March 7, 2014

Raw material prices for tilapia out of China started climbing again in January and February this year after a lull at the end of 2013.

In Zhanjiang area, western part of China's Guangdong province, raw material prices for fish of 500-800 grams reached RMB10.80 (US$1.77) per kilogramme in the week of February 20, and climbed to CNY11 (US$1.80) per kilogramme in the week of February 27.

Prices were around CNY10.30-10.40 (US$1.68-1.70) at the start of January, before increasing gradually to RMB10.60-10.80 (US$1.73-1.77) by end January, he said.

The increase was partly due to cold and foggy weather in Zhanjiang, which increased fish mortality, reducing supply.

Prices from Guangdong will likely start dropping when the new harvest starts in June, and discounting any unpredictable impact from weather, flooding and diseases.

The recent good prices have benefited farmers and could be an incentive for them to farm more fish as they start stocking fingerlings in ponds during the second half of March.

In Hainan, where raw material prices are also at around CNY10.80-11 (US$1.77-1.80) per kilogramme, prices could start dropping already in April, when the region starts its harvesting season.

On the other hand, an overcapacity of processors in Hainan could lead to a price war, in turn offsetting the drop.