Tilapia
is the world’s second most farmed fish in the world, mainly because of its
resistance to diseases. China is the world’s largest producer of the world and
its market has been forecasted to reach 1.8 million tons in 2019, an increase
of around 500,000tones compared to last year. In 2018, farmers ramped up
production in the second half of the year and at the start of 2019 in order to
ship the volume before the expected effective date of the tariff hike in
December and then in March.
However, the mounting
difficulties associated with the introduction of the US tariff has allowed some
of the Chinese tilapia producer and processor to shift their focus towards
other species such as shrimps and pangasius, which have affected the production
forecast of tilapia in downward direction. Though the restriction now imposed
by the US on Chinese tilapia industry is on profit margins, but this will be
translated into low standards and practices that have driven improvements in
environmental and social responsibility.
The recent US tariffs have
added difficulties for the Chinese tilapia marketers as now additional
15percent tariff has to be paid by Chinese tilapia exports to the United States
which outweigh the profit margin in the supply chain, meaning that the cost
must or will be passed down the supply chain to the consumers. Furthermore,
negative perceptions about the Chinese-origin tilapia and stiff competition in
the commodity whitefish segment are pressing challenges for the Chinese
exporters. In response to these
challenges the Chinese tilapia producers and marketers are aiming to improve
the appeal of tilapia from a Chinese perspective have been launched and investments
have been done to increase its sales in European countries.
China tilapia industry is now
aiming for other diverse array of countries to expand its tilapia exports as
according to industry experts the demand growth in Africa is outstripping the
supply, despite their increasing domestic production. The current scenario and
tariffs have negatively impacted the Chinese tilapia industry in terms of
prices and export levels, but exporters and producers of tilapia are hoping for
the situation to change with phase one trade negotiations between the US and
China. Furthermore, the consumers in
developing countries and producing region are also expected to increase the
demand for Chinese tilapia in the market. Prices of Chinese tilapia are going
down but they are expected to settle down once the Chinese market gains
tariff-free access to the US and other markets.