Seafood prices up, output down in China

Published on
September 21, 2016

China’s latest fisheries statistics are suggesting steady growth in prices, while the country's seafood output continues to slow.

China’s production of seafood totaled 27.8 million tons in the first half of the year, up 3.03 percent year-on-year, down from the 3.20 growth figure seen in the same period last year, according to data from Beijing. The proportion of production from aquaculture at 21.9 million tons rose 3.7 percent on the same period last year. The proportion from caught fisheries rose 0.5 percent to 5.8 million tons.

There’s been a recovery in trade after a “very slow” first quarter, according to the ministry of China, with exports of 1.96 million tons worth USD 9.9 billion (EUR 8.9 billion) – up 3.9 percent and 0.48 percent respectively. Imports at 1.97 were worth USD 4.3 billion (3.9 billion) in the first six months of the year. However it should be noted that the import data is compared with a low base – imports fell 14.8 percent and 9.57 percent in volume and value terms in the first half of 2015, with lower prices and demand for fishmeal (counted in the customs’ imports category) due to over-stocking a key reason for the last year’s fall.

Retail pricing data for agricultural commodities and fisheries for suggests that consumer prices for seafood continue to outpace any growth in production. Average seafood prices for the first eight months of the year rose by 5.4 percent year on year in August, according to data compiled by the National Bureau of Statistics, while prices were up 4.3 percent for the first eight years on the same period last year.

Seafood pricing has held up much better than pricing for two red meats, which are traditionally premium purchases in China: the price of beef was flat year on year both for August and the first eight months, while lamb prices at the retail level are down 5.7 percent and 6.6 percent in August and in the first eight months on a year-on-year basis. A huge jump in pork prices, however (up 23.4 percent in the first eight months year on year), due to a cyclical supply shortage, will help make seafood looking more competitive in the supermarket and wet market aisles.

Traditionally, the rise in China’s seafood prices has been well above national consumer price inflation. Chinese average retail prices for seafood rose by over 5 percent per year between 2001 and 2012, but the figure was as high as 8 percent in the period 2010-2012.

Importantly, growth in prices has also outstripped growth in output of seafood by some margin. The average annual growth in seafood output between 2000 and 2011 averaged 3.8 percent, which represented a significant drop off in growth of output in 1990 to 2000, which averaged 6 percent, according to CAAS.

Judging by the latest data growth in Chinese seafood, output is now trending towards 3 percent. Overall the data would suggest a narrowing of growth in output and a parallel growth in pricing driven by growth in demand.

Income growth is propelling Chinese demand for seafood. Average incomes in China will go from USD 6,291 (EUR 5,630) in 2012 to USD 10,791 (EUR 9,672) in 2017 and USD 32,682 (EUR 29,294) in 2030, according to the Economist Intelligence Unit (EIU).

Given that China’s top 10 percent income bracket consumes seven times more shrimp than the lowest 10 percent, consumption is likely to grow amongst China’s middle class as it accumulates more wealth, according to research by the Chinese Academy of Agricultural Sciences (CAAS) into the elasticity of seafood spending by China’s consumers.

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