{"id":40077157,"date":"2020-03-31T00:00:00","date_gmt":"2020-03-30T18:30:00","guid":{"rendered":"http:\/\/china-dialogue-ocean-staging.darkbluehq.com\/uncategorized\/13453-coronavirus-hits-sustainable-aquaculture\/"},"modified":"2022-02-10T23:01:40","modified_gmt":"2022-02-10T17:31:40","slug":"13453-coronavirus-hits-sustainable-aquaculture","status":"publish","type":"post","link":"https:\/\/dialogue.earth\/en\/ocean\/13453-coronavirus-hits-sustainable-aquaculture\/","title":{"rendered":"Coronavirus hits sustainable aquaculture"},"content":{"rendered":"

The damage to China\u2019s aquaculture sector caused by coronavirus could be far-reaching as customers from the US and elsewhere hold off on orders. Companies that specialise in sustainable aquaculture products look to be especially affected because they rely most on exports.<\/span><\/p>\n

Two major industry events have already been postponed: Seafood Expo North America, the largest such exhibition in the continent, was due to take place in Boston mid-March, and Seafood Expo Global was planned for Brussels in April.<\/span><\/p>\n

\u201cEvery year we get 40-50% of our orders confirmed at that [first] exhibition,\u201d Chen Sheng, general manager of the Maoming Evergreen Aquatic Product Co. Ltd. told China Dialogue. In 2019, almost 200 Chinese firms had a presence there, including all the major ones. He says that maintaining relationships and negotiating with customers has shifted online.\u00a0<\/span><\/p>\n

The delay may offer China\u2019s producers temporary relief from questions about safety and supply stability from over-anxious international buyers. But problems remain for producers of aquatic products such as tilapia \u2013 a freshwater fish originally from Africa \u2013 who rely heavily on overseas markets.<\/span><\/p>\n

Export problems<\/h2>\n

With transportation cut off in China, public spaces closed and people forced to stay at home to contain the virus, there have been fewer domestic buyers for aquatic products and almost nobody eating at restaurants. By 11 March, a month and a half after the Wuhan lockdown, a <\/span>survey<\/span><\/a> of 55 major markets in Beijing, Shanghai and Guangzhou showed aquatic sales had recovered to just about half of normal levels.<\/span><\/p>\n

The effects quickly trickled down from retailers to hatcheries, farms and processors \u2013 and eventually, as the coronavirus spread overseas, exporters.\u00a0<\/span><\/p>\n

\n

60%<\/p>\n

\n
\nthe proportion of the world's aquatic products that China produces
\n\n <\/div>\n <\/div><\/span><\/p>\n

Japan, Korea, the EU and the US have been the main destinations for China\u2019s aquatic exports for over a decade. \u201cCurrently, all exports to Korea are on hold, and exports to Japan, the EU and the US have fallen\u201d, said Cui He, head of the China Aquatic Products Processing and Marketing Alliance, in a 9 March <\/span>article<\/span><\/a>. China\u2019s seafood exports are, he said \u201cfacing their biggest ever test\u201d. One example of the gravity of the situation is Chinese tilapia, half of which is usually exported.<\/span><\/p>\n

Tilapia, a freshwater fish with delicate flesh and few bones, has been farmed in China for almost three decades, mostly in the southern provinces of Hainan, Guangdong and Guangxi.<\/span><\/p>\n

Large tilapia farming firms work closely with small-scale farmers \u2013 often household operations \u2013 by providing juvenile fish and technical guidance, then buying up the mature fish.<\/span><\/p>\n

In a WeChat conversation on 21 March, Chen Sheng told China Dialogue that the pandemic had resulted in customers delaying more than 40% of the orders that were due in March by about two months. They had been bound for the US, Canada and the Philippines. <\/span><\/p>\n

Two other major tilapia producers, Hainan Xiangtai Fish and Hainan Qinfu Food, are facing similar situations, with delays mainly to orders from the US.<\/span><\/p>\n

The US buys about one third of China\u2019s annual tilapia exports, making it the major importer.<\/span><\/p>\n

For Hainan Xiangtai Fish, the figure is higher still: the US buys about half of its tilapia exports. Liu Zidan, the firm\u2019s new retail and ecommerce director, said that in early March a shipment of tilapia was held up at US customs in order to check the vessel had left port at least 14 days prior (long enough for any coronavirus present in the crew to have run its course). By 10 March, the US Food and Drug Administration had replaced most <\/span>overseas inspections<\/span><\/a> of US-bound imports with sampling at the border or checks of information shared by foreign governments, with the measures expected to last until April and slow trade further.\u00a0<\/span><\/p>\n

Workers at the three companies mentioned were able to restart work around 20 February, thanks to measures taken to prevent infections. Hainan Qinfu Food has a full overseas order book for April, but the pandemic means regular customers are unable to confirm orders after May or June.<\/span><\/p>\n

\u201cWith no orders or intended orders, we can\u2019t work,\u201d says Chen Sheng. \u201cWe make different types of products, to different standards, for different markets. There\u2019s no guarantee we could find alternative markets for anything we produced without an order.\u201d<\/span><\/p>\n

Meanwhile, the tilapia in the fish farms are getting big enough to be processed and exported. But if processors don\u2019t buy them, the farmers can\u2019t start the next cycle and the entire flow of the industry will be disrupted for the coming six months. To free up the fish ponds, the Ministry of Agriculture held a <\/span>video conference<\/span><\/a> in late February to coordinate fish processors getting back to work.<\/span><\/p>\n

There are usually two tilapia farming cycles a year. Han Han, founder of Hainan NGO China Blue, notes a survey by the Hainan Tilapia Sustainability Alliance that found one in ten of Hainan\u2019s tilapia farmers hasn\u2019t been able to clear their ponds of mature fish and add new young.\u00a0<\/span><\/p>\n

\u201cIf the delays go over two or three months, the pressure will shift to the processors and exporters,\u201d Chen says. The third quarter is when large quantities of his company\u2019s export products go on sale, with the entire processing industry boosting consumption and production. Processing and exports are vital links in the industrial chain.<\/span><\/p>\n

<\/p>\n

\"coronavirus<\/a>
Chinese fishermen catch tilapia at a farm in Qionghai city, Hainan island (Image: Alamy)<\/figcaption><\/figure><\/p>\n

<\/div>\n

Sustainable producers rely on exports<\/h2>\n

China produces over 60% of the world\u2019s aquatic products. Alongside supplying an ever-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.<\/span><\/p>\n

Fang Qing is China manager for the Aquaculture Stewardship Council (ASC), a sustainable seafood certification body. He says 20% of China\u2019s 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.<\/span><\/p>\n

To win market trust, some producers are trying new methods, such as moving to less-intensive shrimp-farming techniques, which require less antibiotic use.<\/p><\/blockquote>\n

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<\/a> \u2013 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.\u00a0\u00a0<\/span><\/p>\n

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 <\/span>Undercurrent News<\/span><\/a> report, the US-China trade war and other factors saw 2019 exports fall 16% on the previous year \u2013 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.<\/span><\/p>\n

Other producers are keen to fill the gap. A <\/span>report<\/span><\/a> on China\u2019s tilapia trade released by the Global Aquaculture Summit, a platform established by Chinese organisations, said of the US market that \u201ccompetition is appearing from other low-cost products\u201d. These include the basa, from Vietnam, and US-produced cod. The report went on to say that \u201ccompetition in the tilapia market will be price-focussed\u201d for some time to come. Clearly bad news for Chinese tilapia producers.<\/span><\/p>\n

China is the world\u2019s 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 <\/span>more expensive<\/span><\/a> than the lowest-cost producer, Taiwan. \u201cOverall, the farmers aren\u2019t making anything, and some are losing a little money,\u201d Zhou Qinfu, president of Qinfu Food, said in a phone interview.<\/span><\/p>\n

A focus on domestic sales<\/h2>\n

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.<\/span><\/p>\n

In an <\/span>industry meeting<\/span><\/a> conducted online, Lyu Wei, head of Dalian Fugu Foods, said Covid-19 will result in \u201ca shake-up throughout the industry. Consumption of fresh fish may fall, and we could see some aquaculture products fail\u201d.<\/span><\/p>\n

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 \u201cspat\u201d \u2013 larval oysters ready to settle. If the workers can\u2019t 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.<\/span><\/p>\n

To minimise the effects of the export slump, Chen Sheng\u2019s firm is planning to reduce tilapia exports by 10% and focus on more highly processed products, while developing convenience foods for the domestic retail market. In general, tilapia producers are looking to expand domestically, while maintaining international sales. In the two weeks after resuming work, Xiangtai saw orders from Chinese ecommerce merchants up threefold on the previous year.<\/span><\/p>\n

\u201cWe\u2019re definitely going to push domestic sales in the future,\u201d Zhou Qinfu said. According to him, tilapia produced for export come with quality guarantees and are cheap \u2013 a frozen tilapia bought on an ecommerce site costs around 32 to 40 yuan (US$4.50 to 5.60) per kilo; and while Chinese people traditionally prefer fresh fish, younger consumers are more accepting of frozen varieties.<\/span><\/p>\n

The last two years have seen China\u2019s aquatic imports <\/span>grow<\/span><\/a>, while traditional exporters have been expanding domestic sales. Zhanjiang Guolian Aquatic Products, a BAP-certified firm, saw 50% of its sales take place within China in 2019, up from 20%. Company head Li Zhong <\/span>said<\/span><\/a> in an interview in late February that this trend would continue in 2020.\u00a0<\/span><\/p>\n

In 2016, China\u2019s product quality authorities encouraged food exporters to use the <\/span>same production lines and standards<\/span><\/a> for their domestic products, in an attempt to boost the quality of food sold in China to match exported equivalents. This will encourage all firms to adopt better standards and practices and improve the industry overall, which Zhou Qinfu thinks will help better the quality of domestic aquaculture products.<\/span><\/p>\n

With thanks to Qingdao Marine Conservation Society for its assistance with the research for this article.<\/span><\/i><\/p>\n","protected":false},"excerpt":{"rendered":"

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