China's International Seafood Trade

 

China is the largest seafood producer in the world, by a wide margin. According to the Food and Agricultural Organization (FAO) China produces 58 million metric tons (MMT) of seafood, or 36 percent of the world's total seafood production ��� 29 times more than Alaska. Most of that volume goes to feed the 1.3 billion people who live in China, but as many in the seafood industry know, China is a major seafood re-processor for imported seafood as well. In this bulletin, we use trade data to explore China's seafood imports and their seafood exports.


As a first crack at deciphering Chinese trade statistics, this bulletin is not intended to fully track all species into and out of China. In some cases the figures presented here may present more questions than answers.

 

What Goes into China

China has imported 2.20 to 2.37 million metric tons (MMT) of seafood in each of the past three years for which we have data [1] (2007-2009). The volume of imports has been relatively flat in recent years, correlating with the flat capture production in worldwide fisheries. The majority of seafood imported into China is wild-caught, not farm-raised.

 

 

Whitefish into China

Imports of pollock and other whitefish [2] amounted to 1.36 MMT and made up 60 percent of the total import volume in 2009. Nearly half of all imported whitefish is Russian pollock. Chinese processors are the primary buyer of Russian pollock, and until recently, the only significant buyer. Russia's domestic market has taken more volume in the past few years because food prices have risen dramatically in Russian and pollock is a relatively inexpensive source of protein.

 

In contrast, Alaskan processors ship relatively little pollock to China for reprocessing; less than 57,000 metric tons in 2010. Much of that volume was already filleted, whereas pollock from Russia often arrives in headed-and-gutted form. In the case of Russian pollock, it must be defrosted, filleted, packaged, and then re-frozen as opposed to pollock sourced from Alaska which is "once-frozen."

 

Flatfish into China

China imports roughly 150,000 MT of flatfish per year. Nearly half of that tonnage comes from Alaska. Various types of sole are the primary flatfish species exported, however those fish are often classified with a HS code identifying them as plaice when they enter China.

 

Salmon

China imported 204,000 MT of wild salmon in 2009. Russia and Alaska accounted for 75 percent of that volume, with Japan supplying mot of the remainder. Alaska salmon exports to China increased 17 percent in 2009, but Russian salmon exports to China increased 245 percent (from 23,600 MT in 2008 to 81,700 MT to 2009).


That spike in trade is a direct result of Russia's record-setting 2009 pink salmon harvest, which increased from 164,000 MT in 2008 to 421,000 MT in 2009. It's unlikely that level of trade will be sustainable in the near term for Russia and China; imports of Russian salmon to China fell to 38,100 MT in 2010 as Russian salmon harvests of all species declined from 540,000 MT to 325,000 MT. Russia's pink salmon TAC for 2011 is 264,000 MT.


Herring

China imports a significant volume of herring, on the order of 60,000 MT. In contrast to flatfish, very little of this herring comes from Alaska. The majority of China's herring imports come from Russia, which ships roughly 40,000 MT to China each year.


Alaska-China Connection

 

 

Alaska seafood accounts for 9 to 12 percent of China's seafood import volume each year. From Alaska's point of view, China is Alaska's largest trading partner by volume and second largest by value (unless you count the European Union as one entity). In 2010, a third of Alaska seafood exported abroad went to China.


China is clearly a major export destination for seafood, but it is widely known that China is a large-scale secondary processor and that a substantial amount of the import volume passes through on the way to final markets. The question is: where do fish go after secondary processing in China?

 

 

What Comes Out of China

The U.S. is China's largest market for exported seafood products, followed by Europe and Japan; South Korea and Russia round out the top five. In 2009, China exported 1.95 MMT seafood products to the U.S., European Union, Japan, South Korea, Russia, Canada, Brazil, Singapore, and South Africa. Other significant markets for Chinese seafood may exist, but in many cases there were problems with the data. Nigeria is an example of a country which clearly imports a significant volume, but reporting is too inconsistent to draw any meaningful conclusions about the volume of trade.


China's major export is frozen fillets and portions. Fillet products accounted for 41 percent of all Chinese seafood exports in 2009, and totaled 795,000 MT. China also exports an impressive volume of crustaceans and mollusks, shipping 609,500 MT to the 10 countries covered in this bulletin during calendar year 2009. China has a thriving re-processing sector producing pasteurized crab meat products from live and frozen crab, but the major volume driver in the crustacean and mollusc category is squid.


China exports 287,000 MT of prepared and preserved seafood. This includes smoked, dried, cured, pre-cooked, or preserved offerings of fish and shellfish. Many of the codes in this category are fairly vague about what species is being traded. For instance Japan imported 70,400 MT of "prepared fish, whole or in pieces but not minced, species: other" in 2010. That one code represents 17 percent of the total Japan-China seafood trade volume.

 

 

The original intention of this article was to follow specific species, such as salmon or Alaska pollock, into and out of China. This is possible in some cases, as HS codes exist which identify such species. Unfortunately the level of detail needed to fully track them is freely available only from the U.S., Japan, and European Union. Further analysis of smaller markets would entail substantial data collection costs, yet provide diminishing returns (in terms of data completeness).


Tracking Alaska pollock products was problematic. Different importers and exporters often used different HS codes describing the same product. Coding schemes can change from year to year, which adds to the non-conformity surrounding HS codes and limits the relevance of year-on-year comparisons.


Presented here is brief analysis of broadly defined species categories exported out of China into the U.S., Japan, and Europe Union countries.

 

Salmon Exported from China into U.S., Japan, and Europe

 

 

 

Exports of salmon (mostly wild) out of China increased from 65,400 MT in 2007 to 90,400 in 2010. Exports jumped 23 percent in 2010, which is a direct result of a larger volume of imported salmon hitting China in 2009. Europe and the U.S. are the biggest markets for re-processed salmon, each imported over 40,000 MT of finished product. The vast majority of this salmon is in the form of frozen fillets. In Japan, roe and other preserved product forms accounts for the majority of salmon imported from China.


Whitefish from China into U.S., Japan, and Europe

 


 

Total whitefish[3] exports, including Alaska pollock, cod, mackerel, saithe, haddock, hake, and whiting, out of China to the U.S., European Union, and Japan exceeded 394,600 MT in 2010. Due to the uncertainty surrounding HS codes of fillet products entering Japan we do not know the exact amount total, but the total whitefish import volume for all three countries could be as high as 441,800 MT.


Europe is by far the largest market for whitefish exports and in 2010 European Union countries imported 265,300 MT of various whitefish products. Roughly 90 percent of whitefish exported from China into the European Union consists of frozen whitefish fillet products. The volume of whitefish exports into the European Union grew 3 percent in 2010 versus 2009 but was still slightly below the 2008 total.

 

The U.S. is the second largest market for whitefish re-exported out of China. In 2010, American companies imported 117,900 MT of whitefish. Whitefish exports to the U.S. were relatively flat during the 2005 to 2010 period.


Regardless of the HS ambiguity in Japan, it is likely that whitefish exports from China into Japan declined substantially from 2006 to 2010. Imports of miscellaneous fillet products from China went from 122,700 MT to 47,300 MT during that period and Whitefish roe products (mostly pollock roe) went from 12,100 MT to 6,600 MT.

 

Flatfish from China into U.S., Japan, and Europe

 

 

China imports 150,000 to 165,000 MT of flatfish per year. The majority of these fish enter China as a frozen headed/gutted product. That volume of headed/gutted product should produce roughly 60,000 to 66,000 MT in skinless fillets. The total volume of flatfish imported into major markets from China is much less. Tariffs and value-added taxes on flatfish imported into China for consumption are roughly 30 percent, so it is unlikely that a substantial portion of the total import tonnage is servicing China's domestic market. Available trade statistics from Europe and Japan do not cover flatfish fillets with the same depth as afforded by U.S. trade data. This suggests that a large portion of frozen flatfish fillets exported out of China is exported into Europe or Japan labeled as a general whitefish species, or exported to other countries not covered by these data.


Lessons Learned

China may produce 29 times more seafood than Alaska, but over 80 percent of that production is very different from the species which make up Alaska's fisheries. Because China's seafood production does not include many of the world's more high-value species, they do import large volumes of (mostly) wild seafood from around the world. As long as companies are processing this imported seafood for re-export, there are no tariffs. However, seafood imported into the country which is not bound for re-export often carries a steep tariff.


Some species are easier to track into and out of China than others. Our expertise with the data is still expanding, but in general it is possible to get a broad sense of how much whitefish, salmon, flatfish, and crab go into and out of China each year.

 

[1] 2010 data is not available from all data sources used for this bulletin.

 

[2] Unfortunately, the "Harmonized System" (HS) of codes that applies to all international trade does not do a great job of identifying Alaska Pollock. Even in instances where codes exist, traders often mislabel whitefish or will simply assign it a code designated for "Whitefish, other." Alaska Pollock exported out of the U.S. have a better chance of being correctly classified, however. "Other whitefish" includes hake, whiting, cod, and mackerel.

 

[3] This category does not include tilapia or pangasius.

May 2011������
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