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Prawns a Golden Harvest, but Challenges also Grow

Crustaceans Economics Politics +3 more

CHINA - With 1,243 kilometers coastline and more than 100 bays, Zhanjiang has long been a nationally important center of aquaculture in China.More than half of the prawns harvested in its home province Guangdong and a third of the national total come from the city, according to the Zhanjiang Association of Aquatic Products Import & Export.

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Locals are proud of several first-place rankings: The city has the largest prawn cultivation area, production and export volume in the country. It also ranks at the top in production of prawn seed and feed production, processing, and has the largest prawn trading market in China.

More than a million farmers, fishermen, dealers and factory workers - roughly a sixth of Zhanjiang's population - making their living in the industry.

Reasons behind success

Zhanjiang developed the robust sector as a result of a "cluster affect", said Cen Jian, secretary-general of the Zhanjiang Aquatic Products Import and Export Association.

"Zhanjiang has a full-fledged aquaculture industry chain. From seed cultivation to feed production, from raising aquatic products to processing them, the city has strong competitiveness in all sectors," Cen said.

A seafood wholesale market in the city's Xiashan district is the largest of its kind in Asia. It serves as a trading, logistics, information and financial center for various aspects of the prawn business, and also draws other aquatic products from around the country, expanding its commerce to national significance.

Processing has also flourished due to the local industry's focus on food quality and safety, Cen said. Of the 264 Zhanjiang processing companies, 33 have been certified by South Korea, 22 have approval from the United States, 10 from the European Union and 17 from Russia.

An example is Zhanjiang Evergreen Aquatic Product Science and Technology Co, which has certification from several institutions in the US and EU, notably HACCP, a systematic preventive approach to food safety recognised worldwide. Standing in front of a wall of closed-circuittelevisions, the company's inspectors can monitor every aspect of processing from slicing and packaging to storage in real time.

Li Shuguang, sales manager at Evergreen, said: "sanitary food is the cornerstone of the business". Last year, the US government enacted the Food Safety Modernization Act that raised FDA requirements for food exporters. Evergreen swiftly responded with higher standards.

"In the face of a higher wall, we have no choice but to improve ourselves," Ms Li said, noting that the US and EU account for 70 percent of Evergreen's exports.

Industry upgrading

Even with the current sluggish economies of the EU and US, Zhanjiang's aquatic food exports to the regions still grew by 15 per cent in the first half of the year, according to statistics from the Zhanjiang Foreign Trade & Economic Cooperation Bureau.

The reason, experts said, is that prawns, tilapia and many other aquatic products are not discretionary spending items in the West, but rather staples.

Evergreen even saw exports rise by 30 per cent. But even though business is prosperous, processing companies have various challenges, notably stiff competition and demands for ever-rising food safety standards.

Wang Youqun, an executive at Zhanjiang Zhaohui Aquatic Product Co Ltd, a smaller processor, said exports in the first six months grew by 50 percent, butshe is not optimistic about the second half of the year.

"The appreciation of yuan, rising food safety standards and surging production costs all pose grim challenges for small businesses like us," Wang said

For large firms like Evergreen, quality control over the entire food production chain is the major problem. "A processing factory is only part of the chain - problems can originate from non-standard aquaculture practices that we can hardly control," Ms Li said.

To address the problem, Evergreen has begun its own aqua farming operations. Its parent company, a seeds producer, offers quality seeds and technical assistance to farms that now provide half of Evergreen's raw materials.

The upgrade has won the title of "national aquatic food export transformation and upgrading demonstration center" from China's Commerce Ministry, but Wang would like to see more assistance.

"To further transform and upgrade, we would like to see more support from the government, she said.