased.”
However, rising freight costs continue to jolt the industry, Zhong said.
“There are definitely logistical challenges such as lack of equipment, delayed shipments, and lack of vessel space – ocean freight and other charges also increased radically. For instance, the ocean freight for one of the destinations that we often exported to has increased fivefold, not to mention that for a period of time it was very hard to obtain vessel space or containers, even when we agreed to very high ocean freight,” Zhong said.
Photo courtesy of Fujian High Fortune Bio-Tech Group