Due to its significance, any changes in export trends impact on the industry within China as around 800 processing plants and companies have been registered by the Chinese authorities to export to the US market. This paper reviews the first quarter of 2007 and 2008 to see to what extent the US action to automatically detain 5 species (farmed catfish (basa, pangasius), shrimp, dace, and eel) exported from China effective since June last year has affected Chinese exports to the US market.
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Chinese exports to USA decreased in the first quarter of 2008
Figures from Chinese customs (table 1 below) indicate that in the first quarter of 2008, Chinese seafood exports to the US market decreased by 12% in value and by 17% in volume compared with the same period in 2007. This is the first time that Chinese seafood exports to the US market are showing a negative growth trend. The continuing impact of US restrictions concerning Chinese seafood products is said to be the main reason behind this export decline.
Analysis on a monthly basis indicates that for the three months from January to March, exports in both value and volume showed a decline in 2008 compared to 2007. In particular, exports for February i2008 witnessed a sharp reduction from 43 130 tonnes and US$148 million in 2007 down to 29 759 tonnes and US$110 million in 2008. This substantial reduction is partly due to the bad winter weather disaster experienced by China in February. It was reported that the bad weather has caused a loss of 870 000 tonnes of fish and fishery products in the south of China with tilapia, catfish and many other farmed species as the most affected categories.
However, analysis by species exported by China indicates that most species showed a continuing decline although the decline in exports of tilapia was modest at least in value terms at US$64 million (24 410 tonnes) in 2008 compared with US$65 million (27 574 tonnes) in 2007. The figures also suggest that the Chinese tilapia industry moves more and more to high value exports with average unit export values increasing. Provinces such as Hainan and Guangxi which are also major tilapia production areas in China and were not affected by the bad winter weather, still show a strong growth in tilapia exports. Shrimp, catfish and other aquacultured products experienced a substantial decrease and marine fish fillets (excluding tilapia fillets) which is the major export category also witnessed a decline
Strong growth in imports of seafood from the USA
In contrast, imports from the US maintained a strong growth for the first quarter of 2008 reaching 55 888 tonnes and US$95 million, up by 21% in volume and by 25% in value compared with the same period in 2007. Frozen squid, frozen fish and fishmeal are the major product categories imported. Except for fishmeal which is imported for local aquaculture, the other products are mainly used for re-exports after processing in China.
Future development
Problems found in Chinese products such as seafood, pet food and toys, in the US market last year cast shadows over Chinese manufactured products which have had a significant negative impact on Chinese exports. These problems along with sometimes exaggerated media reports contributed to worldwide concerns over Chinese made products. As a result, the Chinese seafood industry is now experiencing its most difficult time in recent decades. Appreciation of the RMB against the US dollar, economic setbacks in the USA and the skyrocketing of fish production input prices have further intensified the situation.
China is now undergoing a trade policy change which will shift priorities from exports and towards domestic consumption. Particularly with regard to sluggish consumption in rural areas, which cover 57% of the Chinese population, the Chinese government is now stimulating consumption through increasing investment, exemption of education fees for rural pupils, subsidizing medical care and life insurance etc. The writer believes that once this market has been activated, China may not need to export its seafood but rather to import seafood to meet this market demand. This, however, is a process which may need at least 10 or 20 years. It is worth pointing out that figures from Chinese customs indicate that China already imports more seafood than it exports, although about a third of imports is used for re-exports after processing.