Mixed signals jumble outlook for China’s seafood market

Published on
June 29, 2021

China’s seafood market has been a jumble of mixed signals, with import volumes recovering but prices remaining soft.

In a recent financial update, Singapore-based high-end seafood restaurant chain Jumbo Seafood announced its intention to open more restaurants in China, after posting a strong performance in mainland China in the first five months of 2021. The company currently operates restaurants in five Chinese cities, but had pulled back from expansion in China due to the COVID-19 pandemic.

Separately, the Norwegian Seafood Council reported Norway had exported 13,045 metric tons (MT) of fresh salmon to China in the first 24 weeks of 2021, a 31 percent year-over-year increase. Norway exported 11,544 MT of salmon to China through May, a volume growth of 20 percent, but growth in value was lower, at 15 percent. Average prices for Norwegian fresh salmon dropped six percent year-on-year through the first 24 weeks of this year.

China’s salmon market is “still recovering,” according to Victoria Braathen, head of the NSC’s China office.

“When it comes to supply and prices, several factors come to play. China is also a market with preference for larger-sized salmon and during the year availability will vary,” Braathen told SeafoodSource.

According to China Customs, China’s imports of fresh salmon decreased by 9 percent year-on-year in 2020 to 20,865 MT, from 22,921 MT in 2020. Fresh salmon accounts for 96 percent of salmon imports, compared to 77 percent in 2020. Norway accounts for 56 percent of the Chinese fresh salmon market, followed by Chile with a 14 percent share. However, Braathen said as China emerges from the pandemic, Norwegian salmon suppliers expect to find new sources of demand there.

“We are continuing to seek new opportunities that in turn will offer more diversified salmon products to end-users and consumers,” she said. “The summer season is typically a strong season for fresh salmon consumption. We foresee that the market recovery will continue.”

Rabobank Senior Global Seafood Analyst Gorjan Nikolik said the soft Chinese pricing data should be received in the context of last year’s fall in the market.

“Export volumes to China were impacted in the first half of 2020, but the real issues started with the discovery of COVID-19 on the salmon chopping board [in a Beijing wholesale market last June],” he told SeafoodSource.

This and other links drawn in China of COVID-19 carried on imported seafood packaging impacted figures for the second half of 2020 and especially in Q4, when imports fell 50 percent year-on-year, according to Nikolik, who also pointed to a 25 percent year-over-year drop in Chinese seafood imports in the first quarter of 2021.

“Even in Q2, we still see a big impact,” he told SeafoodSource.

Nikolik said Rabobank is expecting strong price growth in prices for key seafood species like salmon in the second half of 2021 – in both China and Europe – after a soft first half of the year.  

“COVID only had an impact on prices in Europe in a material way starting in June, due to low volume growth for the first half of the year,” he said. “As volume was shifted to the second half, it then created a price crash in the fourth quarter of 2020. So expect 2021 prices to be lower in the first half compared to 2020 and much higher in the second half of 2021.”

China’s imports are recovering but from a low point, according to Nikolik.

“I do expect once we reach the fourth quarter of 2021, we will see an increase, but that is because the fourth quarter of 2020 was so low in terms of volumes,” he said.

The total volume of seafood sold in China last year actually decreased, according to Euromonitor International Senior Communications Executive Louise Pang. A big increase in retail volume sales was not enough to compensate declines in sales of seafood through foodservice, which accounted for around 60 percent of fish and seafood sales in China in 2019, Euromonitor reported.

“Retail volume increased from 12.5 million MT to 15.9 million MT in volume terms but foodservice decreased a lot for fresh fish and seafood,” Pang, who works in the research firm’s China office, told SeafoodSource.

The continued recovery of the foodservice sector will be the key driver in China’s 2021 seafood market sales, Pang said. But lingering concerns among Chinese consumers over imported seafood carrying COVID-19 could hinder a recovery of the market, a research paper published by the consultancy’s China team found.

“Moreover, significant economic fallout from the pandemic is set to dampen disposable incomes, meaning fewer people are likely to be able to afford to dine out as often as they did prior to the pandemic,” the paper reported.

However, the rise in cooking at home – behavior that emerged during China’s extended lockdowns –  could prove a longer-lasting trend, helping to sustain stronger retail volume growth, Euromonitor found.

Des Moore, the director of Ireland-based oyster exporter Bells Isle, which ships Irish oysters to China under the Unique and Bells Isle Oysters brands, said his business experiencing steady demand and increasing prices. But COVID-related port closures, most recently in Guangdong, have made logistics “not only erratic but more expensive,” Moore said.

But Europe’s reopening and continuing logistical difficulties are likely to drive prices further upwards, Moore said, along with a cooler spring and early summer in northern Europe that Moore predicted will tighten the supply of the large-sized (120 grams or more) French and Irish oysters highly sought-after by Chinese buyers.

“Considering air cargo prices, cargo boxes, wooden boxes, ice-packs [are] all increasing in price, coupled with a probable fall-off in large oysters, I can only see the price in China going up and up,” he told SeafoodSource.

With the European market now “brisk” after a hiatus, Moore sees a lot of growers in Ireland and France who “prefer to sell the smaller sizes in mainland Europe rather than concentrating on the undoubted large market in China.”

Photo courtesy of estherpoon/Shutterstock

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