November 4-6, 2015    Qingdao International Expo Center, Qingdao, China

Crackdown on smuggling, international market keeps premium seafood prices high in China

SEAFOODNEWS.COM  [CAPMA] Translated by Amy Zhong - Oct 22, 2014

Some Chinese consumers have wondered why premium seafood prices for lobster, crab and geoduck have remained high, despite the widespread crackdown on corruption called the  “eight rules” which has limited government bureaucrats access to expensive meals. In Fuzhou, it seems that paying international prices, a crack down on smuggling, and strong consumer demand have all contributed to keeping seafood prices high.
    “Why is the price of high-end seafood still so high with the announcement of President Xi’s “eight rules”? For example, the lobster price is close to 300 yuan/jin (1 jin = 0.5 kilo)”, said Wu, a confused consumer from Fuzhou, Fujian to the reporter from Strait News. Yesterday the reporter paid a visit to the local market and found that the prices of imported high-end food are in accordance with the international market situation. 
The output of such expensive seafood as lobsters and geoducks this year is similar to those of the previous years, but there is a great decrease in the smuggling of these seafoods and an increase in the transportation cost, which have led to the high prices of these seafood tems.
The current prices of some expensive seafood increased by 10% compared with the same period last year. 
“Take the lobsters transshipped from Moscow weighing at around 1.1 jin each, for example. They were priced at around 200 yuan/jin about half a month ago, but now the price is 280 yuan per jin” ($46), said some seafood wholesalers from Xiyingli wholesale market of Fuzhou yesterday. This means that the price of Moscow’s lobsters has increased by as much as 40% during the past few days.  

Further research in the wholesale market reveals that the prices of spiny lobsters and rock lobsters have both increased greatly recently. The spiny lobsters (around 1.1 jin each) from such areas as Vietnam and Thailand were sold at about 150 yuan/jin half a month ago, but now their price is 230 yuan/jin ($37) an increase of about 50%. And the rock lobsters weighing at around 2 to 3 jin each were priced at about 250 yuan/jin a few days ago; however, their price reaches as high as around 280 yuan/jin at present, an increase of over 10%.  
 “During the National Day, the number of wedding parties peaks all over China and lobsters are almost indispensable in these expensive parties, which contributes to the fact that the lobster price has been on the rise with the coming of the holiday”, said the wholesalers. And the great increase in lobster prices results from high demand in the holiday. 
Gong is a wholesaler in the market and he sold about 2 to 3 thousand lobsters yesterday, while he is used to selling only about 200 to 300 lobsters on a daily basis.   
The price of imported seafood is responds to the international market situation. 
Although some seafood items have decreased in price with the publication of “eight rules”, such high-end seafood as lobsters and geoducks have stayed high priced. Take the lobsters from Moscow for example. Their price was about 250 yuan/jin last year, but now they are sold at 280 yuan/jin. Although the geoduck price has declined from 150 yuan/jin last year to the current 130 yuan/jin, their price is still high compared with most seafood. What’s more, the price of imported groupers is as high as around 100 yuan/jin. Faced with this situation, some consumers doubt that these seafood prices will stay this high with the restaurant demand for high-end seafood decreasing owing to “eight rules”.  
“Most high-end seafood items have been imported currently, so their prices are influenced by the international market situation”, explained the wholesalers. These imported seafood items include such high-end seafood as lobsters from Moscow, Japanese spiny lobsters, rock lobsters, American lobsters, geoducks and Miniatus groupers. The outputs of these seafood are close to those of last year and the importers have bought the seafood from suppliers at the similar prices to the previous years. 
However, with customs becoming stricter about smuggling this year than in the past, the lobster smuggling volume has dropped, which keeps the lobster price high. And other costs such as transportation have increased, which is also an important factor keeping the prices of some imported seafood high. 
In another example of expanding demand, the sales channel for live crabs from Indonesia has opened further.
Indonesian green crabs are accessible to the consumers in Fuzhou more conveniently now than in the past. 
The import of Indonesian green crabs has increased from the previous three times per week to the current 2 to 3 lots every day. And Fuzhou Changle International Airport is the main channel for the import of aquatic products in Fuzhou. Yesterday the reporter has learned that these green crabs used to be imported to the ports in Shanghai and then transferred to Fuzhou, and it took about 23 hours for these crabs to leave their hometown and enter the Fuzhou market. However, now the crabs can be transported to ports in Fuzhou directly without any transfer. With the crabs passing customs’ inspection rapidly, they can enter the Fuzhou market within three hours after they left their place of origin and the local consumers can buy the live crabs in a convenient way. 
It has been learned that over 1,700 tons of green crabs have been delivered from Indonesia to Fuzhou’s ports directly during the past year, while these crabs used to have to be delivered to Shanghai and then transferred to Fuzhou. 
It has become more convenient for Fuzhou to import green crabs from Indonesia now thanks to the starting of a passenger route between Fuzhou to and from Jakarta last September as well as the green transfer channel through Hong Kong effective since last December. Fuzhou has received about 677 batches of Indonesian green crabs with a total weight of 1,716.4 tons and a value of US$12.187 million within one year after the Fuzhou Airport Entry-Exit Inspection and Quarantine Bureau started the import business of these crabs. Although the customs value of these crabs is about US$ 3.55 (about 20 yuan) per jin, the retail price reaches about 50 to 60 yuan/jin or even close to 100 yuan/jin sometimes. 

Sea Fare's China Fisheries and Seafood Expo now 2nd largest global seafood trade show


The China Fisheries and Seafood Show, which will open in Qingdao this year on November 5th, is the now the second largest seafood exhibition in the world, after Diversified's European Seafood Expo.

According to the overseas organizers, Sea Fare Expositions, the show sold out again this year even after adding more halls and national pavillions.  Total exhibit space is now over 25,000 suqare meters, and 25,000 visitors are expected from over 100 countries.  

A number of Dutch Seafood companies will have a pavillion at the show for the first time.  Read More

Sea Fare says that China's soaring demand for imported seafoods is fueling this growth, and this is born out in discussions with companies who will have representatives at the show. They will be gauging Chinese demand this year for such imported products as salmon, lobster and crab.

“For the foreseeable future China will need a lot more seafood to meet its demand,” says Peter Redmayne, President of Sea Fare Expositions. “One of the more exciting trends is that Chinese companies are using ecommerce to sell imported seafood directly to consumers. China’s ecommerce sales dwarf that of the U.S. and this gives Chinese consumers an alternative to ordering seafood at high-priced restaurants.”  
He also notes that 100 million Chinese tourists are now traveling abroad each year and when they eat out they acquire an appetite for seafoods they also want to be able to enjoy back in China.
Last year China’s reported seafood imports reached $8.6 billion, an increase of about 10 percent over the previous year. The actual value of China’s seafood imports is much higher, however, as large volumes of imported seafood enter the China market through Hong Kong and Vietnam and are not reported. 

US lobster exports to China continue surge through August

October 15, 2014, 5:17 pm

Year-on-year US lobster exports to China continued surging in the first eight months of the year while exports of the shellfish to Canada dropped markedly.

Exports of lobster products to mainland China jumped 79% y-o-y to 2,858 metric tons from 1,597t while exports to Canada dipped 27% to 9,701t from 13,372t, US National Marine Fisheries Service data show.

Overall lobster exports were down 3% to 23,222t from 23,976t.

In a similar fashion to January-July data, figures from the most recent period showed rising exports to China helping keep overall lobster export declines in check.

China’s burgeoning middle class is helping boost sales to the nation, as demand in Asia has put upward pressure on prices.

Even though overall lobster exports are down this year through August, the dollar value of those exports has risen 17% to more than $310 million from $264m last year through August.

Lobster rices in the month to Oct. 3 have risen around $1 a pound, in part on strong demand during some recent Asian holidays Undercurrent Newshas previously reported.

Thanks to rising demand in China, where the American lobster market is increasingly competitive, Zhangzidao Group is seeing a 10% increase in lobster sales this year over last year.

In July, the Dalian-based group sold 6,000 Boston lobsters, at 9,000 pounds, in three days during a sales event on Chinese e-commerce giant Alibaba.

The company has been gearing up for China’s annual online shopping bonanza day — Nov. 11 — when it will launch its “One million lobsters” sales event.

In 2012 and 2013, high harvests helped push prices to historic lows, opening up markets not only in the US but also in Asia, Undercurrent has previously reported.

China seafood leader sees ‘infinite’ opportunity in domestic e-commerce

October 6, 2014, 6:13 pm

The perhaps still opaque and mysterious growth opportunities of the web are clearly no such thing to Dalian-based Zhangzidao Group, which managed to quadruple its online seafood sales in China this year through September, year on year.

Zhangzidao, which saw sales of RMB2.6 billion ($423.4 million) last year and is one of China’s largest seafood companies, is seeing e-commerce grow by far faster than any other segment, Jiu Chang, manager of the overseas enterprise management department, told Undercurrent News.

According to Jiu, China’s online sales for seafood are set increase by 106% this year over last year.

As for Zhangzidao, the increase looks poised to be even stronger, as the company has sold as much online in the past three months as in the whole of last year.

“I cannot predict the future increment because the future for e-commerce is infinite,” executive vice president, Chunlei He, told Undercurrent. “All I can tell you is our sales from July 7 to the present equals the total sales online in 2013.”

July 7 is when Zhangzidao added the e-commerce group Water World (Shanghai) Internet Technology Ltd to its list of 22 other subsidiaries.

That same month, it sold 6,000 Boston lobsters, at 9,000 pounds, in three days during a sales event on Alibaba, the largest e-commerce site in China and by some reports the world.

Since the launch, Water World has grown from 14 employees to 40 as seafood commerce is taking off.

Yet even He — whose 56-year-old company Zhangzidao has more than 4,000 employees and 18 branches — describes e-commerce as irresistible yet tough.

“Online sales are a trend, and we just have to accept that,” He toldUndercurrent.

Delivering products such as live crustaceans — often from the shores of North America 7,100 miles away — to Chinese consumers’ doorsteps is no easy feat.

“Live and fresh sales online are facing the difficulties of logistics, lack of standardization and consumers’ trust,” He said. “We understand it must be a difficult path, but we are ready for it.”

Meanwhile, Alibaba, a key sales platform for Zhangzidao, has quickly grown to have larger sales than both Amazon and Ebay combined, according to media reports, and debuted to US stockholders with the largest IPO ever in September.

The day of the launch, Alibaba founder Jack Ma cited seafood in a Bloomberg interview as an important category for US sourcing.

Zhangzidao’s success is symbolic of such stories cropping up throughout China. Another is gourmet foods supplier Yiguo, which expects to double its sales to $100m this year as seafood keeps pace and becomes a major category.

Gearing up to ‘One million lobsters’ sale

The company is gearing up for China’s annual online shopping bonanza day — Nov. 11 — when it will launch its “One million lobsters” sales event.

Last year, total Tmall sales on Nov. 11 were RMB 35 billion, and customers spent $500 million in the first 20 minutes alone, according to Tech in Asia.

Events such as these — called pre-sales — make up 10% of the company’s overall online sales currently, while ongoing online sales make up 90%.

The company is not only selling through Tmall but also through Jingdong, YHD, Shunfeng and other e-commerce sites. It also is developing its own mobile e-commerce platform by selling on a We Chat shop — a mall-based mobile internet application.

This is a relatively small portion of sales for the company but it has rapidly become a major focus as online sales in China have taken off.

Sudden growth

Zhangzidao first heard in March of 2013 that Tmall had a professional buyer in the United States to purchase seafood, and the wheels started turning.

At that point, it had already established its e-commerce subsidiary, but without big hopes. The only reason for the initial launch was because the traditional model had been crushed by online sales, He said.

Then, the company heard that an American agriculture trade agency’s seafood promotion online sold 37,759 order in 12 days, and it started to get more aggressive on its online sales venture.

The company launched its new “live fresh delivery” concept through its e-commerce department in January of this year, and by March, it was selling about 20 orders per day with 100% satisfaction from customers. The latter achievement is particularly important, considering online ratings can make or break a seller. On Tmall, for instance, sellers get kicked off if their ratings slip too low.

Today, It delivers its own live products — both domestic and foreign – from Dalian to its holding facility in Shanghai, then works with both Shungeng and Logistics, as well as Alibaba, on logistical issues. Alibaba logistics subsidiary Cainiao then helps the company with the last kilometer of delivery through the streets of China.

Booming e-commerce industry beckons

For Zhangzidao, backed by $5 billion in assets, the potential of e-commerce far outweighs these risks of negative consumer reviews and logistical hazards, He said.

Total online sales for fresh products — such as meat, vegetables and seafood and live seafood — in China were RMB5.9 billion in 2013, an increase of 138.5% since 2010 and 2013 and 40.7% since 2012, according to He, citing iResearch Group, which specializes in in-depth research on China’s internet industry.

Overall e-commerce now makes up 90% of total business to consumer market in China, according to ATKearney, a global management consulting firm.

Of course, perishables are not quite keeping pace, but whether the space will continue growing is not a question in He’s mind.

“The percentage of people who shop online will become more than ever in the future, especially in the live and fresh business,” he said.

On the flip side of the logistical challenges, He notes that e-commerce offers “huge advantages” to the consumer, such as time and location.

“For the young generation, online shopping has become their life style, and people are getting used to the efficient and quick online shopping without time and location restrictions,” He said.

“There is something we must understand that online sales have given us the chance to face all the consumers directly by optimizing the supply chain. It has changed our business model.”

Seafood News Index