The Dragon's changing appetite

30 Pages·2017·2.23 MB·English

The Dragon’s changing
appetite
China’s changing net trade
position in seafood and
implications
Dr. Beyhan de Jong
Reykjavik, November 2017
Rabobank: Globally leading food and agribusiness
lender and financial services provider
46 600 55,000
Countries Over Offices Over Employees
Amsterdam
Utrecht Moscow
Dublin
Calgary St Louis London
Chicago Antwerp Warsaw
Toronto Paris MilanFrankfurt
Cedar Falls
San Francisco New York Madrid Istanbul Beijing
Washington DC Shanghai Tokyo
El Centro Atlanta
Dallas
Delhi Kolkata
Hong Kong
Mexico City Mumbai
Bangalore
Willemstad
Kuala Lumpur
Kigali Malema Singapore Lubuan
Nampula
Ulónguè Jakarta
Beira
Tete
Asuncion Maxixe
Sao Paulo Chimoio Maputo
Buenos Aires Sydney
Santiago de Chile
Melbourne
Tasmania
Wellington
In volume terms China’s seafood consumption
dwarfs that of the western countries
China has a high seafood consumption, estimated at 44 kg per person, which is forecasted to reach 50 kg in 2026
Million tonnes
2006
80
2007
35% of global 2008
70 consumption 2009
2010
2011
60
2012
2013
50
2014
2015
40 2016
2017
2018
30
2019
2020
20 2021
2022
10 2023
2024
2025
0
2026
North America Europe Africa Latin America & Caribbean China Asia excl. China
Source: OECD-FAO, Rabobank 2017 1
But despite the large consumption, China is not
the largest importer of seafood
…while paradoxically marine resource rich countries are the biggest seafood importers
2015 2010 2005 2000
EU-28
USA
Japan
China
South Korea
USD 8,5
Canada BLN
Thailand
Russia
Australia
Brazil
0 5 10 15 20 25 30
USD Billion
Source: UN Comtrade, Rabobank 2017 2
In fact, China is the leading seafood exporter
globally
Relatively resource poor (marine EEZ and grains per capita) China is the world’s leading seafood exporter
2015 2010 2005 2000
China
Norway
EU-28
USA
Thailand • Almost USD 20 BLN
India • Positive net trade position
by more than USD 10 BLN
Chile
• Seafood is the only protein
that China has trade surplus
Indonesia
Ecuador
Russia
USD Billion
0 5 10 15 20
Source: UN Comtrade, Rabobank 2017 3
There are increasing constraints on the supply
side in China …
Domestic supply dynamics
Production cost drivers Environmental regulations
1. Higher cost of labour / lower 1. Decommissioning of inland and
labour availability coastal fleets
2. Disease / pollution pressure in 2. Limiting aquaculture close to
aquaculture urban areas
Source: Rabobank 2017 4
…while the drivers on the demand side
accelerate import demand
Import demand dynamics
Import demand drivers Import enablers
1. Income growth and strong 1. On-line seafood trade
currency
2. Improving logistical infrastructure /
2. Distrust of locally produced urbanisation
seafood (due to pollution and
scandals)
Source: Rabobank 2017 5
Domestic seafood supply to stagnate or
contract
Labor availability and labor cost especially in rural
areas is eroding competitiveness of the seafood
industry in China
Total labor force in China changes per 5 year intervals, declining in 2015
Thousands
20-59 age group
100.000
87.383
80.000 74.432
69.149
62.508
60.000 51.279
46.345 46.836
40.000
16.483
20.000
0
-8.294
-20.000
-29.814
-40.000
-47.638
-60.000
Source: China National Bureau of Statistics, Rabobank 2017 7
Gov. policy on fisheries: Prioritize environment,
fleet and local fishing to shrink
13thNational Five-year plan of China (2016-2020) emphasizes sustainable practices
“…It has become increasingly difficult to develop fishery industry in an environmental-friendly and
sustainableway.”
“…The quality of aquatic products are questionable due to intensified water contamination
and illegal drugs.”
“…We prioritize environment and promote green development. …We will focus on higher
qualityand efficiencyinstead of larger quantity”
”… Domestic fishing goes through negative growth. …national marine fishing fleet is reduced”

Source: Ministry of Agriculture of the People’s Republic of China, Seafood India media 2017
8