Production growth is mainly driven by strong domestic consumption due to greater disposable income and export-oriented aquatic processing. Total aquatic trade value in 2009 is forecast to increase moderately from the estimated $13.1 billion with export value at $ 9.7 billion in 2008. The current global financial crisis will likely slow down aquatic import growth for processing and re-export. In 2008, the United States remained China's largest buyer and second largest supplier of aquatic products. The recent opening of U.S. Food and Drug Administration offices in China is expected to strengthen confidence in China's aquatic food products and food safety.
Executive Summary
China’s 2009 aquatic production is forecast to reach 49.5 MMT, up two per cent from an estimated 48.6 MMT in 2008. Much of this production growth is due to the continued expansion of aquaculture which accounted for 69 per cent of total aquatic production during 2007. The increase in China’s aquatic production is tied both to its growing domestic demand as well as a strong export market. China’s rapid economic growth has increased disposable incomes, thereby encouraging greater aquatic products consumption. The expansion of the aquaculture area in both costal seawater and fresh water contributed greatly to the aquatic production growth while the aquatic catch production remains stable to declining in the next couple of years. Yield increases triggered by technological advances also boosted production. The aquatic processing sector, which is mainly export-driven, is also expected to expand further in the coming years.
Aquatic trade is forecast to grow in 2009 with China’s trade surplus expected to increase from the estimated $6.3 billion in 2008. Despite an expected weak demand by major importing countries as a result of the current financial crisis, export-oriented aquaculture and the dynamic processing trade are likely to grow at a marginal rate. The United States is the second largest recipient of China’s processed aquatic exports while ranks as the second largest supplier of China’s seafood imports. Aquatic trade between China and the United States is forecast to grow in 2009 with “Fish/Frozen” (HS Code 0303) continuing to be the major category imported from the United States. The export product mix to the United States is diversified (seasoning and cuts) and valued-added. The recent opening of the U.S. Food and Drug Administration (FDA) offices in China is expected to strengthen the confidence of Chinese aquatic product exports and facilitate smooth trade in 2009 and beyond.
Sustained high GDP and disposable income growth rates will continue to boost domestic consumption of aquatic products in 2009. However, aquatic imports for domestic consumption are growing at a slow pace. Nevertheless, high quality natural aquatic products from the United States are expected to steadily increase in volume and value.
Definition of terms: Aquatic products are both defined as cultured (farmed) and wild caught aquatic products; Aquatic products include fish, shrimp/prawn/crab, shellfish, algae, and other; Aquatic catch production is total volume of both fresh and sea water caught wild aquatic products; Aquatic culture production is the total volume of both fresh and seawater cultured (farmed) aquatic products. This report will use Chinese terminology to maintain consistency between Chinese statistics and product categories.
Production
Aquatic production is forecast to reach 49.5 MMT in 2009
China’s aquatic production for 2009 is forecast to reach 49.5 MMT, up by two per cent from the estimated 48.6 MMT in 2008. China remains the world’s largest aquaculture producer. The rise in aquatic production is attributed to the country’s rapid economic growth, rising disposable incomes and greater consumption of aquatic products, together with strong growth of aquatic exports. While official statistics are not yet available, the 2008 aquatic production is estimated to increase by two per cent over the 47.5 MMT in 2007. According to China’s Ministry of Agriculture (MOA), aquatic production for the first five months of 2008 reached 15.6 MMT, up more than four per cent over the previous year to date figure. MOA expected a normal production growth for the remainder of 2008. Industry sources also showed that total aquatic production in the first eight months of 2008 reached 26.5 MMT, up three per cent over the previous year. The production growth is mainly attributable to freshwater production at 12.5 MMT, up seven per cent over the same period in 2007, while sea catch production stood at 6.9 MMT, down more than two per cent. Another offic ial media source reported that total aquatic production for 2008 is expected to reach 48.9 MMT and the total freshwater aquatic production reached 17.4 MMT as of the end of October 2008. The devastating winter storms that hit south China from January through February of 2008 had some impact on aquaculture production, however, official data on damage is not available. Some industry sources reported losses of more than 4,000 MT of tilapia and 48 million tilapia fingerlings in Guangdong and Hainan provinces. Shrimp production was also affected. MOA reported that the industry quickly recovered and aquaculture production is likely to maintain normal growth in 2009 assuming favorable weather conditions in the major production areas in South China.
China’s continued aquatic production increase is fueled by aquaculture expansion which is estimated to account for 69 per cent of total aquatic production in 2007. According to China’s National Statistics Bureau (NSB), the yearly aquatic production growth rate from 2001 to 2007 averaged four per cent. During this same period, the annual cultured (farmed) aquatic production growth rate, however, grew at more than six per cent. Aquatic catch production remained stagnant from 14.3 MMT in 2001 to 14.7 MMT for 2007. Such a trend is likely to continue both domestically and worldwide in the foreseeable future and will only be limited by declining wild fishery resources. In contrast, aquaculture production will be driven by the further exploitation of water resources along with higher yields. Freshwater and seawater culture production both increased in 2007, up six per cent and three per cent over the previous year, respectively. Total cultured aquatic production reached 32.8 MMT, accounting for 69 per cent of total aquatic production in 2007.
Fish production stood at 28 MMT in 2007, up three per cent from the 27.1 MMT in 2006. It remains the largest category, accounting for 59 per cent of the total aquatic production, followed by shellfish and crustaceans at 24 and 11 per cent, respectively. Freshwater fish reached 19.1 MMT, accounting for 68 per cent of the total fish production. Cultured fish accounted for 92 per cent of all freshwater fish production in 2007. Carp is the most popular cultured freshwater fish with total production at 12.9 MMT in 2007, accounting for 74 per cent of total freshwater cultured fish production. Tilapia production maintained high growth in 2007 and reached 1,134,000 MT. Industry sources reported that despite the damages due to the devastating snow storm, tilapia production in 2008 is likely to reach 1.2 MMT. Tilapia production is also expected to continue growing in the near future in response to the strong demand for China’s tilapia products by foreign markets in particular the United States. Catfish production is likely to exceed 230,000 MT in 2008 from 210,000 MT in 2007. Shellfish continued to be the largest group of sea-cultured species with 2007 production exceeding 9.9 MMT, and accounting for 76 per cent of the total sea cultured production. Cultured crustacean production in 2007 reached 2.6 MMT. In all, freshwater production represented 65 per cent of the total cultured crustacean production in 2007. Cultured Penaeus vannamei (also known as white shrimp) production reached 1,065,000 MT in 2007, accounting for 41 per cent of total cultured crustacean production.
In 2008, Shandong, Guangdong, and Fujian provinces are expected to remain the three largest aquatic product producers mainly because of their large sea cultured production. Guangdong, Hubei and Jiangsu provinces rank as the top three in terms of freshwater production due to their high freshwater cultured production as a result of abundant freshwater resources in the area.
Freshwater aquaculture exists nationwide, particularly for carp. However, some species’ production is limited to certain regions due to available resources and climate conditions. For example, tilapia production by three provinces Guangdong, Guangxi, and Hainan continued to dominate, accounting for 82 per cent of the total 1,134,000 MT in 2007. Catfish production, on the other hand, is located primarily in Hubei, Sichuan, and Jiangsu, collectively produced 49 per cent of the national total. Jiangxi and Anhui provinces’ production also exceeded 20,000 MT in 2007, respectively. The largest producers for both fresh and seawater shrimp and prawn are Guangdong, Jiangsu, Guangxi, Zhejiang, and Hainan provinces. Guangdong continued to be the largest shrimp producer with total cultured production at 507,000 MT, of which Penaeus uannamei production at 395,900 MT in 2007. Eel production is concentrated in Fujian, Guangdong, and Jiangxi provinces with much of it destined to the Japanese market. The combined cultured shellfish production of Shandong, Fujian, Guangdong, and Liaoning provinces accounted for 74 per cent of the 2007 total.
Aquatic catch production remains stable
The total 2009 catch production is forecast similarly to 2008’s estimate of 14.6 MMT. According to NSB, annual seawater catch between 2004 and 2007 ranged from 12.4 to 12.5 MMT and accounted for 85 per cent of the total catch. Freshwater catch production remained small at about 2.2 MMT in the past few years. Industry sources report that total catch is unlikely to increase significantly in the foreseeable future due to limited freshwater and seawater natural resource availability. Though seawater catch data for other territorial seas is not officially released, most industry insiders believe it is difficult to increase production significantly.
Aquaculture farmed area expansion continues
The total aquaculture area continued expanding in 2007, exceeding 5.7 MHA, up more than four per cent over 2006. The combined freshwater and seawater areas increased by 227,000 HA, with 167,000 HA for freshwater and 60,000 HA for seawater in 2007. Shandong and Liaoning provinces added 53,000 hectares of seawater culture area, while Guangxi and Sichuan provinces increased freshwater culture area by 118,000 hectares in 2007 mainly through developing reservoir and pond resources. Seawater culture area is likely to grow moderately in the coming years. Freshwater culture area is also expected to increase because some reservoirs/lakes are not fully utilized for aquaculture purposes due to growth constraints such as lack of transportation and technical services. However, MOA indicated that limited water resources and environmental concerns pose new challenges to the expansion of aquaculture areas and additional production gains shall be achieved through technology dissemination and innovation.
Aquaculture production faces new challenges
Despite the fast growth of the aquaculture sector, the industry’s expansion has mainly relied on increasing the production capacity and farming area. In reviewing the fast growth of the aquaculture sector in past decades, MOA said the industry faces three major challenges: the deterioration of fishery resources and overfishing continues to threaten fishery ecological environment; food safety-related incidents increase along with production growth and fishery production is increasingly affected by natural disasters including storms, typhoons, and unexpected freezing temperatures. On February 25, 2008, MOA implemented an “Action Plan on Promoting Healthy Aquaculture Production”. The main purpose is to further enhance the aquaculture production licensing system to cover 90 per cent of all aquaculture farms, and to establish 200 healthy aquaculture demonstration farms nationwide. To ensure the quality of aquatic products, particularly goods for export, MOA and the Administration for Quality Supervision, Inspection and Quarantine of China (AQSIQ) adopted a strict licensing regime for all export-oriented farms and processing establishments. MOA and AQSIQ conduct frequent field audits of export-oriented aquaculture farms. Aquatic products for export are subject to mandatory inspection and must be accompanied by AQSIQ inspection certificates.
Aquatic processing is mainly driven by exports
According to MOA, the total number of aquatic processing facilities continued to increase in 2007, reaching 9,796, up by 241 over 2006. Processing capacity also rose to 21 MMT from 18 MMT in 2006. The number of cold storages facilities increased to 6,857, up 305 over 2006. The total aquatic products processed in 2007 reached 16.8 MMT compared to 16.3 MMT in the previous year. This accounted for about 35 per cent of the total aquatic production in 2007. Total processed aquatic product volume stood at 13.4 MMT, of which 8.1 MMT was frozen or frozen processed goods. Industry sources indicate that this situation reflects domestic consumers enduring preference for live aquatic products. The processing sector’s capacity to expand is mainly driven by export market demand which led to the construction of new production facilities.
The dynamic processing trade also spurred greater investment in 2008. Industry sources estimate that the processing trade currently accounts for less than 40 per cent of China’s aquatic product export value and is expected to steadily increase. Processed aquatic products using domestic raw material (mostly cultured products) is also mainly export driven. Domestic consumption of processed aquatic products remains relatively small compared to the total annual domestic aquatic product consumption. Although some consumers in large cities have begun purchasing processed aquatic products, most Chinese consumers still prefer live or fresh aquatic goods. Despite complaints of foreign trade barriers on Chinese aquatic products, MOA acknowledged that the barriers also forced the sector to invest more in producing value-added, quality products.
Aquatic processing bases are located within or near major aquatic production regions. Out of the total 9,796 processing facilities, 6,668, or 68 per cent are concentrated in Zhejiang, Shandong, Fujian, and Guangdong provinces. These provinces are also major aquaculture producers and are equipped with port and cold storage facilities. Many foreign traders have also entered the processing trade industry in these provinces.
National aquatic statistics data adjusted down
Based on results from the Second National Agriculture Census (conducted in 2006), NSB reduced the total domestic aquatic production data from 1997 to 2006 (Chart-1-based on 2007 and 2008 China Statistics Yearbook). The huge drop in the production figure was mainly a result of over-estimated aquaculture area and production, together with an overreported sea catch production (by approximately 2 MMT yearly since 1997). The Agriculture Census results are used in estimating the production in 2007 and 2008. Despite the NSB adjustment in production, the yearly growth rate in the past ten years remained generally unchanged. According to MOA’s 11th Five-Year (2006-2010) Plan for the Fishery Industry (11th Five-Year Fishery Plan), aquatic production is expected to grow by more than three per cent annually.
Further Reading
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January 2009
