Currency, political woes weaken seafood export earnings in China
One of China’s leading seafood-producing regions has reported a surprise drop in export earnings in…One of China’s leading seafood-producing regions has reported a surprise drop in export earnings in 2013. The southeasterly province of Shandong — home to processing and aquaculture hubs including Qingdao and Yantai — reported that while total trade volume (export and imports) was up 0.6 percent to 2.94 million metric tons (MT), in value the region’s seafood trade slipped 2 percent to USD 7.29 billion (EUR 5.4 billion) last year.
Data released by the provincial Ocean & Fisheries Bureau shows China’s seafood exporters struggled in traditional markets like Japan and the EU while shipments to the U.S. and Korea grew. Sales to the EU, the number two market for Shandong seafood, fell 2.5 percent year-on-year to USD 1.03 billion (EUR 760 million) while the U.S. accounted for USD 580 million (EUR 428 million), up 1.2 percent compared to 2012. Nearby Japan and Korea meanwhile proved a mixed bag with sales to the former down a worrying 8.9 percent to USD 1.8 billion (EUR 1.3 billion) and shipments to Korea climbing 5.4 percent to USD 400 million (EUR 295 million).
A sign of the challenge of the continued strengthening of the Chinese CNY currency against the dollar: the province’s foreign currency earnings from seafood exports totaled USD 4.7 (EUR 3.7) in 2013, down 3.9 percent year-on-year. Not surprisingly, China’s government has been trying to increase the percentage of overseas trade done in the CNY, which remains however a non-convertible currency.
A “volatile” exchange rate system was one of several reasons detailed by the Ocean & Fisheries Bureau. In a statement the bureau also blamed rising labor costs in Shandong, falling demand and the “recent regional political situation” — without elaborating. The weak Japan export data could be taken as proof that tense political relations with Japan are negatively impacting exports for cities like Shandong and Yantai which are less than two hours flying time from both Tokyo and Seoul.
Pledging to help improve on last year’s data in 2014, the government-run Ocean & Fisheries body pledged to improve information flow among seafood producers, processors and exporters while also guiding the restructuring of the sector. It also pledged to help exporters find new markets.
Chinese government data such as export totals tends to err on the optimistic to bolster the records of local political bosses. The proximity to Japan and Korea may indeed prove a weakness for Shandong’s seafood sector. A stronger 2013 performance meanwhile was reported by regions further south.
The port city of Ningbo in Zhejiang province this week reported exports of aquatic products totaled 141,100 MT, worth USD 581 million (EUR 429 million), an increase of 9.36 percent and 16.04 percent, respectively. Frozen fish accounted for 67 percent of exports for Ningbo, which has recently been trying to establish itself as a major tuna-canning hub.
While the Japan and the U.S. remain the city’s top two markets for seafood exports, diversification appears to have served Ningbo well.
“The U.S. market has improved but our real focus now is on finding new markets in Southeast Asia, like Malaysia and Indonesia, as these are fast growing economies without a major seafood processing sector of their own,” said Liu Meng, an official at the local office of the China Council for the Promotion of International Trade.