Undercurrent News

China’s imports of seafood surged by 35% to $19.13bn in 2022 — a new record that suggests the country’s strict COVID-19 protocols for imports and frequent lockdowns impacted consumption less than thought

By Louis Harkell | April 11, 2023 10:28 BST

China’s imports of seafood surged by 35% to $19.13 billion in 2022 — a new record that suggests the country’s strict COVID-19 protocols for imports and frequent lockdowns impacted consumption less than thought.

The haul eclipsed China’s previous record of $15.8bn in 2019 and followed weaker imports in 2020 and 2021, according to an analysis of Chinese customs data by Undercurrent News and Fan Xubing, the head of Beijing-based Seabridge Marketing.

Seafood import volumes increased by 21% to 4.19 million metric tons, just below 2019’s bumper imports of 4.4m metric tons.

“I’m very surprised. Last year was a really big jump for China, historically speaking, after the correction in 2020, 2021,” Fan, who advises international seafood companies and organizations selling in China, told Undercurrent. “We are still the second largest import country after the US. But in the coming years, I think the Chinese market will continue to increase, whereas I’m less certain about the US market.”

China’s imports grew in each of the four quarters in 2022, while US imports declined in Q3 and Q4, he noted. “I expect in 2023, there will be continued increases [in Chinese imports]. In the first two months of this year, import data was strong, which is promising.”

The impressive showing underlines the robustness of Chinese demand, even when strict COVID-19 protocols for imports and city-wide lockdowns pointed to constrained spending. Sales through wholesale and supermarket channels appeared to decrease, said Fan, but this was offset by higher sales through newer channels like ecommerce, group buying and live streaming.

The return of China’s appetite for seafood imports also puts China on its pre-pandemic trajectory of growth. In 2020, China’s seafood imports contracted by 27% and, despite recovering in 2021, still lagged 2019.

Last year, China’s biggest supplier was Ecuador, with $3.56bn worth of China’s seafood imports supplied by the country, the world’s largest exporter of shrimp. This was up 63% in value compared with 2021. Ecuador was followed by Russia with $2.76bn, up 48% year-on-year.

Other large suppliers were Vietnam, with $1.70bn, ahead of India, with $1.26bn. Canada, a large supplier of American lobster, and the US both saw solid growth to $1.23bn and $1.14bn, respectively. For the US, relief from 30% tariff rates for products processed and re-exported is a major reason for continued strong Chinese imports.

Norway, the world’s second-largest seafood exporter, was surprisingly low in rankings in seventh, largely due to sluggish Chinese salmon imports.

“Top-five countries produce the most important species like warmwater shrimp, pangasius, king crab, snow crab, lobster — key species preferred in China,” said Fan. “So if you want to know the ranking for next year, you have to pay attention to the price of these species,” he said.

Crustaceans king in China

Delving into China’s imports by species, the clear takeaway is the importance of crustaceans to the Chinese seafood shopper.

In 2022, China imported $9.80bn worth of crustaceans — as grouped under the harmonized system codes 0306 and 1605 — an increase of 37% compared with 2021. By volume, crustacean imports increased by 34% to 1.126m metric tons.

“Pay 70% of your attention to crustaceans when analyzing China’s import market,” urged Fan. “Because my observation is even if Chinese seafood imports are increasing, the most important group is crustaceans, such as warmwater shrimp, coldwater shrimp, lobsters, snow crabs, king crab, and all different types of crabs, imports of which are growing even faster.

Last year, China imported $5.65bn worth of warmwater shrimp, mainly farmed, the country’s biggest seafood import by product. This was up 53% in value compared with 2021.

Import volumes grew 43% to 874,000t, by far the highest volume on record for direct imports.

“Shrimp is so popular in China for many reasons,” said Fan. He added that falling China’s domestic production of shrimp had also been a gift to importers. “We are more and more reliant on imported shrimp.”

Another eye-catching shrimp import was coldwater shrimp (HS code 030616). Despite higher market prices, imports of the crustacean increased by 108% in value to $542.6m, while volumes increased 69% to 72,000t.

“Actually, coldwater shrimp performed even better than warmwater shrimp in terms of growth. People like wild-caught; they believe wild shrimp is safer, more nutritious, and delicious,” said Fan. Fan is involved in marketing coldwater shrimp in China through his company’s work with Canada’s seafood marketing board.

Crabs, lobsters

China also imported huge quantities of crabs and lobsters. In 2022, the country brought in $1.30bn worth of live, fresh or chilled crabs (traded under HS code 030633), up 6% compared with 2021. Volumes increased by 7% to 74,597t.

The majority of crabs imported by China were from Russia, which supplied $710m, up 10%. “Last June, the US and Europe banned or placed restrictions on imports of Russian king crab,” said Fan. “After that, I observed more live king crab exports to China and Korea rather than frozen king crab to the US and Europe.”

However, the big increase in Russian supply weighed on prices. “Russian king crab, snow crab and also Russian coldwater shrimp all decreased in price last year. However, a lower price means more value for Chinese, Japanese and Korean consumers, stimulating imports.”

China imported fewer American lobsters, also known as Boston lobster, a rare instance of falling crustacean imports. In 2022, China imported $614.4m worth of live, fresh or chilled American lobster, down 10%, while volumes declined 9% tp 23.431t.

“You have to remember that 2021 was a very good year [for lobster imports]. And last year, the most important market, Shanghai, was in lockdown for two months,” said Fan. He added that in the second half of 2022, lobster imports recovered. “And if you look at the first two months of 2023, lobster imports have recovered further.”

On the other hand, imports of another type of lobster — live, fresh or chilled rock lobster (HS code 030631) — grew significantly. In 2022, China imported $892.3m worth of rock lobster, up 43%, while volumes increased 57% to 16,932t.

Fan had an unusual take on why China’s imports of rock lobster had grown so fast; he said this was due to Vietnam’s burgeoning lobster aquaculture sector; China’s top supplier was Vietnam with $346.5m, up 848% compared with 2021. “That’s the farmed lobster; Vietnam’s farmed lobster aquaculture is growing very fast,” he said.

However, he then revised his assessment, saying it was most likely Australian rock lobster repackaged as Vietnamese after China unofficially banned imports from Australia in November 2020. “This is strange though because usually imports through the grey channel are not recorded by customs,” he noted.

China’s finfish imports

China also imported $5.1bn worth of whole frozen fish, equal to 2.06m metric tons in volume. This was up 45% in value and 28% in volume compared with 2021.

“No matter the increase or decrease of the Chinese import for pollock and cod, cod fish and pollock fish is not really for domestic consumption; 80% or 90% of this fish is imported, processed and reexported,” explained Fan.

Last year, China’s biggest supplier of whole frozen fish was Russia, with $1.78bn, up 71%, while Russian volumes came to 886,000t, up 54%. This followed a recovery after the big decline in imports in 2021 due to strict Chinese COVID-19 customs protocols.

“If China’s pollock imports decreased, Russia exported less quantity of raw material to China; so you should ask Russian people, what they did with this raw material?” said Fan. “Are they processing domestically or are they selling to Poland or some other countries?”

Fan added that neither pollock nor cod had made big inroads into the Chinese market compared with other whitefish species like  Pangasius. “I think it is because marketing for pollock and cod hasn’t been very  good, whereas for pangasius, it has been very good in China,” said Fan.

“If you look at the sour and sweet dishes, the barbecue fishes, at the most popular Chinese fish restaurants, you’ll find pangasius everywhere. But where do you find the cod? Where do you find the mackerel in the Chinese restaurant? There’s very little.”

Salmon market flat

There was also weaker-than-expected growth in China’s imports of salmon. Last year China imported $736.7m worth of whole fresh Atlantic salmon, up 26%. However, import volumes dipped 8% to 49,018t.

He said salmon is “expensive” in China, noting record high prices  combined with airfreight while eating options are more limited than with shrimp. “And if the land-based farm salmon production is only 5% or 10% of the total China market size, even if their price is lower, it still cannot change the whole price structure in China,” he said.

Fan reckoned the most important takeaway from the import data is that seafood exporters reenergize their China campaigns. “Last year, China’s door was half open; very often, you found here and there a supermarket is closed, or a wholesale market is closed; sometimes a whole city was closed last year. Even in that situation, Chinese seafood imports still reached a record high.

“We can say that with the country fully open this year, there’s no reason for China’s seafood imports not to increase. It seems that our economy is not so bad. It’s not so good, but not so bad either.”

China’s market would likely grow faster than the US market. “The US market will still be strong, but I think the US consumers will probably spend less money on high-value spaces like king crab, snow crab, lobster, his kind of species. But in China, I think all different seafood species will gradually increase this year and next year if no big economic change happens,” he said.