April 2, 2020
COVID-19 hits China's sustainable aquaculture
As customers from the US and elsewhere hold off on orders due to COVID-19, China's aquaculture sector suffers damage especially companies that specialise in sustainable aquaculture products because they mostly rely on exports.
Two major industry events have already been postponed: Seafood Expo North America, the largest such exhibition in the continent, was due to take place in Boston mid-March, and Seafood Expo Global was planned for Brussels in April.
"Every year we get 40%-50% of our orders confirmed at that [first] exhibition," said Chen Sheng, general manager of the Maoming Evergreen Aquatic Product Co. Ltd. In 2019, almost 200 Chinese firms had a presence there, including all the major ones. He says that maintaining relationships and negotiating with customers has shifted online.
The delay may offer China's producers temporary relief from questions about safety and supply stability from over-anxious international buyers. But problems remain for producers of aquatic products such as tilapia—a freshwater fish originally from Africa—who rely heavily on overseas markets.
With transportation cut off in China, public spaces closed and people forced to stay at home to contain the virus, there have been fewer domestic buyers for aquatic products and almost nobody eating at restaurants. By 11 March, a month and a half after the Wuhan lockdown, a survey of 55 major markets in Beijing, Shanghai and Guangzhou showed aquatic sales had recovered to just about half of normal levels.
The effects quickly trickled down from retailers to hatcheries, farms and processors—and eventually, as the COVID-19 spread overseas, exporters.
Japan, Korea, the EU and the US have been the main destinations for China's aquatic exports for over a decade. "Currently, all exports to Korea are on hold, and exports to Japan, the EU and the US have fallen", said Cui He, head of the China Aquatic Products Processing and Marketing Alliance. China's seafood exports are, he said "facing their biggest ever test". One example of the gravity of the situation is Chinese tilapia, half of which is usually exported.
Tilapia, a freshwater fish with delicate flesh and few bones, has been farmed in China for almost three decades, mostly in the southern provinces of Hainan, Guangdong and Guangxi.
Large tilapia farming firms work closely with small-scale farmers—often household operations—by providing juvenile fish and technical guidance, then buying up the mature fish.
Chen Sheng said that the pandemic had resulted in customers delaying more than 40% of the orders that were due in March by about two months. They had been bound for the US, Canada and the Philippines.
Two other major tilapia producers, Hainan Xiangtai Fish and Hainan Qinfu Food, are facing similar situations, with delays mainly to orders from the US.
The US buys about one third of China's annual tilapia exports, making it the major importer.
For Hainan Xiangtai Fish, the figure is higher still: the US buys about half of its tilapia exports. Liu Zidan, the firm's new retail and e-commerce director, said that in early March a shipment of tilapia was held up at US customs in order to check the vessel had left port at least 14 days prior (long enough for any COVID-19 present in the crew to have run its course). By 10 March, the US Food and Drug Administration had replaced most overseas inspections of US-bound imports with sampling at the border or checks of information shared by foreign governments, with the measures expected to last until April and slow trade further.
Workers at the three companies mentioned were able to restart work around 20 February, thanks to measures taken to prevent infections. Hainan Qinfu Food has a full overseas order book for April, but the pandemic means regular customers are unable to confirm orders after May or June.
"With no orders or intended orders, we can't work," says Chen Sheng. "We make different types of products, to different standards, for different markets. There's no guarantee we could find alternative markets for anything we produced without an order."