“Ecological zone” edicts stunt China’s aquaculture production

China’s push to improve its domestic environmental standards while investing in higher-value aquaculture projects – increasingly offshore – is now being seen in its aquaculture production statistics.

China’s aquaculture space shrunk by 1.02 percent year-on-year in 2020 to 7.036 million hectares, with marine aquaculture space rising – into which China has placed increasing interest and resources – by 0.17 percent to 1.99 million hectares, and freshwater acreage dropping by 1.48 percent year-on-year, according to a new report published by China’s Ministry of Agriculture.

The sharpest contraction was in waterways like rivers and lakes, and the total acreage of earthen ponds used for aquaculture shrunk 0.73 percent. This is in line with China’s stated plans to reduce the quantity of its aquaculture footprint while focusing instead on water quality and environmental sustainability.

The figures may contract more sharply in 2021 with a further tightening of the enforcement of environmental regulations in Guangdong Province. Aquaculture farmers were forced to shut down this summer when the key aquaculture region of Maoming reclassified Shuidong Bay on the South China Sea as an ecological zone. A similar reclassification occurred in Zhanjiang, a key shrimp producing city that is home to Guolian Aquatic and other large shrimp-trading firms. The reclassification comes with higher environmental standards, backed by inspectors from the central government.

Despite the shrinking acreage of its aquaculture footprint, China’s output nonetheless increased last year. China’s aquaculture production rose by 2.86 percent to 52.42 million metric tons (MT), leading China’s seafood output to reach 65.49 million MT in 2020, an increase of 1.06 percent over 2019, according to the recent Agriculture Ministry document. Following a nationwide crackdown on overfishing over the past few years, including fishing moratoriums and aggressive policing, China wild-catch output shrank 5.4 percent to 13.24 million MT. China’s distant-water catch, however, rose by 6.7 percent year-on-year in volume terms to 2.31 million MT, accounting for 3.54 percent of the country’s overall seafood output, according to the ministry.

The country’s per capita seafood output dropped by 0.13 percent or 0.06 grams, according to the ministry – signaling that China’s seafood demand may continue to outstrip national supply. Exports at 3.81 MT dropped 10.6 percent in volume last year while also dropping 7.8 percent in value to USD 19 billion (EUR 16.1 billion). Import volume at 5.67 million MT worth USD 15.5 billion (EUR 13.2 billion) were down 9.3 percent and 16.7 percent year-over-year respectively.

The data also highlights greater demographic change in China where labor prices have surged as the working population shrinks. According to the report, China’s “fishery industry population” shrunk by 5.8 percent in 2020 to 1.07 million workers, continuing a trend seen over the past decade as China’s labor costs have risen and its workforce aged.

The numerous trends affecting the seafood industry in China are being exacerbated by the COVID-19 epidemic, according to Didier Boon, director of Beijing-based seafood trader East China Seas. And climate change is a further factor accelerating the change hitting China’s aquaculture sector. Dryer weather in the first half of 2021 in southern China meant many ponds could not be used, according to Boon.

Falling domestic output may further squeeze China’s already tight supply of seafood, as China’s international seafood suppliers are being squeezed by the trade disruptions caused by COVID-19, Boon told SeafoodSource. Supply from Latin America – and particularly from Ecuador – has tightened. Ecuador’s seafood shipments to China dropped by 22 percent to USD 896 million (EUR 761 million) in the first half of 2021, according to preliminary customs data. Shipments from Russia have dropped by 24 percent to USD 774 million in response to China increasing the frequency and thoroughness of its inspections of imported Russian seafood due to concerns over COVID-19.

Vietnam and India have also run into difficulties supplying the Chinese market due to COVID-19. Vietnam’s exports began to slow in the latter half of 2020 due to strict measures imposed by Chinese authorities on import cargoes. A similar crackdown on Indian imports have cut down on the South Asian country's total shipments to China. Plus, severe COVID-19 outbreaks in both countries have hampered their production.

“China gets a lot of raw material from India and Vietnam, but COVID [outbreaks] in these producing countries have closed many factories,” Boon said.

Inbound shipments meanwhile are being backed up by Chinese government inspections of “each and every container for traces of COVID-19."

“Hundreds of containers are stuck in harbors unloaded. Not to mention the cost of transport, which is skyrocketing,” Boon said.

As a result of these numerous factors, Boon said he expected seafood prices to remain higher than normal until the summer of 2022.

“In China, we expect more production in August and September, but it will be very difficult for factories to create stock that could last until next May or June, when new production will come,” he said.

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