Europe’s loss? Pakistan keys in on China

Published on
December 8, 2011

European buyers can’t compete with prices offered in China for cuttlefish and squid, according to Pakistani producers who say their priority has shifted from the EU market, which is still off limits, to China, where food-safety standards are less exacting. Brussels has so far refused to lift a ban on Pakistani seafood imports, in place since 2007, on hygiene grounds.

Iftikhar Zaidi, CEO of People Fisheries Ltd., based on the West Wharf, Karachi, says his firm shipped 400 40-foot containers last year to the Chinese ports of Fuzhou and Dalian and expects that figure to rise this year. Zaidi said China’s ability to pay USD 7 per kilogram for cuttlefish in 2011 and USD 3.5 per kilogram for squid are more than 25 percent the prices paid by EU customers.

“Our shipments of ribbon fish are up and croaker and sea bream are also in demand in China” he said.

Pakistani media in September reported that exports of seafood increased by 10.10 percent during July-August to USD 32.4 million, according to government data. In volume terms, the country shipped 13,468 tons of seafood in this two-month period, compared to 12,068 tons last year, a rise of 11.6 percent. Yet such growth may not be sustainable. While Pakistan has a limited domestic market, exports depend on a limited available natural catch.

Also based in Karachi, Omega Enterprises CEO Muhammad Omer Usmani said the shortage of wild fish will ultimately hurt Pakistan’s prospects. He blames depleting fish stocks in the country on the ineffectiveness of authorities in implementing a ban on nets during summer breeding months. “Ultimately we will have to depend on our aquaculture sector to grow export sales,” he said.

Seafood traders in Karachi see a solution in a roll-out of aquaculture. “We are trying to start aquaculture,” said Iftikhar Zaidi, who wants to see Pakistan tap Chinese expertise in this area. Significant bilateral aid from Beijing to Islamabad and Chinese investment in several Pakistani ports makes the prospect of maritime co-operation even more alluring. As a key political ally of Pakistan, China is an obvious source of export sales growth and skills.

A spokesperson for the Pakistani embassy in Beijing said that it is currently arranging for “purchasing groups” of Chinese officials and businesspeople to visit Pakistan in order to increase exports from Pakistan to its huge neighbor.

“Seafood will be one of those areas, but we have to examine how we can add more value in Pakistan before shipping the product to China,” said the spokesperson.

Fish stocks were declining by 15 percent every year, said Usmani, adding that future supplies are not guaranteed without a shift to aquaculture. “Factories are operating at only 20 percent of their capacity because of the decline in fish stocks,” he said.

Despite the EU ban Pakistani shrimp, exporters have found a ready market in Japan and Iran, according to Pakistan Fisheries Exporters Association Chairman Faisal Iftikhar. He said the United Arab Emirates and Indonesia are also promising new markets.

The EU in 2007 slapped a ban on Pakistani seafood imports due to lack of traceability records and appropriate cold-chain facilities. That meant Pakistan lost its top market, worth USD 50 million a year.

“But now we have China, and all our volume will be going there,” said Zaidi. “It will be Europe’s loss.”

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