The China export game - how NZ's largest market held up in 2020
Friday 27 November 2020
New Zealand Trade & Enterprise (NZTE) has just released analysis of New Zealand’s seafood exports into China during the upheaval of COVID-19 and it has concluded that 2 separate waves of the outbreak hit seafood – but New Zealand was mostly impacted by the earliest.
The first wave affected fresh, live and chilled product and with 99 percent of New Zealand rock lobster going exclusively into the China market had the largest impact. From January to October 2020, food service consumption also dropped 21 percent, compared to 2019. And expenditure by the Chinese on premium seafood took a hit as well.
Interestingly, China increased its imports of seafood from Southeast Asia and Ecuador during COVID while countries seen as offering premium product from “clean” waters such as Norway, Canada and New Zealand all decreased. However, with the food service sector recovering, the market in premium product is expected to increase as high-income consumers seek high quality dining experiences again.
China imports only 6 percent of its seafood, with the other 94 percent being domestically produced and New Zealand’s share of that 6 percent is just 1.6 percent in volume but 2.7 percent by value.
Some 35 percent of New Zealand’s seafood is exported to China, making it New Zealand’s largest market and it is not just rock lobster.
Some 18 percent of our mussels land in China, as does 50 percent of our squid, 24 percent of our mackerel, 19 percent of our hoki, and five percent of our salmon.
By September this year, exports of New Zealand rock lobster into China had declined 17 percent by volume and 31 percent by value. However, while the price of a New Zealand rock lobster in China declined 17 percent, the US$67/kg the lobster was fetching was still the highest price China was paying for imported lobster.
Mussels fared better during COVID, with only a slight decline during the first quarter of 2020 and a fast recovery in the second and third quarters. Squid, mostly consumed in Chinese restaurants took a hit, with a 33 percent decline.
Paua, while a small exporter to China, decreased 28 percent to reach US$4.1 million but was totally eclipsed by Australian imports of abalone into China of US$43 million.
Fish continues to be impacted, with fresh more so than frozen but salmon bore the brunt. It has been the most impacted and least recovered. New Zealand fish in general dropped seven percent in volume and 11 percent in value but salmon dropped 35 percent in volume and value. Having said that, once again the quality of New Zealand seafood protected it from some of the impacts, with salmon, like rock lobster retaining a premium at US$15.8/kg, the highest of all salmon imports into China.
China has increased level of inspection on goods entering the country and NZTE's report suggests both the percentage of goods sampled and tested across multiple entry points in China have resulted in increased delays in clearing goods.
The report says that before the pandemic, an average of eight items were sampled per container and that has now increased to as much as 30 percent being sampled.
But, despite the challenges of 2020, the outlook for seafood into China remains positive.
The report concludes that, due to the production constraints caused by a greater focus on sustainability in China’s domestic aquaculture regulations, it is unlikely China can live without imported seafood through 2029.
And that is good news for New Zealand seafood exports.
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