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Afishianado, May 2011 - Seafood Markets in Asia

• Setting the Stage for a Sustainable Seafood Movement in China
• Earthquake and Tsunami Cripple Japanese Seafood Industry
• Efforts to Ban Shark Finning Surge

Setting the Stage for a Sustainable Seafood Movement in China

China has become the economic hotbed for seafood business development. The Food and Agriculture Organization of the United Nations lists China as the world’s largest seafood exporter, with an export value worth $10.2 billion USD, and the Chinese eat more seafood than any other population in the world, nearly 57 pounds (25.8 kilograms) per person. The big question is how much of the seafood China produces or consumes is sustainable, and where will the impetus to drive a sustainable seafood movement in this country come from?

Given that traditionally Chinese have bought their fish fresh, as soon as five years ago, it would have been rare to find frozen fish ready-meals on the shelf at urban Chinese grocery stores. However, a growing middle class with a large appetite for seafood and an increasingly diverse range of seafood products and product forms seems to bode well for investments in China as a consumer market. At the same time, increasing labor costs and the rise in value of the Chinese yuan has caused seafood processing in China to become more expensive. Some companies are already looking to nearby Laos and Vietnam as possible alternative manufacturing sites. The Global Aquaculture Alliance President Georg Chamberlain presented research at this year’s International Boston Seafood Show that by the end of 2011, China will shift from being a net exporter to a net importer of seafood.

Nongovernment organizations have played a substantial role in driving the sustainability movement in North America and Europe by using a variety of tactics and strategies, especially with big buyers and consumers. For example, nongovernment organizations and buyers have formed partnerships with a significant number of retailers and foodservice companies in Canada, United States and Northern Europe. In addition, wallet cards in various forms rating the sustainability of seafood are popular with consumers in these countries. However, nongovernment organizations don’t hold the same leverage, position, and bandwidth in Chinese social structure as those in other countries and they face tighter government control. With less than a handful of international or domestic nongovernment organizations operating in China that have the capacity, recognition and influence to reach out to seafood consumers and businesses, it remains to be seen what role nongovernment organizations community will play in furthering seafood sustainability in China.

Buyers from North America and Europe are often viewed as the sector with the greatest leverage to influence sustainability in China. China’s seafood export market has grown to what it is now by meeting the requirements and demands of overseas buyers in areas such as production quality and efficiency. However, the overseas buyer’s lever seems to have gotten somewhat shorter as the capacity to sell product within China (where sustainability requirements are lower) has increased. China will continue to export great amounts of seafood for a long time, but in order to increase the conservation impact in the water, Chinese domestic standards and requirements for sustainability need to increase as well.

Chinese consumers are another group that can drive change. Studies have shown that globally when individuals are lifted out of poverty, concerns outside of day-to-day survival, such as environmental protection, increase. Between 1990 and 2008, China added more than 800 million people to its middle class. Given the melamine disaster and other incidents of food contamination, Chinese consumers are now very concerned about food safety. But for this new middle class, concern about the impact of their buying decisions on the environment is not yet widespread, with the ocean as a specific concern even further removed.

A potential champion of seafood sustainability in China may be the government. With an economic system that has government so closely linked to business through state-owned enterprises and financial institutions, government-led producer and processor associations, and officials who are closely linked to large seafood enterprises; developing good policy and regulation with appropriate enforceable management schemes in sustainable fisheries and aquaculture will lead to widespread impact. As most people who have done any work in China will say, building relationships with government is the first step you take.

Obviously, not a single tactic, strategy or stakeholder group will drive a sustainable seafood movement in China. A combination of all these forces as well as coverage in the media and scientific research will be needed.

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Earthquake and Tsunami Cripple Japanese Seafood Industry

The March 11 earthquake and tsunami in Japan have not only taken a significant human toll but have ravished the Japanese seafood industry. Japan represented one of the most vibrant seafood markets in the world, fueled by a strong cultural tradition of eating seafood. The disaster has affected all segments of its seafood industry, from processing and production to its import market.

The city of Sendai, an area bustling with seafood factories and processing facilities, was the epicenter of the quake and tsunami. The area served as a hub, including facilities for processing, storage and distribution of pollock, flatfish and other Alaskan seafood products. Sendai processing facilities accepted seafood from as far and wide as India and Seattle.

Seafood fleets and the aquaculture operations were also devastated. The domestic Japanese output was sizeable, producing 5.59 million tons of seafood in 2008. The tsunami obliterated boats and fishing gear in northeastern cities such as Kamaishi in Iwate Prefecture. The coast did not only house domestic boats but also foreign vessels, which fished in Japanese waters. Some of this equipment cannot be replaced without significant investment. The Iwate Prefecture also had a booming aquaculture industry, which produced abalone, sea urchins, oysters, seaweed and large numbers of scallops, all of which are presumed destroyed. If any remain, concerns exist about how much of the radiation leaked by the nuclear plant in nearby Fukushima may be in Japan’s marine environment and therefore its seafood. In fact, Russia has suspended imports from more than 200 Japanese factories and India, Britain, China, Singapore and Hong Kong have recently banned certain seafood imports from Japan because of concerns about the radiation in Japanese seafood.

The import market also has been severely damaged, disrupting supply chains and virtually ceasing all seafood trade with Japan. For example, the $2-billion USD Indian export industry will notice significant declines, as exporters had direct links to Sendai for products such as shrimp, which fetched high prices in Japanese markets. While the Japanese will of course continue to eat seafood, it will take time for trade to resume and companies to rebuild, so producers around the world may feel this upheaval within the import market for years to come.

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Efforts to Ban Shark Finning Surge

Shark fin soup, a gelatinous mixture made from the fins of sharks, has long been a part of Chinese culture and cuisine. Businessmen, officials and individuals customarily serve it at important functions as a sign of respect and wealth. Once reserved for the upper echelons of society, the practice has become increasingly prevalent throughout Asia, as a middle class with the means to afford the expensive dish has continued to grow. While the largest markets are in China, shark fin soup has increasingly become standard fare in Western countries. European supply and demand has grown significantly in the past few decades, expanding the market to countries like Spain and France.

The demand for shark fin soup has led to a multi-billion dollar industry and given rise to the practice of “finning.” Finning is the act of removing the fins and discarding the body, leaving the incapacitated shark to drown or die of starvation. Sharks are particularly vulnerable to overfishing because they are naturally scarce, slow-growing, late-maturing and long-lived species.

In response, a number of governments have made moves to increase the protection of shark species. International shark policies range from fragmented fin bans to comprehensive conservation strategies. Several nations support the world’s largest and most influential shark fin fisheries, including the United States, the United Kingdom, Spain, New Zealand, Indonesia, India and Brazil. Perhaps most notably, a Chinese policymaker has recently proposed that China ban the trade in shark fins, significant because of the deep association of shark fin soup with Chinese culture. A study released by the Pew Environment Group and TRAFFIC concludes that of the top 20 shark-finning nations accounting for nearly 80 percent of the global shark catch, only a select few nations have well-managed shark fisheries.

In 2010, Hawaii became the first state in the United States to completely ban the sale, distribution and possession of shark fins. Later that year, the European Parliament endorsed a resolution requesting the European Commission amend existing shark regulation, including a ban on at-sea fin removal. In early 2011, the U.S. passed the Shark Conservation Act, imposing more stringent regulations on shark finning in U.S. waters. That same year, the Commonwealth of the Northern Mariana Islands became the first U.S. territory to ban shark fins, shortly followed by a similar bill in Guam. Most recently in February of this year, California legislators proposed a ban prohibiting all commerce of shark fins, representing the largest market for shark fins outside of Asia.

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