October 29, 2012

China to see continual rise for seafood imports

China may maintain its rapid import growth with rising domestic consumption of expensive seafood products.

"If China's current annual growth rate in seafood imports, of almost 14%, is anything to go by, they will almost treble to US$20 billion within this decade and may even rise above US$24 billion by 2020," Gorjan Nikolik, Rabobank's senior food and agribusiness analyst said.

China's seafood consumption rose to 30 kilogrammes per person per year in 2009 from around 10 kilogrammes in 1990, he said.

In the past, Chinese ate mostly carp and other freshwater fish, but rising incomes have created demand for higher-priced items, such as oysters, crabs, lobsters and salmon, Nikolik said.

China's imports of salmon from Europe, consumed mostly as sashimi and sushi, increased more than tenfold from 2000 to 2011, to 12,000 tonnes, he said.

China is also the world's largest exporter of seafood, with US$16 billion of shipments in 2011 following a compounded annual growth rate of 15% over the past decade, he said.

This will slow to low single digits within a few years, Nikolik said, citing a recession-driven slowdown in demand from developed countries, higher Chinese wages that will push export prices higher and increasing competition from Vietnam.

Nevertheless, China will continue to be a major exporter of seafood products, including shrimp, cod, pollock and tilapia, for years to come, he said.

Local niche aquaculture industries for mitten crab, abalone and sea cucumber, grew by more than 15% between 2005 and 2010, he said, with demand for some niche shellfish growing by more than 20% a year. For some shellfish, such as mussels, scallops and abalone, supply isn't keeping pace with demand, which means rising global prices, he added.

Meanwhile, prices of key inputs, such as fishmeal, are also rising due to Chinese demand. Gorlik said fishmeal prices have tripled since 2004 to US$1700 per tonne. Many aquaculture farmers are substituting fishmeal with soy, but prices of the latter have also more than tripled in since 2004--to US$550 per tonne from US$160 per tonne.