The sustainable aquaculture sector in China is being negatively affected by the coronavirus as it is heavily reliant on exports.
China produces over 60% of the world’s aquatic products. Alongside supplying the expanding domestic market, about 20% of its output is exported. Because of tougher overseas customs rules and buyer requirements, higher environmental and management standards are often applied when products are intended for export.
Fang Qing is China manager for the Aquaculture Stewardship Council (ASC), a sustainable seafood certification body. He says 20% of China’s large aquaculture firms are certified by third parties such as the ASC, Best Aquaculture Practices or ChinaGAP. These schemes focus on, respectively, protecting biodiversity and water resources, ensuring food safety, and traceability. They produce aquaculture standards accordingly. Certification is voluntary but offers credibility on the international market and increased competitiveness. Fang told China Dialogue that while there is no publicly available data, certified aquaculture firms mainly produce seafood for export.
To win market trust, some producers are trying new methods, such as moving to less-intensive shrimp-farming techniques, which require less antibiotic use.
He explained that when the smaller operations are included, less than 1% of all aquaculture producers have certification. China gets high yields from its aquaculture sector – but it is also troubled by outbreaks of disease arising from intensive farming and the overuse of antibiotics, issues which cause international concern. To win market trust, some producers are trying new methods, such as cutting down on the use of foam buoys in oyster farming and moving to less-intensive techniques for farming shrimp, which require less antibiotics. Tilapia farming and processing firms, which have built up techniques and capital over many years and acquired certification, are a highlight of sustainable aquaculture in China.
The industry still faces uncertainty in its overseas markets, as well as competition from other products. China has long supplied about 70% of US tilapia imports but sales have slid in the last five years. According to an Undercurrent News report, the US-China trade war and other factors saw 2019 exports fall 16% on the previous year – and that was the smallest drop among the nine major seafood categories which China exports to the US. Shrimp exports fell 60%. A potential agreement on tariff removal has been delayed due to the coronavirus, and with US elections due in November the 25% punitive tariffs on tilapia may yet stand for another year.
Other producers are keen to fill the gap. A report on China’s tilapia trade released by the Global Aquaculture Summit, a platform established by Chinese organisations, said of the US market that “competition is appearing from other low-cost products”. These include the basa, from Vietnam, and US-produced cod. The report went on to say that “competition in the tilapia market will be price-focussed” for some time to come. Clearly bad news for Chinese tilapia producers.
China is the world’s largest tilapia producer, accounting for about 25% of global output. Its share of the market is safe in the short term, but current price trends are pushing fish farmers to the brink of unprofitability. In 2019, Chinese tilapia was only slightly more expensive than the lowest-cost producer, Taiwan. “Overall, the farmers aren’t making anything, and some are losing a little money,” Zhou Qinfu, president of Qinfu Food, said in a phone interview.
As Fang Qing of the ASC says, the duration and impact of the coronavirus could have effects on the aquaculture sector not just for three to five months, but three to five years.
In an industry meeting conducted online, Lyu Wei, head of Dalian Fugu Foods, said Covid-19 will result in “a shake-up throughout the industry. Consumption of fresh fish may fall, and we could see some aquaculture products fail”.
That also applies to firms certified as sustainable. Fang Qing said that for one shellfish farming company on the Yellow sea coast, February to May is a key period for planting out oyster “spat” – larval oysters ready to settle. If the workers can’t do that, two years of harvest will be lost. Thankfully, the firm was able to get back to work and domestic demand is recovering, but overseas demand will depend on the pandemic.
Source: The Maritime Executive (03/04)