Exports from China's key processing hub weaken in 2015

Published on
January 7, 2016

Exports from China’s primary seafood processing region sagged in 2015 with a slump in frozen filet shipments and improved EU purchases cancelled out by softer demand from Japan which devalued the Yen. Exports from the port city and leading processing hub of Dalian in the first 11 months of 2015 totalled 625,000 tons, down 4.2 percent on the same period last year according to local customs documents. In value terms exports were worth CNY 14.98 billion yuan, down 2.3 percent. However the average export price of CNY 24,000 per ton rose 1.9 percent.

Export data for Dalian tallies with data for the province of which the city is part: seafood shipments from Liaoning province at 653,000 tons and USD 2.435 billion fell by 3.7 percent and 4.8 percent, respectively, on the first 11 months of 2014. Imports of seafood at 810,000 tons were worth USD 1.356 billion, down 7.3 percent and 4.5 percent, respectively.

Exports from Dalian’s processing factories at 332,000 tons fell 6.2 percent, accounting for 53.1 percent of total exports whereas non-processed (classed as ‘general trade’) seafood exports at 203,000 tons, decreased by 8.4 percent, accounting for 32.4 percent of overall exports.

A slow-down in demand from Dalian’s main export markets seems to be sharpest in Asia, with depreciation of Japan’s currency appearing a problem. Exports to Japan at 112,000 tons fell by 6.8 percent whereas exports to the EU rose 7.6 percent year on year to 106,000 tons. Exports to South Korea at 105,000 tons were down 9.7 percent while US-bound exports at 103,000 tons dropped by 3.7 percent on the same period last year.

The signs look ominous for China’s seafood processing sector, which has been slowing for some time. According to the latest customs data for Dalian there has been a decrease in frozen filets which dropped five percent to a still-substantial 369,000 tons (nearly 70 percent of overall shipments). The “low-tech” and “low-scale” nature of some 178 local processing firms licensed to export is blamed by Dalian fishery authorities in a bleak assessment of the outlook for the sector. The local Ocean and Fisheries Bureau points to persistent problems with antibiotics residues in local aquaculture products while “low ecological consciousness” and a poor record on innovation are restricting the ability of firms to come up with new, higher-value products for export.

Ongoing reform of China’s state sector – with firms backing out of non-core businesses – appears to be taking effect. State-owned enterprises exported 65,000 tons of seafood from Dalian in the first 11 months of 2015, down 48.5 percent and accounting for 10.5 percent of overall shipments whereas private firms shipped 398,000 tons, an increase of 8.8 percent and accounting for 63.7 percent of total exports of seafood through Dalian. Interestingly, foreign-invested enterprises exported 161,000 tons, an increase of 1.4 percent, accounting 25.8 of volumes shipped.

Dalian authorities are also blaming weak global economic growth for weaker export demand. But they’re also pointing to increased competition from Vietnam: lower labour costs and membership of the Trans Pacific Partnership and the Association of South East Asian Nations (ASEAN) give the country “competitive advantages” over Chinese seafood exporters, notes a document from the Dalian Ocean and Fisheries Bureau.

Dalian exports fluctuated sharply over the 11 month period last year, with January exports of 78,000 tons the highest monthly figure since February 2014. Exports fell to 4.4 million tonnes in March., since March 2014 Dalian Customs District water seafood in a single month export lowest point. November exports at 60,000 tons were down 21.4 percent year on year but up 12 percent on October. The average price of 26,000 yuan per ton rose 12.4 percent year on year but down 6.7 percent month-on-month.

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