China’s seafood consumption already accounts for between 30 and 40 percent of the global supply – more than North America, Latin America and Europe combined, and the country is also on course to become the largest importing nation, claims a new report from Rabobank. The Dutch multinational banking company anticipates that from this prominent position, China will drive the demand for seafood not just domestically, but across the world.
RaboResearch Food & Agribusiness’s “Riding New Waves of Change in Aquaculture” analysis explains that with a relatively low endowment of land and grains per capita, China could not rank among the most competitive producers of land-based animal protein. Instead, to feed a large population, Chinese farmers have historically focused on aquaculture, especially species such as carp and mussels – proteins produced with limited or no feed as input.
Today, the country accounts for 62 percent of global aquaculture production, making it the undisputed global leader.
Compiled by Gorjan Nikolik, Rabobank’s senior analyst – seafood, the report further highlights that combined with a competitive seafood-processing industry, China has not only been able to feed its own population with a per capita supply of seafood similar to that of the EU or the United States, but also became the world’s leading exporter of seafood, exporting over USD 20 billion (EUR 16.2 billion) worth of marine products per year.
However, the strong growth of supply of seafood from China over the past two decades is unlikely to continue, it said. Large surface areas of clean fresh water and coastal marine water are increasingly difficult to find in China.
Besides suitable water areas, labor is also becoming scarcer and expensive. In 2015, China reached its peak working population after years of rapid expansion. Now, in the decade from 2015 to 2025, Rabobank said China’s working population will decline by 40 million people, while its total population will continue to grow, albeit gradually.
It expects that the rural population, the producer of seafood, will bear the brunt of this decline, due to the combined effect of the one-child policy (despite its replacement with a two-child policy in 2017) and urbanization.
“Through modernization it will be possible to maintain current aquaculture production, but it will be very difficult to repeat the growth of the last decades. And with the government embarking on a decommissioning scheme to reduce its large coastal and domestic fleet, it is highly possible that China’s domestic seafood production will start to decline, or at least stabilize, after years of growth.”
At the same time, the changing preferences of Chinese consumers are also significant, especially of those in the increasingly wealthy cities, said the report. Following many food safety scandals in the last decade, the image of domestically-produced food, as well as farmed seafood, is declining.
This also comes at a time when China’s relatively strong currency, rising disposable income (still rising at 6 percent per year), and improving logistical infrastructure (number of refrigerated vehicles is rising at 17 percent per year) make China a target for seafood exporters around the world.
This is further enabled by the widespread adoption of online shopping.
In 2016, Alibaba, China’s leading online retailer, sold USD 485 billion (EUR 393 billion) worth of merchandise and overtook Walmart as the largest retailer in the world. And the report states that China’s rapid adoption of online shopping is beneficial for the global seafood industry.
Seafood from virtually anywhere in the world can be purchased in China with the push of a button on a mobile phone, it said.
“From Canadian scallops to Australian rock lobster, Norwegian salmon and Patagonian toothfish from Chile, many western luxury seafoods are now available in China and are increasingly being imported. And it’s not just western seafood – Indian and Ecuadorian farmed shrimp, Argentine wild shrimp and Vietnamese pangasius fillets are also finding new customers in China, where before they were predominantly being sold to the U.S., Europe, or Japan.
“If the current trends continue, China may transform into a net importer of seafood, from being the world’s leading exporter of seafood. This will create a global seafood shortage and drive demand for seafood across the world,” said the report.
