China's tilapia is accelerating its shift to the Asia-Pacific market

Under the heavy pressure of the US's 170% tariff on Chinese tilapia, China's tilapia industry is experiencing severe shocks. As China's largest export market for tilapia, the sudden "shutdown" of the US market has caused a large number of orders to be suspended or cancelled, and both upstream and downstream of the industry chain are facing huge challenges. However, with the joint intervention of the government and industry organizations, the price of raw materials has shown signs of stabilization in recent days.

On April 14, the China Aquatic Products Distribution and Processing Association (CAPPMA) issued an initiative calling for maintaining a stable tilapia supply chain. In the following two weeks, the price of raw materials in major production areas such as Guangdong, Guangxi, and Hainan began to stabilize: the ex-factory price of 500-800g tilapia was RMB 8 per kilogram (about US$1.10), and the price of 300-500g was RMB 6 per kilogram. Although the price has stopped falling, most farmers are still near the break-even point, with extremely limited profit margins.

Against the backdrop of the suspension of purchases in the US market, Chinese processing companies are re-arranging their export strategies, accelerating the development of domestic sales channels, and upgrading some production lines to meet the supply needs of the domestic market.

At the same time, China's aquatic products industry is looking to the member countries of the Regional Comprehensive Economic Partnership (RCEP) to seek new export breakthroughs. The China Fisheries Association recently released a report pointing out that China's tilapia exports to member countries have increased significantly since the RCEP officially came into effect in January 2022. The total export volume to RCEP countries in 2023 is 3,570 tons, which still accounts for a small part of China's overall tilapia exports (over 400,000 tons), but the growth trend is obvious.

In 2023, China's average export price to RCEP countries will be US$3.09 per kilogram, which is 25.9% lower than the average price of US$2.82 exported to the United States. The report analysis points out that the RMB exchange rate, geographical distance and China's per capita GDP are the three key factors affecting exports. A 1% depreciation of the RMB will drive the export value to increase by 17.14%, while a 1% increase in geographical distance will lead to a 4.88% decrease in export value; a 1% increase in China's per capita GDP will promote an increase in export value by 2.91%.

Looking ahead, countries such as Indonesia, New Zealand, and Myanmar are considered to have strong growth potential; the markets of Malaysia, Thailand, and the Philippines are stabilizing; while markets such as Singapore, Vietnam, Australia, South Korea, and Japan may see a certain decline.

Against the backdrop of accelerating changes in the global trade pattern, China's tilapia industry is undergoing a deep "reshuffle". The focus of exports has gradually shifted from relying solely on the United States to diversification and regionalization.

Reference: FOODSPATH