Sector Trend Analysis – Shellfish trends in China

Shellfish market and trade

Shellfish China imported from theworld

The seafood market in China is booming with many consumers of shellfish (scallops, oysters, mussels, cuttlefish, clams, snails, octopus and abalone). China's fisheries do not produce enough to supply the domestic market, which makes it an attractive market for international exporters. Canadian shellfish products are considered to be of superior quality, in terms of both product size and quality.

China imported Can$1.6 billion of live, fresh and frozen shellfish in 2018 with a CAGR of 16.2% from 2014 to 2018. In terms of value, Japan was the leading supplier of shellfish products to China, with a 20.8% market share, followed by Indonesia (18.8%) and the United States (15%). Canada was the fourth-largest supplier (6.7%) valued at Can$108.3 million in 2018, almost doubling the 2016 export value of Can$56.5 million and registering a CAGR of 27.2% from 2014 to 2018. Imports from Indonesia had the largest CAGR of 56.8% from 2014 to 2018. Shellfish products are quite popular in the local market.

In 2018, the frozen, smoked, dried, salted cuttlefish and squid group accounted for 42.3% (Can$684.6 million) of China's total shellfish imports from the world. Imports of live, fresh or chilled scallops grew the fastest at a CAGR of 60% from 2014 to 2018.

In 2018, China imported 326,098 tonnes of live, fresh, frozen shellfish. Live, fresh or chilled scallops grew at a CAGR of 49.0% from 2014 to 2018.

In addition to the Can$1.6 billion of live, fresh, frozen shellfish that China imported in 2018, China also imported Can$223.9 million of prepared or preserved shellfish from the world, bringing China's total shellfish imports to Can$1.8 billion in 2018. Prepared or preserved cuttlefish and squid accounted for 70.1% (Can$157.1 million) of China's total prepared or preserved shellfish imports.

China imported 33,190 tonnes of prepared and preserved shellfish from the world in 2018.

Shellfish imported from Canada

In 2018, China imported Can$108.3 million of live, fresh, frozen shellfish from Canada, representing 6.7% of China's total imports globally, and a CAGR of 27.2% from 2014 to 2018. The top three imported products were frozen, smoked, dried, salted clams, cockles and ark shells (Can$58.1 million), live, fresh or chilled molluscs (Can$36.2 million) and frozen, smoked, dried, salted molluscs (Can$7.9 million).

In 2018, China imported 6.2 million kilograms of shellfish from Canada, representing a 32.6% increase from 2017, with a CAGR of 24% from 2014 to 2018.

In 2018, China imported 4.4 million kilograms of frozen, smoked, dried, salted clams, cockles and ark shells which accounted for 69.4% of the total shellfish imports from Canada, almost doubling the imports in 2017. China imported 842,637 kilograms of live, fresh or chilled molluscs and 545,350 kilograms of frozen, smoked, dried, salted molluscs in 2018.

China imported Can$6.3 million in prepared or preserved shellfish from Canada in 2018, with CAGR of 97.5% from 2014 to 2018. Of note, China's imports of mussels and scallops from Canada were intermittent between 2014 and 2018.

The total volume imported to China in 2018 was 482,040 kg, doubling the volume in 2016, with a CAGR of 65% from 2014 to 2018. Chinese customers prefer live, fresh, chilled shellfish to prepared or preserved shellfish.

Canadian provinces' exports of live, fresh, frozen shellfish to China

In Canada, Nova Scotia was the top exporter (Can$68.3 million, 5.4 million kg) of live, fresh, frozen shellfish to China in 2018, followed by British Columbia (Can$31.8 million, 1.2 million kg) and Newfoundland and Labrador (Can$3.2 million, 154,145 kg). Of all the provinces, Nova Scotia's exports of live, fresh, frozen shellfish to China had the largest CAGR of 128.6% in value and 136.5% in volume from 2014 to 2018.

Chinese provinces' imports of live, fresh, frozen shellfish from Canada

In 2018, Shanghai was the largest importer of live, fresh, frozen shellfish from Canada (Can$40.7 million, 1.9 million kg), representing 37.5% of China's total imports of shellfish, followed by Guangdong (Can$24.7 million, 730,253 kg) and Beijing (Can$18.6 million, 1.1 million kg). The offline market, especially large wholesale markets in Shanghai is still larger than the online market.

Distribution channels

Supermarkets and hypermarkets are the main distribution channels for frozen/chilled and processed fish and fish products and are out-performing small independent grocers with the exception of live/fresh fish, for which wet markets (selling fresh meat, fish, produce, and other perishable goods) still lead. However, these channels have lost market share in packaged food sales in recent years owing to rising competition from e-commerce sites, which are experiencing growth because of the increasing number of smartphone and Internet users in China.

Opportunities for Canadian exporters

Since joining the World Trade Organization (WTO) in 2001, China has made considerable progress in reducing tariffs on fish and fish products. In terms of average import tariff for aquatic products, China has decreased the rate as low as 5% on certain products. For more information, visit WTO's tariff site.

It is strongly recommended that Exporters work with the local import agent, distributor, and end-user to make sure the products are in compliance with Chinese regulations and all proper documentation has been completed. For more information, please consult Exporting food out of Canada (Canadian Food Inspection Agency), Market Facts - China and Step-by-Step Guide to Exporting - Step 6 - Opening the door: entering your target market (The Canadian Trade Commissioner Service).

Exporters are welcome to participate in the annual trade shows in China to promote their products in the market. This year, the China Fisheries and Seafood Expo is being held in Qingdao, China from October 30 to November 1, 2019 and Food and Hotel China is being held in Shanghai, China November 12 to 14, 2019. It is worth noting that CanExport provides funding to small and medium-sized enterprises (SMEs) to help them reach export markets and execute strategic marketing projects such as participation in trade shows. Interested Canadian SMEs are encouraged to apply for this funding on the Funding that helps your company grow into global markets site.

Conclusion

Shellfish like oysters, scallops and mussels are considered high-end nutritious seafood around the world. As China's middle class continues to grow, customers in China are demanding more seafood, resulting in a rapidly growing import market for seafood in China. Numerous seafood restaurants and hotels offer their customers a variety of seafood including fish, shellfish, shrimp and crustaceans, which are high in protein. All of these factors provide opportunities for international seafood exporters.

A growing middle class with rising disposable income means more and more Chinese can afford to buy a variety of high-priced seafood in raw, cooked, packaged or other forms that helps keep them healthy. Canada and other seafood producing countries that provide high-quality, trusted products will have a good opportunity to increase their market share in China.

For more information

International Trade Commissioners can provide Canadian industry with on-the-ground expertise regarding market potential, current conditions and local business contacts, and are an excellent point of contact for export advice.

• Overview of Trade Commissioner Services in China
• Find a Trade Commissioner

For additional intelligence on this and other markets, the complete library of Global Analysis reports can be found on the International agri-food market intelligence page, arranged by region.

For additional Information on China Fisheries and Seafood Expo (CFSE) 2019, please contact:

Ben Berry, Deputy Director
Trade Show Strategy and Delivery
Agriculture and Agri-food Canada
ben.berry@canada.ca

Sector Trend Analysis – Shellfish trends in China
Global Analysis Report

Prepared by: Hongli Wang, Market Analyst

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