Tilapia prices fall in China as US postpones 25% tariffs : Feb 28, 2019
Louis Harkell: UnderCurrentNews
Tilapia prices are once more dropping in China after US importers built up stocks ahead of expected 25% tariffs on March 1, industry sources in China told Undercurrent News.
Prices have fallen to CNY 8.40 per kilogram ($1.26/kg) for 500+ gram fish, farmgate, in Hainan province, south China, a source at a large tilapia farming company told Undercurrent, and could fall to CNY 8.20/kg by next week.
In the short-term they could stay low or fall even lower by the end of April, he said.
Prior to Chinese New Year farmgate prices in Hainan were around CNY 8.40/kg, according to local industry media.
It takes 20-40 days for containers to arrive in the US (depending on port of arrival) after departing from Chinese ports. On Sunday (Feb. 24) president Donald Trump said the US would postpone implementing 25% tariffs, six days before March 1, giving US importers no time to adjust buying. Trump also postponed 25% tariffs in early December.
“US importers increased inventory levels in order to avoid [president] Donald Trump’s 25% tariff,” said the source. “If US buyers are still relying on current inventories raw material prices will likely remain at CNY 8.20/kg — or even lower — by the end of April.”
The source, who wished not to be quoted by name, added raw material supply is stable and currently factory workers are returning to work in Hainan relatively slowly following Chinese New year, contributing to a softening of prices.
Landy Chow, general manager at Siam Canadian China, a frozen food supplier, agreed that US importers covered their needs for February to April prior to Chinese New Year, but said demand tends to be low in this period anyway.
He quoted farmgate prices of CNY 8.80/kg (500g fish) in Zhanjiang, a county in Guangdong province.
Previously, Chow said processors in Guangdong might truck in tilapia from Hainan due to better availability and price at this time of year on the island compared with the mainland. Hainan is a short distance away from Zhanjiang by ferry.
He added delaying 25% tariffs is “good news” for US importers and also for Chinese tilapia packers.
According to an Undercurrent industry poll of 14 Chinese industry members, a majority believe Chinese tilapia prices will rise in 2019.
Seven said they reckon tilapia prices would “rise slightly” in 2019, while two said they would “rise a lot”. Only three said prices would be stable with 2018, while two thought prices would fall.