Indian exporters look past EU to China

Published on
November 7, 2011

Editor’s note: SeafoodSource Contributing Editor Mark Godfrey attended last week’s China Fisheries & Seafood Expo in Qingdao. Here’s his second in a series of reports from the 16th annual event.

India’s largest seafood exporter, in volume terms, to China sees a bright future for companies in Asia’s No. 2 seafood producer targeting growing Chinese demand. Ajit George, head of exports at Mumbai-based Sonia Fisheries and Marine Exports, said his firms shipped 300 28-ton containers into China in 2010, and he sees the country, his firm’s biggest market, growing in importance for Sonia.

“China accounts for 80 percent of our exports, while the EU takes 20 percent. A decade ago it was the reverse. Four years ago, China accounted for only half our exports,” said George.

Ribbonfish is the firm’s single largest category by volume, though the firm ships a dozen species, frozen, into China.

George said China’s acceptance of whole round fish — “We have 100 tons a day capacity at our factories and it’s better to do whole round,” he noted — compared to EU markets coupled with better payment terms (immediate, compared to 60 to 120 days in EU) make China a preferred destination for Sonia product.

Less penurious health and sanitary authorities is another advantage of China. “If you have a problem in one EU state you’re banned across the Schengen [European single transport zone] area. This is not a problem in China,” said George.

While the bulk of Sonia’s shipments are low-value ribbonfish headed to lower-income rural China, the prices have jumped dramatically. “Five years ago we were getting USD 0.80; now we getting USD 2.50,” explained George.

He expects to grow shipments to China by 25 percent in 2012 “at the expense of the EU market.” But while sales are rising, sourcing fish to feed the “huge volume” he sees in China will get harder. “The catch isn’t getting any bigger,” he said.

Other challenges George sees are the fluctuations in Chinese prices. “Every two to three days, prices fluctuate by 30 to 40 percent. In Europe, prices would typically fluctuate by 5 or 10 percent,” he said. He’s recently seen cuttlefish prices change USD 5 in one week, attributing that to rudimentary logistics systems connecting India to China.

“Sometimes all the containers from India will come in at once and then the prices drop suddenly,” he said. There are also seasonal factors: “After the Chinese new year festival [biggest of China’s traditional holidays, celebrated early each spring] the market will typically shrink 25 percent.”

Particularly, George sees increased Chinese demand for certain species from India, including kingfish, Indian mackerel and sardine. The company also sources cuttlefish from Yemen to satisfy Chinese demand. While the firm’s shipments are catch-based, Sonia plans to ship more farmed seafood in the future, said George.

He’s also seen a rise in shipments of pangasius and shrimp to satisfy the domestic market, and sees that partly as a novelty facilitated by India’s relatively recent embrace of supermarket retailing. “It might be that it comes in a nice bag from Vietnam,” he said.

Established in 1977, Sonia operates two factories in Taloja, an industrial zone outside Mumbai. Aside from frozen finfish, the firm also exports frozen block shrimp and frozen cephalopods. According to the Dehli-based Marine Exports Development Authority, a government body, India is the world’s No. 2 seafood exporter, after China, in volume terms.

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