Weak volumes, strong fish, shrimp prices in run up to Chinese New Year

Published on
February 5, 2015

Prices for fish and for shellfish have risen by 5 to 10 percent but prices for shrimp are up by as much as 50 percent in the past week as Chinese New Year approaches, according to seafood traders in several Chinese cities. Consumption of shrimp tends to peak during Chinese New Year as families spend on what’s seen as a premium festival treat, while frozen imported shrimp have become a favorite gift-box item.

With the festival this year falling on 19 February, demand for key species appears slower than in 2014 due to weaker economic growth but imported seafood as a percentage of overall supply has surged. A continued decline in domestic catches has forced the percentage of imported shrimp from 10 percent to 50 percent of overall supply over the past decade, according to Gao Guowen, distributor and vendor at the Rizhao central seafood market in Shandong province.Hitherto a key landing port for domestic Chinese shrimp, Rizhao has become a destination for imports with key supplying countries including Russia, Vietnam, India and the United States, claimed Gao. Wholesale pricing varies from CNY 15/500g (USD 2.40; EUR 2.11) for Indian shrimp while Vietnamese shrimp sells for CNY 18 (USD 2.88; EUR 2.53) per half kilogram (kg). What Gao terms U.S. shrimp (some of this may be Latin American transshipments) is seen as premium, explained Gao and is priced at CNY 50/500g (USD 8.01; EUR 7.04) at wholesale rates.

Wild-caught shrimp continues to command premium prices in China. There’s been solid, if less spectacular, price growth for domestically produced vannemei, which is up 10 percent month-on-month at an average CNY 60/500g (USD 9.61; EUR 8.46) this week in the Jingshen seafood wholesale market in Beijing, one of China’s key seafood markets for seafood price setting.

Weak output in Chinese shrimp production in 2014 means even if domestic Chinese consumption has weakened, prices remain high: Buyers of Chinese shrimp for export spoken to for this article said that suppliers in China are asking USD 5/kg (EUR 4.40) for head-on raw shrimp, whereas Thai counterparts are asking USD 4/kg (EUR 3.52). “The Chinese product is no longer a cheap one and this will add to the case for increased domestic sales in China and more imports [of shrimp] into China,” explained a Beijing-based European trader of shrimp and fish, who asked not to be named.

Shrimp aside, the Chinese New Year rush is also providing a boost to importers of crabs. Prices for crab have risen 20 percent on last year’s prices with what’s termed (female) blue crabs and brown crabs fetching CNY 108/500g (USD 17.30; EUR15.23) and equivalent male crabs selling at CNY 89.8/500g (USD 14.39; EUR 12.66) at north China wet markets, according to a sales executive at Sunkfa Co., a key seafood importer in Beijing and supplier to Jingshen market stall holders. These prices are almost double the rates recorded in the autumn period, notes the Sunkfa executive.

The three fish species most in demand for Chinese New Year banqueting continue to be turbot, pomfret and yellow croaker, while there’s also strong demand for grouper. Prices for turbot have risen from CNY 38/500g (USD 6.08; EUR5.35) to CNY 45/500g (USD 7.21; EUR 6.34) within the past week at the Jingshen wholesale market — according to stallholders — while Beijing and Tianjin outlets of Walmart, a leading retailer player in both cities, are this week quoting up to CNY 79.80/500g for fresh turbot, a considerable premium on normal rates.

While there’s been price growth in the run up to Chinese New Year, demand for premium species has been hit by China’s weaker economic growth and government crackdown on official corruption. “Our sales to high-end restaurants are down; officials are not going out to dine,” explained Landy Chow at Siam Canadian’s office in Guangzhou.

All eyes will be on the Chinese shrimp harvest, which begins towards the end of March. Prices may ease with a sound harvest would signal an end to recent trouble related to EMS and typhoon damage. The appreciation of the Chinese currency against the U.S. dollar (6.24 to the dollar on 3 February compared to 6.05 a year earlier) has meanwhile made Chinese shrimp producers less competitive, making domestic sales a more attractive option for local shrimp producers.

It’s worth noting that as China looks to imports to plug its demand for shrimp, there’s been a noticeable trend away from fresh product. More than half the stallholders at the Jingshen market sold only frozen product with vendors pointing to the increased rates of refrigerator ownership in Chinese homes, currently running at 80 percent, according to government statistics, as a driver of frozen (imported) shrimp sales.

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