Chinese tilapia prices dive with US buying 'done' : Dec 10, 2018
Louis Harkell: UnderCurrentNews
US tilapia importers’ rush to buy in stocks of Chinese tilapia prior to implementation of 25% import tariffs on Jan. 1 could leave them a tad exposed as prices fall in China and the US White House delays its proposed tariff hike by two months.
Just over a month after farmgate prices jumped in China on the back of US-led demand, prices in Zhanjiang, Guangdong province, have fallen from CNY 9.50 per kilogram ($1.37/kg), 500-800g sized-fish, to CNY 8.40/kg as of Dec. 9, according to Undercurrent News’ price dashboard.
In Hainan, where the tilapia industry is heavily reliant on exports, prices have dropped to CNY 8.0/kg for 200-250g fish, according to Undercurrent sources, while prices for these sizes have fallen below CNY 8/kg in Zhanjiang.
Chinese whole live tilapia, Zhanjiag
Reliably stable Chinese tilapia prices are in flux amid the uncertainty provoked by the US-China trade war.
Volatility occurred when US importers plunged into the market in September and October, to ensure their orders with Chinese processors would be fulfilled and shipped to the US before Jan. 1. Back then, US president Donald Trump’s administration said it planned to implement imports tariffs of 25% against $200 billion worth of Chinese imports, up from a 10% rate currently.
“All the factories were rushing out shipments before the end of Nov. 30,” Landy Chow, general manager at Siam Canadian China, a frozen food supplier, told Undercurrent. “Both the importers and the packers assumed the US would apply an additional 15% tariff by Jan. 1,” he said, a matter which was confirmed by several other industry sources at the time.
Time to buy?
But on Dec. 1, the White House said it would delay its proposed tariff program by two months. Meanwhile, on its website, Siam Canadian Group said Dec. 6 tilapia raw material prices were “dropping sharply”.
It reported a farmgate price of CNY 8.60/kg in Zhanjiang as of Nov. 30.
“I did see some inquiries for breaded shrimp this week, which is similar to tilapia [in terms of its market base]”, Chow said.
“Some importers who were taking a wait-and-see stance in the past might buy some loads now,” he said.
But, with the majority of US business now “done”, he said, and harvesting set to slow over the winter while large-sized fish become more scarce, it seems unlikely there will be another surge in US buying, at least in the meantime. Meanwhile, those US importers sitting on higher priced product may chalk this one up to the unfavorable trade environment.
Impact so far on US imports limited
Despite trade issues, so far this year US imports of Chinese tilapia have been relatively strong.
According to latest trade data by the National Oceanic and Atmospheric Administration (NOAA), the US imported 8,225 metric tons of tilapia fillets from China worth $28.3 million in October.
Though down from 9,905t worth $34.7m in September, this was similar to the monthly average so far this year of 8,943t.
However, October’s monthly imports were down significantly compared with the biggest month so far this year in terms of imports, which was January, when the US imported 12,491t of frozen fillets worth $43.7m.
In the first ten months of this year, total imports of all Chinese tilapia products (frozen fillets, whole tilapia) amounted to 106,210t worth $333.1m, according to data from NOAA, down slightly from 108,825t worth $349.0m over the same period in 2017.