China has issued a stark warning over the worsening loss of competitiveness of its seafood sector.
What China terms its “comprehensive export price of aquatic products” – an average yield on exported product – has dropped for two consecutive years since 2014, with a decline of 6.1 percent in 2016 and a 2.28 percent decrease between 2016 and the year prior.
The data was published in ‘China Fishery Daily,’ a newspaper affiliated to the agricultural ministry and reflecting its views. According to the newspaper’s report, “Taking into account the continuous increase in domestic production costs, seafood processing and export enterprises will face further declines in efficiency.”
Dense with data, the report notes that aquatic exports bucked expectations to reverse a drop the previous year. “General trade” exports – a term used to describe seafood filets and lightly processed product – continued to rise, but the proportion of imports to the processing and exports continued to decline last year.
Customs data shows China exported 42.3 million tons worth USD 20.7 billion (EUR 19.3 billion) – up 4.37 percent and 1.99 percent, respectively in 2016 – while imports of 40.4 million tons were down 0.98 percent. Imports were up 4.37 percent in value terms to USD 9.4 billion (EUR 8.7 billion).
Imports for domestic consumption at 8.13 million tons of aquatic products dropped 2.3 percent but rose 10.6 percent in USD 3.5 billion (EUR 3.2 billion) – a fact the report attributes to China’s imports of “high-grade” seafood increasing faster than overall imports.
In 2016, “general trade” aquatic products exports, at 30.21 million tons and USD 15.4 billion (EUR 14.3 billion) in value, were up 7.96 percent and 3.51 percent year-on-year, respectively, and accounted for 71.3 percent of overall export volumes and 74.4 percent of overall export value.
China shipped 11.33 million tons worth of processed exports at a value of USD 5.1 billion (EUR 4.7 billion) in 2016 – down 0.9 percent and 2.1 percent in volume and value terms. Processed product as a percentage of overall exports fell to 24.7 percent, down one percentage point on 2015, due to ising production costs and competition from cheap imports, according to the report. Contract export processing volumes totalled 9.12 million tons worth USD 3.9 billion (EUR 3.6 billion) – up 1.59 percent and 0.45 percent, respectively, on 2015.
However, non-contract processing (where the seafood is imported and purchased by the Chinese processors) hit volumes of 20.12 million tons worth USD 11.9 billion (EUR 11.1 billion) – down 10.81 percent and 9.64 percent year-on-year. Contract processing product as a percentage of overall exports has dropped 17 percentage points since 2007.
Even more dramatic was the falloff in exports to the U.S. in 2016, which totaled 544,900 tons, worth USD 3 billion (EUR 2.8 billion), down 1.08 percent and 4.79 percent, respectively. The outlook for exports to the U.S. is gloomy, according to the report, due to “political events, competition from other suppliers and quality and safety issues.” Likewise, China's imports from the United States declined by 7.51 percent and 2.59 percent, respectively – something which the report puts down to “uncertainties caused by U.S. political reorganization.”
Shipments to Hong Kong – both a major consumption point as well as a transhipment hub – totalled 216,900 tons worth USD 2 billion (EUR 1.9 billion), down 1.3 percent and 4.81 percent, respectively. It appears the fall has something to do with rising domestic demand for crustacean products in particular, as exports of crab to Hong Kong fell 13.75 percent year-on-year and 28 percent in value terms.
Buffeted by a stronger dollar (relative to the RMB) and the E.U.’s repeal of a ban on Chinese shellfish , year-over-year exports to the E.U. increased by 62.14 percent in tonnage and 156 percent in value, to a total of 556,500 tons worth USD 2.3 billion (EUR 2.2 billion).
Exports to Korea and Taiwan, in contrast, were up significantly and China's imports from Southeast Asia, Chile, New Zealand, Russia, Canada increased by 17.3 percent, 17.1 percent, 15.7 percent, 15.2 percent and 11.2 percent, respectively. Imports from Peru – a key supplier of fishmeal which is counted in China’s overall seafood import figure – in 2016 fell by 25.9 percent and 28.42 percent year-on-year in volume and value terms.
