October 19, 2018

China tilapia trade outlook bleak

Chinese exports of farmed tilapia continue to decline with shipments to the US, the largest tilapia market, not showing much sign of picking up despite a continuing price slide. This reflects persistent weak consumer demand, according to Globefish, the FAO's fish-trade site.

Other producers in Asia and Latin America, however, continue to expand their capacity, boosted by regional demand.

Although China remains the largest producer of farmed tilapia, harvesting around 1.7 million tonnes per year, its growth rate has slowed relative to other producing countries in Asia, Latin America and Africa.

The Chinese share of total production is expected to decline further in 2018, with Indonesia and Egypt expected to harvest 1.25 million and 780,000 tonnes, respectively. Bangladesh, Brazil, Viet Nam, Mexico and India are also set to expand their production capacity.

The total value of global tilapia trade is still likely to drop in 2018, Globefish said.

In addition to subdued buyer interest in the US, the appreciation of the Chinese yuan versus the US dollar in the second quarter has compounded price declines. Together with lower export subsidies, rising wages and imposed tariffs in the key US market, this has created challenging conditions for Chinese exporters and processors.

Stagnating US demand

Several factors contribute to the stagnating US demand for tilapia including some bad press tilapia has suffered in recent years. The escalating trade war between the US and China is also an important consideration for the global market as a whole, as the Trump administration has imposed tariffs on a range of Chinese goods including seafood.

China's share of the US' total tilapia exports has been falling in favour of Latin American suppliers such as Colombia, Mexico and Honduras. There is also a shift toward more expensive tilapia marketed as a gourmet food item. Large producers see premium tilapia as a means of revitalising the US market and realising the great potential represented by the EU28.

Demand for premium tilapia is not restricted to developed markets, with Latin American and Asian consumers increasingly ready to pay higher prices for higher quality product, Globefish said.

It said the outlook for international tilapia trade for the remainder of the year is uncertain, depending largely on developments affecting the trade relationship between China and the US. The imposition of tariffs on Chinese tilapia would exasperate the current difficulties faced by the Chinese industry but would strengthen the position of competing producers, Globefish noted.

"The trend towards premium product marketed as high quality, sustainable and healthy can be expected to continue, but the recent certification of a number of Chinese farms under the Best Aquaculture Practices (BAP) scheme, maintained by the Global Aquaculture Alliance (GAA) shows that Chinese producers do not intend to be excluded from this segment", it added.