China Catfish Market Report - Oct.2007
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By: Jimmy Woo&Gerry O& 39;SullivanDec 29,2007Boosted by growing exports and sales in the domestic market, the Chine
 
By: Jimmy Woo&Gerry O'Sullivan
Dec 29,2007
Boosted by growing exports and sales in the domestic market, the Chinese catfish industry has developed strongly in recent years but particularly in 2006 in both the production and export areas. However, following the adverse effect of US import restrictions in 2007, the positive industry trend began to suffer. 

Aquaculture Sector 

There are over 20 provinces (cities) in China involved in catfish farming. The major bases are located in provinces and regions such as Hubei, Jiangxi, Hunan, Anhui, Jiangsu and Sichuan. 

Chinese catfish farming can be classified according to three models: pond culture, cage culture and running-water culture. For exported processed catfish, the major culture model is operated as “cage culture” in reservoirs.
 

 
Output of channel catfish has expanded in recent years with production for 2006 estimated at 120 000 tonnes. According to preliminary statistics for 2007, Chinese cage culture of catfish involved 700,000 cages while pond culture involved a farming area of 200,000 mu (1 mu = 1/6 acre). 

Processing & Exporting 

The strong increase in Chinese catfish exports was clearly evident during 2003-2006, with total export volumes rising to a peak in 2006 of around 10,000 tons. 
Since the anti-dumping restrictions on Vietnamese catfish in the USA in 2003, Chinese catfish has taken advantage of the strong deficiency in the US import market and has become a key category in the catfish market there. 

 
Depression on Export Market 
The Chinese catfish industry was adversely affected by US restrictions on Chinese seafood imports from June last year following the detection of chemical residues by the FDA. Since then, Chinese catfish processing and exports have suffered heavily.. 

Lower export demand forced a drop in production for Chinese processors with a knock-on effect on purchases at farm level. By the middle of July, the farm gate price declined to 9.6 Yuan/kg on 750g-1000g/pc catfish, the only grade of interest to exporters during the period. As a result of this specific demand, all grades above 1000g/pc for export suffered with a big drop in procurement at farm level. 

Strengthened Controls & Traceability 
Based on an agreement reached between the USA and China’s AQSIQ (General Administration for Quality Supervision, Inspection and Quarantine), a more stringent test on chemical residues for seafood exports has been put into force. Re-qualification within HACCP system is mandatory for all Chinese fishery enterprises in order to obtain exemption on export restrictions. Rapid implementation of the new process was agreed upon. 

To improve quality, some initiatives such as training courses on culture and processing controls of Chinese channel catfish have been developed, aimed at a more effective farming sector. A proposal from fishery associations has also been presented regarding the introduction of a label on Chinese reservoir raised catfish, used to distinguish between the common pond culture species and high grade reservoir raised species, ensuring the superiority of exported catfish. 

Domestic Market 

Price trends 
As a result of product detentions by several US states since April, the price trend on catfish was downward with a sharp decline evident in May. This trend continued until July when there was a slight pickup in the domestic Chinese market. In the Guangdong wholesale market during July, the price on 500g-1000g/pc catfish fetched 9.6-10Yuan/kg. With firm sales and stable prices, the domestic market is expected to provide some strong growth potential for a depressed industry.
 

Potential & Challenges 

Following US restrictions and a difficult export context, Chinese catfish processors have begun to place a greater emphasis and increased efforts on the domestic market. With the major consumption area concentrated in the region of south-central Yangtze river including the Hunan and Hubei provinces, the domestic market is showing strong potential for further development. 

To further develop domestic sales of catfish, there are two major challenges on the marketing front: 

* identify the specification with the strongest potential and, 
* further explore the consumption potential for processed 
catfish products 

Outlook 

In the context of both a difficult export climate and a slowly developing domestic market, recovery in the Chinese catfish industry is likely to take some time. As a result, the five year industry objective which envisaged catfish production overtaking that of tilapia is now being reviewed. 

 

Prepared by
Jimmy Woo (INFOYU)
Gerry O'Sullivan (FAO GLOBEFISH)
 

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