Ecuadorian seafood companies were in China last week courting new buyers in a new push for the China market, which could squeeze western buyers out of Ecuadorian supply lines.
A trade fair in a Beijing hotel on 7 January facilitated one-on-one meetings between 30 Ecuadoran companies and Chinese counterparts, according to the Ecuador embassy in Beijing and the China Aquatic Products Processing & Marketing Association (CAPPMA), a trade body. The companies were selling refrigerated fish and prawns as well as tuna and fish oil and fishmeal, according to an introduction to the conference provided in Mandarin to Chinese buyers.
With exports of shrimp to China up by a massive 104 percent year-on-year in the first four months of 2014 (according to data from Ecuador’s trade office in China) the companies travelled to Beijing in a trade delegation with Ecuador President Rafael Correa — a visit with an added urgency given the country’s export revenues are suffering from falling prices for oil, a key export.
Among the firms visiting China with the president were major shrimp suppliers Omarsa SA and Pacfish SA. Meanwhile, representatives from the Ecuadorian Shrimp Producers Association expressed frustration over the continued overreliance on shipments through Vietnam in meetings with counterparts from CAPPMA. High Chinese taxes mean more than half of Ecuadorian shrimp is landed in Vietnam and then trucked over the border into China.
While non-oil (China is a key market for Ecuadorian oil) exports totaled USD 374 million (EUR 316.5 million) in 2014, exports of shrimp to China are worth as much as USD 500 million (EUR 423 million) in 2014, estimated Victor Jurado, an executive at PRO Ecuador, the state body promoting exports.
Ecuador officials have been lobbying Beijing to lower the taxes or sign a free trade deal with that could increase food and fishery exports to China, which has sway over Ecuador because of huge loans. On his visit, President Correa signed USD 7.5 billion (EUR 6.34 billion) in new low-interest deals with Chinese state owned banks bringing to USD 12 billion (EUR 10.1 billion) the long-term credit lines to Ecuador over the past six years. The Chinese government has gathered Latin American leaders to Beijing this week for an inaugural China-Latin America annual summit, which will see Latino leaders discuss economic cooperation with their Chinese counterparts.
It remains to be seen if Ecuador can use those talks to get a reduction in shrimp duties or a free trade agreement from Beijing. Argentina is also a major supplier of seafood to China while Venezuela — another close Beijing ally — is an increasingly important shrimp exporter to the China market.
Exporters to China face an uncertain year, meanwhile, given weakening in economic growth here. Inflation fell to a five-year low in December at 1.5 percent, suggesting persistent weakness in the Chinese economy, just as manufacturing activity slowed and the housing market softened. China’s GDP growth will slow to 7.1 percent in 2015, according to well-known central bank economist Ma Jun.
