China tilapia price drops again

Affected by this year's strongest typhoon "Wipha", China's tilapia industry is facing the double blow of supply-demand imbalance and natural disasters. Although there have been no reports of direct damage to aquaculture farms, the chain reactions triggered by the typhoon have worsened the already oversupplied market.

After the typhoon made landfall in Guangdong on July 20, the price of tilapia in producing areas fell accordingly. Monitoring data shows that in the 30th week, the price of tilapia of 500-800 grams purchased by Guangdong processing plants dropped by 0.20 yuan per kilogram week-on-week, hitting a record low. Prices in Hainan, Guangxi and other regions also slid by 0.2-0.4 yuan per kilogram simultaneously. Many farmers reported that they had to concentrate on selling their stocks to avoid the risks of the typhoon, resulting in the actual transaction price in Guangdong breaking the psychological barrier of 7 yuan per kilogram, with the lowest reaching 6.96 yuan per kilogram.

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The continued downturn in the export market has become the last straw that breaks the industry. A person in charge of a large processing plant in Hainan revealed, "American orders have been interrupted for months, and there is a serious backlog in cold storage." Executives of export enterprises in Guangdong said that the industry is going through the "darkest moment", and raw material procurement has almost come to a standstill. It is worth noting that the price in the domestic market is about 0.4 yuan per kilogram lower than the purchase price of export-registered aquaculture farms, highlighting the pressure of environmental compliance costs on enterprises.

Although the price of Chinese tilapia fillets in the U.S. wholesale market has remained stable (standard products at 3.20-3.50 U.S. dollars per pound, additive-free products at 3.40-3.70 U.S. dollars per pound), industry insiders pointed out that saturated inventories and weak retail demand have prevented importers from enjoying the dividends of lower raw material prices. A multinational trader said, "The capacity of U.S. cold storage has reached the warning line, and negotiations on new orders have reached a deadlock."

Faced with the crisis, processing enterprises are digesting inventories through solutions such as Delivered Duty Paid (DDP). However, the continuous cost inversion and increasingly stringent environmental protection regulations are prompting practitioners to adjust their production strategies. The China Aquatic Products Distribution and Processing Association has warned that the number of seedlings to be released in the next quarter is expected to decrease by 30%, which may lead to a supply contraction at the end of the year. Huang Weiming, a major aquaculture farmer in Zhaoqing, Guangdong, frankly said, "Now we lose 1.2 yuan for every kilogram of fish sold. If the market situation continues, we can only switch to shrimp farming."

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Blue Sea Fishery Co., Ltd.

E-mail: sales@blueseafishery.cn

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Tel: 0086-131-5609-5220

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China tilapia price drops again

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