SEAFOOD TRADE ADVISORY GROUP

BULLETIN

24th January 2020

China Market Update

We are sure you are all aware of the situation unfolding in China with regard to the coronavirus and the impact that it is starting to have on planned CNY activities, including pressure from the Chinese Government to limit attendance at family gatherings and banquets.  Unfortunately, the management of the virus outbreak is likely to impact on demand for seafood, particularly higher value products such as Rock Lobster and Abalone. 

How such impacts will play out and how long they will last is unknown. 

It is important to note that in China, whilst local government decisions are being made to limit the spread of the virus, no ban has been enforced and that it’s a rapidly changing environment that exporters should be aware of. 

We have consulted with a number of Lobster exporters who have advised the following:

• The border to China is not currently closed
• Cargo sold for Saturday arrival is unaffected
• A high percentage of Sunday cargo is being cancelled. This is not just for Australian suppliers/products but global exports of live seafood.
• Cargo pre-sold for arrival next week are still going ahead but is at risk of being cancelled.
• A very real risk exists that wet markets may be progressively closed around China.  There are some unconfirmed reports that closures may start happening from Sunday. If it happens this may stop the majority of our trade to China.
• The Provincial Government from Hangzhou has ordered all countryside celebrations at restaurants to be cancelled to prevent further spread of virus.  We are unaware of other such declarations but expect that more will follow.

We are still confirming with Abalone exporters their experience with regard to the market during the last day or so. It does appear likely however that there may be a reduction in demand in the days ahead.

We are keeping our eye on Chinese language media and can report that some restaurants are reassuring their patrons that they will be going ahead with CNY celebrations with specific mentions that they have good supplies of Australian Abalone and Lobster. 

Lobster fisheries around Australia are responding by slowing down catch to allow the current product in the market to be sold and for processors to seek further clarity on the demand.

Industry associations are having productive discussions with government agencies regarding measures to minimise any potential financial impacts. 

Tasmania’s DPIPWE have been particularly responsive and have identified potential measures that can be used to roll this season’s remaining quota into next season if needed.  They also believe that there is provision for Lobsters to be returned to the sea and not removed from the fisher’s quota.  Both of these options are being looked at by their legal teams and they hope to have solutions and ways to implement them by Tuesday next week. 

We will continue to update as this situation unfolds.

All questions should be directed to Nathan Maxwell McGinn (Chair STAG) on 0409680731 or Michael Blake (Chair, ARLEA) on 0438 627 900.  You can also send an email to admin@seafoodtradeadvisory.com

STAG Bulletins are available at http://www.seafoodtradeadvisory.com

STAG Bulletins are a resource for Australian seafood exporters.The Seafood Trade Advisory Group receives funds from the Fisheries Research and Development Corporation.  The Fisheries Research and Development Corporation plans, invests in and manages fisheries research and development throughout Australia. It is a statutory authority within the portfolio of the federal Minister for Agriculture, Fisheries and Forestry, jointly funded by the Australian Government and the fishing industry.