Chinese shrimp industry: volume sales boosted by weaker prices

Chinese shrimp sales increased during the first half of the year to key export markets such as the US and Japan. In the domestic market where shrimp is one of the most popular seafood products, retail sales are reported to be buoyant as falling prices boost demand. The SARS crisis has, however, adversely affected domestic catering sales and no growth is evident in this segment so far this year.

Progress in domestic shrimp production:

Despite disease outbreaks during the early 1990's, Chinese shrimp farming has progressed significantly over the past decade. Cooperation between industry and research sectors has led to the emergence of more disease resistant species as well as to a more general recovery in the shrimp farming industry. P. vannamei is one of the successful species currently farmed in China and now accounts for an estimated 50% of current marine shrimp aquaculture production (some 380 000 MT last year and 300 000 MT in 2001). Production of more traditional species such as P. japonicus, P. merguiensis, P. monodon etc has been relatively stable while output of M. rosenbergii as the major freshwater species decreased from128 000 MT in 2001 to 114 000 MT in 2002. Marine shrimp capture is stable at around 800 000 MT a year.

Chinese retail consumption boosted by falling prices:

The fall in shrimp prices over the past year or so has meant that shrimp consumption is now within the range of a larger consumer group in China. Shrimp prices are reported to have generally declined in the domestic market by 30 - 50% over the past 18 months. The ex-farm price for P. vannamei fell from Yuan 50/kg to Yuan 28/kg in Fujian Province while P. japonicus went from Yuan 120 to Yuan 70/kg in Shanghai.

With SARS restricting growth in the catering sector, retail sales, boosted by falling prices, have been the main growth segment in the home market. Notwithstanding this growth, domestic demand for shrimp remains seasonal with consumption peaks around festive and holiday periods.

Increased volume exports to the USA this year:

Despite the imposition of the EU import ban on Chinese seafood in 2001, shrimp remains a key product category for China in international trade. Indications for the first half of 2003 point to a growth in Chinese exports to key non EU markets. China was the second largest supplier of shrimp to the US market in 2002 with sales of just under 50 000 MT. US shrimp imports from China for the first 5 months of this year are showing a 55% increase in volume terms compared to the same period in 2002 although it looks as if China will loose its second ranking position to Vietnam.

Source: National Marine Fisheries Service

In the Japanese market, frozen shrimp imports from China are up almost 7% to 7 300 MT for the first 6 months of 2003. China was the fourth largest supplier to Japan last year with just under 20 000 MT and on current figures it looks as if it will retain this position for 2003 as a whole.

On the import side, China is also active with volume purchases, mainly of P. monodon and coldwater shrimp, at
67 000 MT last year. Indications from Chinese import figures for the first 5 months of this year suggests some stablility although the main import period is during the second half of the year.

Outlook:

The general outlook for Chinese shrimp consumption is positive although the SARS effect continues to create uncertainty in the catering segment. On the production side, government action on quality and food safety is a key priority and current efforts are directed towards restarting export sales to the EU. Chinese shrimp farmers, however, remain cautious regarding disease incidence and market instability. A reported orientation towards the production of smaller size shrimp is one result of this situation.