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The Dragon's changing appetite PDF

30 Pages·2017·2.23 MB·English
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The Dragon’s changing appetite China’s changing net trade position in seafood and implications Dr. Beyhan de Jong Reykjavik, November 2017 Rabobank: Globally leading food and agribusiness lender and financial services provider 46 600 55,000 Countries Over Offices Over Employees Amsterdam Utrecht Moscow Dublin Calgary St Louis London Chicago Antwerp Warsaw Toronto Paris MilanFrankfurt Cedar Falls San Francisco New York Madrid Istanbul Beijing Washington DC Shanghai Tokyo El Centro Atlanta Dallas Delhi Kolkata Hong Kong Mexico City Mumbai Bangalore Willemstad Kuala Lumpur Kigali Malema Singapore Lubuan Nampula Ulónguè Jakarta Beira Tete Asuncion Maxixe Sao Paulo Chimoio Maputo Buenos Aires Sydney Santiago de Chile Melbourne Tasmania Wellington In volume terms China’s seafood consumption dwarfs that of the western countries China has a high seafood consumption, estimated at 44 kg per person, which is forecasted to reach 50 kg in 2026 Million tonnes 2006 80 2007 35% of global 2008 70 consumption 2009 2010 2011 60 2012 2013 50 2014 2015 40 2016 2017 2018 30 2019 2020 20 2021 2022 10 2023 2024 2025 0 2026 North America Europe Africa Latin America & Caribbean China Asia excl. China Source: OECD-FAO, Rabobank 2017 1 But despite the large consumption, China is not the largest importer of seafood …while paradoxically marine resource rich countries are the biggest seafood importers 2015 2010 2005 2000 EU-28 USA Japan China South Korea USD 8,5 Canada BLN Thailand Russia Australia Brazil 0 5 10 15 20 25 30 USD Billion Source: UN Comtrade, Rabobank 2017 2 In fact, China is the leading seafood exporter globally Relatively resource poor (marine EEZ and grains per capita) China is the world’s leading seafood exporter 2015 2010 2005 2000 China Norway EU-28 USA Thailand • Almost USD 20 BLN India • Positive net trade position by more than USD 10 BLN Chile • Seafood is the only protein that China has trade surplus Indonesia Ecuador Russia USD Billion 0 5 10 15 20 Source: UN Comtrade, Rabobank 2017 3 There are increasing constraints on the supply side in China … Domestic supply dynamics Production cost drivers Environmental regulations 1. Higher cost of labour / lower 1. Decommissioning of inland and labour availability coastal fleets 2. Disease / pollution pressure in 2. Limiting aquaculture close to aquaculture urban areas Source: Rabobank 2017 4 …while the drivers on the demand side accelerate import demand Import demand dynamics Import demand drivers Import enablers 1. Income growth and strong 1. On-line seafood trade currency 2. Improving logistical infrastructure / 2. Distrust of locally produced urbanisation seafood (due to pollution and scandals) Source: Rabobank 2017 5 Domestic seafood supply to stagnate or contract Labor availability and labor cost especially in rural areas is eroding competitiveness of the seafood industry in China Total labor force in China changes per 5 year intervals, declining in 2015 Thousands 20-59 age group 100.000 87.383 80.000 74.432 69.149 62.508 60.000 51.279 46.345 46.836 40.000 16.483 20.000 0 -8.294 -20.000 -29.814 -40.000 -47.638 -60.000 Source: China National Bureau of Statistics, Rabobank 2017 7 Gov. policy on fisheries: Prioritize environment, fleet and local fishing to shrink 13thNational Five-year plan of China (2016-2020) emphasizes sustainable practices “…It has become increasingly difficult to develop fishery industry in an environmental-friendly and sustainableway.” “…The quality of aquatic products are questionable due to intensified water contamination and illegal drugs.” “…We prioritize environment and promote green development. …We will focus on higher qualityand efficiencyinstead of larger quantity” ”… Domestic fishing goes through negative growth. …national marine fishing fleet is reduced” Source: Ministry of Agriculture of the People’s Republic of China, Seafood India media 2017 8

Description:
Meat, Poultry and Processed Products (LHS). Aquatic Products (RHS). The demand growth is accelerated by a high income elasticity of seafood demand in China. Source: National Bureau of Statistics, Nielsen, BCG, Rabobank 2017. Share of seafood (right) and meat (left) expenditure increases per
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