By April 29, 2020 16:21 BST

Even with the collapse of the Chinese economy in the first quarter of the year, China will be a more important market for Ecuadorian shrimp sellers over the next two years, a top trade advisor said.

China will recover from a 6.8% slump in gross domestic product growth in the three months ended March 31 to end at 1.2% growth and then surge 9% next year, said Paul Lam of the China Global Advisory. Europe and the US will barely register positive growth in both 2020 and 2021 because of the COVID-19 pandemic, he said.

That means that China will offer higher growth as a destination for Ecuadorian shrimp than the US and Europe, reaffirming its role as the South American country’s most important market. The government is taking an aggressive role in reactivating commerce and normal activity is beginning to resume in major cities such as Beijing and Shanghai, he said.

“Over this year, as well as next year, China will become more important for Ecuador,” Lam said in a webinar organized by Skretting Ecuador. “Quite frankly, that’s going to be where your growth is.”

Economic growth will likely resume in the second half of the year after another negative growth quarter in Q2, Lam said. The restart of daily life is still cautious because of fears of a second outbreak, he said.

Chinese consumers are potentially more valuable to those in other regions of the world because several hundred million people living in major cities have more disposable income because families live closer together, Lam said. And also Chinese consumers love to spend money on food because it is a symbol of prosperity that arises from the leanest years at the beginning of communism starting in 1949, he said.

One of the main challenges for the shrimp industry is the slow reactivation of the hotels, restaurants, and bar trade. China’s seafood imports slumped 27% in the first quarter of the year compared with Q4 of 2019, according to China’s General Administration of Customs data. One of the key insights to the Chinese consumer is that people in China love shrimp, but they can live without it, Lam said. That’s not the case with rice or pork, he said.

There are still no foreign visitors in China and travel between cities is restricted, which is hurting trade. Also, consumers have grown more used to home cooking and that trend will endure in the long-term, Lam said.

The challenge for Ecuador’s shrimp farmers is how to penetrate the retail sector and especially online sales platforms that are growing quicker than any other channel, Lam said. Chinese online delivery channels are able to deliver food within three hours, which is acting to disincentivize trips to the supermarket, he said.

Ecuadorian shrimp is sold as a commodity with little brand awareness in China, which is a lost opportunity because producers could easily appeal to Chinese consumers with an antibiotic-free message, he said. Lam is a high-profile China trade expert who acts as an advisor to exporters of Chilean wine and Uruguayan beef.

Chinese consumers are using swipe codes and seeking information about food products that they buy, Lam said. Consumers care about food safety after high-profile scares and also view food items such as shrimp as a status symbol, he said.

That said, buying Ecuadorian shrimp is not necessarily a luxury for wealthier consumers in “tier one” and even “tier two” cities, Lam said.

Ecuadorian producers could also explore, besides creating brand awareness, selling more value-added products to China. Products such as shrimp-based won ton and shrimp paste are billion-dollar industries in their own right in China.