Re: [Sarnissa] [BULK]Do Chinese Exporters Still Outcompete Sub-Saharan Africa’s Tilapia?
Hi Cai, Thanks for your careful read. See my responses below. Willem van der Pijl Editor-in-Chief Aqua Insights [Aqua-Spark email signature] The content of this email is confidential and intended for the recipient specified in this message only. It is strictly forbidden to share any part of this message with any third party, without written consent from the sender. If you received this message by mistake, please reply, so that we can ensure that such a mistake does not occur in the future, and then delete the message. Van: William Leschen <williamleschen@gmail.com> Verzonden: woensdag 21 juli 2021 15:13 Aan: sarnissa-african-aquaculture Mailing List <sarnissa-african-aquaculture@lists.stir.ac.uk>; Cai, Junning (FIAA) <Junning.Cai@fao.org>; Willem van der Pijl <willem@aqua-spark.nl> Onderwerp: Fwd: [BULK]Do Chinese Exporters Still Outcompete Sub-Saharan Africa’s Tilapia? Thanks Cai for your feedback and response to the article we put up this morning from Willem and Aquaspark - Would welcome any of our other SARNISSA Followers on this email forum to send in their thoughts, experiences and feedback on this subject - it has been in the media news across SS African aquaculture for the last years - always good to get views of others involved in the tilapia value chain suppliers producers market chain etc Best wishes Will ---------- Forwarded message --------- From: Cai, Junning (NFIAN) <Junning.Cai@fao.org<mailto:Junning.Cai@fao.org>> Date: Wed, 21 Jul 2021 at 14:06 Subject: RE: [BULK]Do Chinese Exporters Still Outcompete Sub-Saharan Africa’s Tilapia? To: sarnissa-french-aquaculture@lists.stir.ac.uk<mailto:sarnissa-french-aquaculture@lists.stir.ac.uk> <sarnissa-french-aquaculture@lists.stir.ac.uk<mailto:sarnissa-french-aquaculture@lists.stir.ac.uk>> Cc: William Leschen <williamleschen@gmail.com<mailto:williamleschen@gmail.com>> Very interesting and informative article. Many thanks for sharing. I have some comments on two excerpts of the article in the following for discussion. Many thanks. Best, Junning “While tilapia production in China is believed to be stable at around 1.8m MT, its exports fell dramatically from a live weight equivalent (LWE) of 650,000 MT in 2013 to 178,000 MT in 2020. The LWE of fillet exports dropped the most: from 500,000 MT to 78,000 MT, while the exports of whole fish only dropped from 150,000 MT to 100,000 MT (Figure 2).” • According to UN Comtrade statistics, the United States imported 104 810 tonnes (product weight; close to 300 000 tonnes LWE) of frozen tilapia fillets (HS030461) from China in 2020, which was higher than the 92 810 tonnes in 2019 in spite of the trade war and the COVID pandemics. I have used the data of Chinese customs. There might be discrepancy between US NOAA and Chinese customs. I will have to check that out and check the data you present below. • However, the UN Comtrade statistics indicate only 31 697 tonnes and 4 834 tonnes of China’s export of HS030461 to the United States in 2019 and 2020, respectively. I don’t understand this comment. These are different statistics than you provide in the bullet point above while its both UN comtrade. These numbers are more in line with Chinese customs. Did you mention the wrong source? • The discrepancies between the import and export data are because a large amount of China’s export of tilapia fillets has been recorded under HS160419 (a commodity group including not only tilapia but also other fish products) in China’s export data whereas in HS030461 in the US import data. This is an interesting point which if I can confirm it, would require rectification of my blog (and article in the report which is too late now as it went to print – this would than be done in October this year). Which Im happy to make if it is valid. But… Has this been a change over time? Or has this always been the case? Otherwise it doesn’t explain the trend which you see in Chinese export data. So if you are right, the volume under 160419 should have drastically increased. • According to FAO statistics, China’s 444 851 tonnes of tilapia export in 2018 comprised 196 943 tonnes of HS160419 (Tilapias prepared or preserved, not minced), 135 189 tonnes of HS030323 (frozen whole tilapia) and 112 719 tonnes of HS030461 (frozen tilapia fillets). What is the source of FAO statistics on trade data? Do you consider these as being more reliable than FAO production statistics? • In summary, the observation in the highlighted text could reflect a data issue. I agree. There might be a data issue. We might need to ask Urner Barry for an estimate based on the container files. This would probably be the only way to get a more realistic perspective. “Chinese exporters sell whole tilapia in various sizes, ranging from 100/200 g to over 800 g. The most common size tilapia imported into sub-Saharan Africa is 100/200 and 200/300 g, but regional differences exist: Eastern, Middle, and Southern Africa tend to import small and medium-sized tilapia, while Western Africa tends to import medium-sized tilapia as well as some larger sizes.” • I don’t have the most updated data on tilapia trade price. But according to the UN Comtrade statistics, in 2018, the average import price of frozen whole tilapia was around USD 1.49/kg for sub-Saharan Africa, USD 1.92 for Eastern Africa, USD 1.60/kg for Middle Africa, USD 1.32/kg for Western Africa, and USD 0.95/kg for Southern Africa. These prices are inconsistent with the observations described in the highlighted text above – see Figure 3 in the article for the prices of tilapia by size. I think average per/kg prices are not a good price indication. The prices I quoted are quoted in May this year by two of the largest exporters in China and confirmed by two importers in different African countries and by some of the large producers in Zambia and Uganda. I feel very confident about these prices. • Tilapia import prices calculated from official trade statistics may not be accurate, or the latest size patterns may differ from those in 2018. In any case, it would be useful to know the base of the highlighted statement (e.g. export opinions, trade statistics, anecdotal observations, etc.). See above. • More detailed, quantitative information on tilapia consumption in Africa (live/fresh/frozen, size, original, price, etc.) will be highly useful. Agreed, but that was beyond the scope of this report. From: Sarnissa-african-aquaculture <sarnissa-african-aquaculture-bounces@lists.stir.ac.uk<mailto:sarnissa-african-aquaculture-bounces@lists.stir.ac.uk>> On Behalf Of William Leschen via Sarnissa-african-aquaculture Sent: 21 July 2021 10:52 To: sarnissa-african-aquaculture Mailing List <sarnissa-african-aquaculture@lists.stir.ac.uk<mailto:sarnissa-african-aquaculture@lists.stir.ac.uk>>; sarnissa-french-aquaculture@lists.stir.ac.uk<mailto:sarnissa-french-aquaculture@lists.stir.ac.uk> Subject: [BULK]Do Chinese Exporters Still Outcompete Sub-Saharan Africa’s Tilapia? Van: Willem <willem@aqua-spark.nl<mailto:willem@aqua-spark.nl>> Verzonden: woensdag 21 juli 2021 08:29 Aan: Willem van der Pijl <willem@aqua-spark.nl<mailto:willem@aqua-spark.nl>> Onderwerp: Do Chinese Exporters Still Outcompete Sub-Saharan Africa’s Tilapia? [https://mcusercontent.com/d5eb256f9a9def92894b295b9/images/28adb6fb-99e8-c524-e0cb-854d4857f599.jpeg]<https://aqua-spark.us1.list-manage.com/track/click?u=d5eb256f9a9def92894b295b9&id=aadc7557a8&e=408926a755> DO CHINESE EXPORTER STILL OUTCOMPETE SUB-SAHARAN AFRICA'S TILAPIA? One of the concerns many in sub-Saharan Africa express is the competition local producers face from cheap tilapia imported from China. However, for a couple of years now, China’s tilapia exports are declining and, at present, only 10% of its total production of tilapia is exported. While China has been a significant source of competition in the past, this is no longer entirely true, and we can maybe even breathe a sigh of relief: competition from China has forced commercial tilapia producers in sub-Saharan Africa to become more efficient and to build a brand for their products. Their focus may therefore now shift to competition from other proteins, such as chicken, instead. [https://mcusercontent.com/d5eb256f9a9def92894b295b9/images/0c4ec478-da54-c07...] Figure 1: China's tilapia exports to sub-Saharan Africa Source: General Administration of Customs People’s Republic of China "China’s Tilapia Volume Used for Exports Declined from 650,000 MT in 2013 to below 178,000 MT in 2020" While tilapia production in China is believed to be stable at around 1.8m MT, its exports fell dramatically from a live weight equivalent (LWE) of 650,000 MT in 2013 to 178,000 MT in 2020. The LWE of fillet exports dropped the most: from 500,000 MT to 78,000 MT, while the exports of whole fish only dropped from 150,000 MT to 100,000 MT (Figure 2). The decline in exports is a clear indication of China’s booming domestic market—and just like for other seafood, such as shrimp, China’s role as a tilapia exporter might soon be over. This may be the case sooner for larger fish used for fillets than for the smaller whole round tilapia, for which sub-Saharan Africa is still the largest market. "Sub-Saharan Africa Has Become China’s Largest Tilapia Market" According to Chinese customs, after climbing from 75,000 MT in 2013 to 93,000 MT in 2018, sub-Saharan Africa’s imports of Chinese tilapia dropped to 61,000 MT in 2020. Sub-Saharan Africa accounts for 60% of China’s total official whole tilapia exports. Figure one provides an overview of Chinese tilapia to various regions in sub-Saharan Africa. Western Africa is clearly the largest importer of Chinese tilapia and its import volume continues to rise. In 2020, the region imported 42,000 MT according to Chinese export data. The markets in the region are interconnected. While Côte d’Ivoire is clearly the largest importer of Chinese tilapia, part of that import is destined for landlocked markets—such as Burkina Faso, Mali, and Niger—and some product might be informally supplied to Ghana and Nigeria, which have officially banned tilapia imports. Imports into Eastern Africa declined from 16,000 MT in 2015 to 10,000 MT in 2020. Rwanda (40%), Kenya (30%), and Zambia (20%) are the largest importers. While Rwanda increased its imports in 2020 (to 4,000 MT), Kenya’s imports remained flat (at 3,000 MT), and Zambia’s declined (from 12,000 MT in 2013 to only 2,200 MT in 2020). Exports to Middle Africa fluctuated between 15,000 MT and 22,000 MT from 2015 to 2018, dropped to 10,000 MT in 2019, and further to 5,000 MT in 2020. The big plunge would have been caused by reduced imports into Angola and Cameroon. The Democratic Republic of the Congo and Gabon are currently the region’s largest importers. China’s export data also shows a decline in Southern Africa’s imports. Import data from local customs, however, shows a steady increase from 6,300 MT in 2015 to more than 12,000 MT in 2019. [https://mcusercontent.com/d5eb256f9a9def92894b295b9/images/88612e66-835f-7860-58c5-0184e5e548ad.png]<https://aqua-spark.us1.list-manage.com/track/click?u=d5eb256f9a9def92894b295b9&id=758e7d3c48&e=408926a755> Figure 2: Decline in tilapia exports in LWE estimation of actual export volume Source: https://www.trademap.org Note: Export volumes converted to a LWE with a ratio of 0.37 for fillets and an average ratio of 0.9 for whole round, and gutted and scaled tilapia. "Insiders Believe Import Data of China, and Sub-Saharan Africa to be Underreported" Many insiders in the aquaculture industry in sub-Saharan Africa believe that the actual volume of tilapia imported from China might be larger than the volume declared to customs: it is thought that importers and exporters may agree to declare the product as, say, mackerel or as “other fish” to circumvent import duties on tilapia or bans that prohibit the import of Chinese tilapia. Suspicion is fueled by reports which describe higher import numbers than statistics show. An example includes a recent study of the impact that imported Chinese tilapia has on the dynamics of the fish market in Kisumu, Kenya. The 20,000 MT mentioned in the study is much higher than Kenya’s formal import numbers, which, for 2019, were reported at 2,500 MT of tilapia and an additional 8,000 MT of “freshwater and saltwater fish,” possibly also consisting of tilapia, imported from China. This total of 10,500 MT only accounts for half of the volume reported in the study. Either the study overestimated the volume or a considerable amount of product is smuggled into the country. This is just one example. There are suspicions that tilapia is also smuggled into other countries, such as Ghana, Nigeria, and Zambia. One industry source even claims that, especially when looking at medium-sized tilapia, legitimate imports are increasingly outcompeted by local producers. He therefore believes that legitimate imports consist mainly of small sizes, and that larger sizes might be smuggled into the country to escape import duties. [https://mcusercontent.com/d5eb256f9a9def92894b295b9/images/615af65f-966c-b489-a3f9-8b950ef56c36.jpg]<https://aqua-spark.us1.list-manage.com/track/click?u=d5eb256f9a9def92894b295b9&id=7589c91160&e=408926a755> Figure 3: CIF prices delivered to ports in sub-saharan africa quoted by chinese exporters in march 2021 "Chinese Exporters Offer Tilapia Delivered to Ports in Sub-Saharan Africa at $0.85-$1.50, Depending on Size" Chinese exporters sell whole tilapia in various sizes, ranging from 100/200 g to over 800 g. The most common size tilapia imported into sub-Saharan Africa is 100/200 and 200/300 g, but regional differences exist: Eastern, Middle, and Southern Africa tend to import small and medium-sized tilapia, while Western Africa tends to import medium-sized tilapia as well as some larger sizes. In early 2021, Chinese sellers offered tilapia at prices (CIF) ranging from $0.85/kg for 100/200 g to $1.53/kg for over 800 g. These prices may drop during the year when the peak harvest season in China starts in June, and when the—currently extremely high—container prices tumble. profile of the company and country we invest in. When looking at these prices, it’s crucial to understand that the quoted prices refer to the size of the fish after 20% glazing. This means that a product of 200-300 g actually consists of about 150-250 g tilapia that is procured at a lower price. A source in China states that his clients in sub-Saharan Africa are normally not willing to order a net weight product because of the higher price they would have to pay. This could indicate that Chinese exporters are not competitive in the market with a net-weight product. Chinese exporters can sell at these prices because they receive a subsidy of 10% for exporting tilapia to sub-Saharan Africa. In some cases, the smaller tilapia is believed to primarily be a by-product of farms that mainly target larger sizes. As there is no domestic market for this product, Chinese farmers are willing to sell it to processors at around—or even below—the actual production cost. "Local Producers Have Started Outcompeting Chinese Medium-Sized and Large Tilapia" Even though the actual volume of Chinese tilapia sold on the market in sub-Saharan Africa might still be around 100,000 MT, this should not be seen as a major threat to the competitiveness of local tilapia production. While the low prices for the smaller Chinese tilapia are hard to compete with, commercial local producers have started competing with Chinese prices for medium-sized and large tilapia. While the small Chinese tilapia is mainly sold to the lowest-income urban consumers of sub-Saharan Africa, medium-sized tilapia, more expensive than the poorest can afford, is sold mostly to the urban middle class. With Chinese tilapia being less of a threat, competition might come from other animal proteins instead. 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Dear Willem, Many thanks for your clarifications. Data inconsistency is a norm rather than exception. It would be useful to conduct in-depth, comprehensive studies on tilapia value chains in Africa to establish some baselines, also to clarify some myths (e.g. anecdotal stories about cheap tilapia import from China). Some further notes on UN Comtrade and FAO statistics on tilapia trade are in the following. · Theoretically, country A’s export to country B = country B’s import from country A. But trade data often do not obey this identity for multiple reasons. · In the case of tilapia trade, from the UN Comtrade statistics, we can see that the US reported that it imported 104 810 tonnes of HS030461 (frozen tilapia fillets) from China in 2020, whereas China reported that it only exported 4 834 tonnes of HS030461 to the US in the same year. A huge discrepancy! · On the other hand, according to the FAO statistics, in 2018, China reported that it exported 196 943 tonnes of “Tilapias prepared or preserved, not minced” under HS160419, whereas the entire world reported little tilapia import under HS160419. · Therefore, one explanation is that a substantial amount of frozen tilapia fillet export from China to the US have been recorded by China under HS160419, while they were recorded by the US under HS030461. · The tilapia import prices in the text below highlighted in blue are based on UN Comtrade statistics – they are some old estimates and I am also surprised to see the relatively high prices so may need to check the country details to understand them better. As the price pattern in the text highlighted in blue is inconsistent with the size pattern indicated in the article (i.e. larger size tilapia import in Western Africa than Eastern, Middle or Southern Africa), my main point was to find out the source of the information regarding the size pattern across regions. · Data from FAO fish trade statistics <http://www.fao.org/fishery/statistics/global-commodities-production/en> are mostly consistent with UN Comtrade statistics<https://comtrade.un.org/data/>, and both of them are primarily based on countries’ custom data. One advantage of the FAO statistics is that it contains more detailed information on fisheries and aquaculture commodities. Hope these help. Many thanks again for the discussion. Best, Junning From: Willem van der Pijl <willem@aqua-spark.nl> Sent: 21 July 2021 16:53 To: Cai, Junning (NFIAN) <Junning.Cai@fao.org> Cc: sarnissa-french-aquaculture@lists.stir.ac.uk; William Leschen <williamleschen@gmail.com> Subject: RE: [BULK]Do Chinese Exporters Still Outcompete Sub-Saharan Africa’s Tilapia? Hi Cai, Thanks for your careful read. See my responses below. Willem van der Pijl Editor-in-Chief Aqua Insights [Aqua-Spark email signature] The content of this email is confidential and intended for the recipient specified in this message only. It is strictly forbidden to share any part of this message with any third party, without written consent from the sender. If you received this message by mistake, please reply, so that we can ensure that such a mistake does not occur in the future, and then delete the message. Van: William Leschen <williamleschen@gmail.com<mailto:williamleschen@gmail.com>> Verzonden: woensdag 21 juli 2021 15:13 Aan: sarnissa-african-aquaculture Mailing List <sarnissa-african-aquaculture@lists.stir.ac.uk<mailto:sarnissa-african-aquaculture@lists.stir.ac.uk>>; Cai, Junning (FIAA) <Junning.Cai@fao.org<mailto:Junning.Cai@fao.org>>; Willem van der Pijl <willem@aqua-spark.nl<mailto:willem@aqua-spark.nl>> Onderwerp: Fwd: [BULK]Do Chinese Exporters Still Outcompete Sub-Saharan Africa’s Tilapia? Thanks Cai for your feedback and response to the article we put up this morning from Willem and Aquaspark - Would welcome any of our other SARNISSA Followers on this email forum to send in their thoughts, experiences and feedback on this subject - it has been in the media news across SS African aquaculture for the last years - always good to get views of others involved in the tilapia value chain suppliers producers market chain etc Best wishes Will ---------- Forwarded message --------- From: Cai, Junning (NFIAN) <Junning.Cai@fao.org<mailto:Junning.Cai@fao.org>> Date: Wed, 21 Jul 2021 at 14:06 Subject: RE: [BULK]Do Chinese Exporters Still Outcompete Sub-Saharan Africa’s Tilapia? To: sarnissa-french-aquaculture@lists.stir.ac.uk<mailto:sarnissa-french-aquaculture@lists.stir.ac.uk> <sarnissa-french-aquaculture@lists.stir.ac.uk<mailto:sarnissa-french-aquaculture@lists.stir.ac.uk>> Cc: William Leschen <williamleschen@gmail.com<mailto:williamleschen@gmail.com>> Very interesting and informative article. Many thanks for sharing. I have some comments on two excerpts of the article in the following for discussion. Many thanks. Best, Junning “While tilapia production in China is believed to be stable at around 1.8m MT, its exports fell dramatically from a live weight equivalent (LWE) of 650,000 MT in 2013 to 178,000 MT in 2020. The LWE of fillet exports dropped the most: from 500,000 MT to 78,000 MT, while the exports of whole fish only dropped from 150,000 MT to 100,000 MT (Figure 2).” • According to UN Comtrade statistics, the United States imported 104 810 tonnes (product weight; close to 300 000 tonnes LWE) of frozen tilapia fillets (HS030461) from China in 2020, which was higher than the 92 810 tonnes in 2019 in spite of the trade war and the COVID pandemics. I have used the data of Chinese customs. There might be discrepancy between US NOAA and Chinese customs. I will have to check that out and check the data you present below. • However, the UN Comtrade statistics indicate only 31 697 tonnes and 4 834 tonnes of China’s export of HS030461 to the United States in 2019 and 2020, respectively. I don’t understand this comment. These are different statistics than you provide in the bullet point above while its both UN comtrade. These numbers are more in line with Chinese customs. Did you mention the wrong source? • The discrepancies between the import and export data are because a large amount of China’s export of tilapia fillets has been recorded under HS160419 (a commodity group including not only tilapia but also other fish products) in China’s export data whereas in HS030461 in the US import data. This is an interesting point which if I can confirm it, would require rectification of my blog (and article in the report which is too late now as it went to print – this would than be done in October this year). Which Im happy to make if it is valid. But… Has this been a change over time? Or has this always been the case? Otherwise it doesn’t explain the trend which you see in Chinese export data. So if you are right, the volume under 160419 should have drastically increased. • According to FAO statistics, China’s 444 851 tonnes of tilapia export in 2018 comprised 196 943 tonnes of HS160419 (Tilapias prepared or preserved, not minced), 135 189 tonnes of HS030323 (frozen whole tilapia) and 112 719 tonnes of HS030461 (frozen tilapia fillets). What is the source of FAO statistics on trade data? Do you consider these as being more reliable than FAO production statistics? • In summary, the observation in the highlighted text could reflect a data issue. I agree. There might be a data issue. We might need to ask Urner Barry for an estimate based on the container files. This would probably be the only way to get a more realistic perspective. “Chinese exporters sell whole tilapia in various sizes, ranging from 100/200 g to over 800 g. The most common size tilapia imported into sub-Saharan Africa is 100/200 and 200/300 g, but regional differences exist: Eastern, Middle, and Southern Africa tend to import small and medium-sized tilapia, while Western Africa tends to import medium-sized tilapia as well as some larger sizes.” • I don’t have the most updated data on tilapia trade price. But according to the UN Comtrade statistics, in 2018, the average import price of frozen whole tilapia was around USD 1.49/kg for sub-Saharan Africa, USD 1.92 for Eastern Africa, USD 1.60/kg for Middle Africa, USD 1.32/kg for Western Africa, and USD 0.95/kg for Southern Africa. These prices are inconsistent with the observations described in the highlighted text above – see Figure 3 in the article for the prices of tilapia by size. I think average per/kg prices are not a good price indication. The prices I quoted are quoted in May this year by two of the largest exporters in China and confirmed by two importers in different African countries and by some of the large producers in Zambia and Uganda. I feel very confident about these prices. • Tilapia import prices calculated from official trade statistics may not be accurate, or the latest size patterns may differ from those in 2018. In any case, it would be useful to know the base of the highlighted statement (e.g. export opinions, trade statistics, anecdotal observations, etc.). See above. • More detailed, quantitative information on tilapia consumption in Africa (live/fresh/frozen, size, original, price, etc.) will be highly useful. Agreed, but that was beyond the scope of this report. From: Sarnissa-african-aquaculture <sarnissa-african-aquaculture-bounces@lists.stir.ac.uk<mailto:sarnissa-african-aquaculture-bounces@lists.stir.ac.uk>> On Behalf Of William Leschen via Sarnissa-african-aquaculture Sent: 21 July 2021 10:52 To: sarnissa-african-aquaculture Mailing List <sarnissa-african-aquaculture@lists.stir.ac.uk<mailto:sarnissa-african-aquaculture@lists.stir.ac.uk>>; sarnissa-french-aquaculture@lists.stir.ac.uk<mailto:sarnissa-french-aquaculture@lists.stir.ac.uk> Subject: [BULK]Do Chinese Exporters Still Outcompete Sub-Saharan Africa’s Tilapia? Van: Willem <willem@aqua-spark.nl<mailto:willem@aqua-spark.nl>> Verzonden: woensdag 21 juli 2021 08:29 Aan: Willem van der Pijl <willem@aqua-spark.nl<mailto:willem@aqua-spark.nl>> Onderwerp: Do Chinese Exporters Still Outcompete Sub-Saharan Africa’s Tilapia? [https://mcusercontent.com/d5eb256f9a9def92894b295b9/images/28adb6fb-99e8-c524-e0cb-854d4857f599.jpeg]<https://aqua-spark.us1.list-manage.com/track/click?u=d5eb256f9a9def92894b295b9&id=aadc7557a8&e=408926a755> DO CHINESE EXPORTER STILL OUTCOMPETE SUB-SAHARAN AFRICA'S TILAPIA? One of the concerns many in sub-Saharan Africa express is the competition local producers face from cheap tilapia imported from China. However, for a couple of years now, China’s tilapia exports are declining and, at present, only 10% of its total production of tilapia is exported. While China has been a significant source of competition in the past, this is no longer entirely true, and we can maybe even breathe a sigh of relief: competition from China has forced commercial tilapia producers in sub-Saharan Africa to become more efficient and to build a brand for their products. Their focus may therefore now shift to competition from other proteins, such as chicken, instead. [https://mcusercontent.com/d5eb256f9a9def92894b295b9/images/0c4ec478-da54-c07...] Figure 1: China's tilapia exports to sub-Saharan Africa Source: General Administration of Customs People’s Republic of China "China’s Tilapia Volume Used for Exports Declined from 650,000 MT in 2013 to below 178,000 MT in 2020" While tilapia production in China is believed to be stable at around 1.8m MT, its exports fell dramatically from a live weight equivalent (LWE) of 650,000 MT in 2013 to 178,000 MT in 2020. The LWE of fillet exports dropped the most: from 500,000 MT to 78,000 MT, while the exports of whole fish only dropped from 150,000 MT to 100,000 MT (Figure 2). The decline in exports is a clear indication of China’s booming domestic market—and just like for other seafood, such as shrimp, China’s role as a tilapia exporter might soon be over. This may be the case sooner for larger fish used for fillets than for the smaller whole round tilapia, for which sub-Saharan Africa is still the largest market. "Sub-Saharan Africa Has Become China’s Largest Tilapia Market" According to Chinese customs, after climbing from 75,000 MT in 2013 to 93,000 MT in 2018, sub-Saharan Africa’s imports of Chinese tilapia dropped to 61,000 MT in 2020. Sub-Saharan Africa accounts for 60% of China’s total official whole tilapia exports. Figure one provides an overview of Chinese tilapia to various regions in sub-Saharan Africa. Western Africa is clearly the largest importer of Chinese tilapia and its import volume continues to rise. In 2020, the region imported 42,000 MT according to Chinese export data. The markets in the region are interconnected. While Côte d’Ivoire is clearly the largest importer of Chinese tilapia, part of that import is destined for landlocked markets—such as Burkina Faso, Mali, and Niger—and some product might be informally supplied to Ghana and Nigeria, which have officially banned tilapia imports. Imports into Eastern Africa declined from 16,000 MT in 2015 to 10,000 MT in 2020. Rwanda (40%), Kenya (30%), and Zambia (20%) are the largest importers. While Rwanda increased its imports in 2020 (to 4,000 MT), Kenya’s imports remained flat (at 3,000 MT), and Zambia’s declined (from 12,000 MT in 2013 to only 2,200 MT in 2020). Exports to Middle Africa fluctuated between 15,000 MT and 22,000 MT from 2015 to 2018, dropped to 10,000 MT in 2019, and further to 5,000 MT in 2020. The big plunge would have been caused by reduced imports into Angola and Cameroon. The Democratic Republic of the Congo and Gabon are currently the region’s largest importers. China’s export data also shows a decline in Southern Africa’s imports. Import data from local customs, however, shows a steady increase from 6,300 MT in 2015 to more than 12,000 MT in 2019. [https://mcusercontent.com/d5eb256f9a9def92894b295b9/images/88612e66-835f-7860-58c5-0184e5e548ad.png]<https://aqua-spark.us1.list-manage.com/track/click?u=d5eb256f9a9def92894b295b9&id=758e7d3c48&e=408926a755> Figure 2: Decline in tilapia exports in LWE estimation of actual export volume Source: https://www.trademap.org Note: Export volumes converted to a LWE with a ratio of 0.37 for fillets and an average ratio of 0.9 for whole round, and gutted and scaled tilapia. "Insiders Believe Import Data of China, and Sub-Saharan Africa to be Underreported" Many insiders in the aquaculture industry in sub-Saharan Africa believe that the actual volume of tilapia imported from China might be larger than the volume declared to customs: it is thought that importers and exporters may agree to declare the product as, say, mackerel or as “other fish” to circumvent import duties on tilapia or bans that prohibit the import of Chinese tilapia. Suspicion is fueled by reports which describe higher import numbers than statistics show. An example includes a recent study of the impact that imported Chinese tilapia has on the dynamics of the fish market in Kisumu, Kenya. The 20,000 MT mentioned in the study is much higher than Kenya’s formal import numbers, which, for 2019, were reported at 2,500 MT of tilapia and an additional 8,000 MT of “freshwater and saltwater fish,” possibly also consisting of tilapia, imported from China. This total of 10,500 MT only accounts for half of the volume reported in the study. Either the study overestimated the volume or a considerable amount of product is smuggled into the country. This is just one example. There are suspicions that tilapia is also smuggled into other countries, such as Ghana, Nigeria, and Zambia. One industry source even claims that, especially when looking at medium-sized tilapia, legitimate imports are increasingly outcompeted by local producers. He therefore believes that legitimate imports consist mainly of small sizes, and that larger sizes might be smuggled into the country to escape import duties. [https://mcusercontent.com/d5eb256f9a9def92894b295b9/images/615af65f-966c-b489-a3f9-8b950ef56c36.jpg]<https://aqua-spark.us1.list-manage.com/track/click?u=d5eb256f9a9def92894b295b9&id=7589c91160&e=408926a755> Figure 3: CIF prices delivered to ports in sub-saharan africa quoted by chinese exporters in march 2021 "Chinese Exporters Offer Tilapia Delivered to Ports in Sub-Saharan Africa at $0.85-$1.50, Depending on Size" Chinese exporters sell whole tilapia in various sizes, ranging from 100/200 g to over 800 g. The most common size tilapia imported into sub-Saharan Africa is 100/200 and 200/300 g, but regional differences exist: Eastern, Middle, and Southern Africa tend to import small and medium-sized tilapia, while Western Africa tends to import medium-sized tilapia as well as some larger sizes. In early 2021, Chinese sellers offered tilapia at prices (CIF) ranging from $0.85/kg for 100/200 g to $1.53/kg for over 800 g. These prices may drop during the year when the peak harvest season in China starts in June, and when the—currently extremely high—container prices tumble. profile of the company and country we invest in. When looking at these prices, it’s crucial to understand that the quoted prices refer to the size of the fish after 20% glazing. This means that a product of 200-300 g actually consists of about 150-250 g tilapia that is procured at a lower price. A source in China states that his clients in sub-Saharan Africa are normally not willing to order a net weight product because of the higher price they would have to pay. This could indicate that Chinese exporters are not competitive in the market with a net-weight product. Chinese exporters can sell at these prices because they receive a subsidy of 10% for exporting tilapia to sub-Saharan Africa. In some cases, the smaller tilapia is believed to primarily be a by-product of farms that mainly target larger sizes. As there is no domestic market for this product, Chinese farmers are willing to sell it to processors at around—or even below—the actual production cost. "Local Producers Have Started Outcompeting Chinese Medium-Sized and Large Tilapia" Even though the actual volume of Chinese tilapia sold on the market in sub-Saharan Africa might still be around 100,000 MT, this should not be seen as a major threat to the competitiveness of local tilapia production. While the low prices for the smaller Chinese tilapia are hard to compete with, commercial local producers have started competing with Chinese prices for medium-sized and large tilapia. While the small Chinese tilapia is mainly sold to the lowest-income urban consumers of sub-Saharan Africa, medium-sized tilapia, more expensive than the poorest can afford, is sold mostly to the urban middle class. With Chinese tilapia being less of a threat, competition might come from other animal proteins instead. 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Hi Cai, Thanks. Yes I conduct the similar kind of analysis as you do below but Im more familiar with shrimp than with tilapia. Anyway, it seems that the discrepancy is mainly about the US, and even there, there is still a negative trend in the volume of fillets, whatever source you use. For Africa, there are considerable discrepancies as well, but also there, these discrepancies do create some uncertainty, but still you can see broad patterns that are good enough to identify some trends that help to understand the situation. Be sure to check the report. There I also do a review of FAO production data for sub-Saharan Africa, which is a drama for itself. You can subscribe to Aqua-Insights so you get notified once the report is released here: www.aqua-spark.nl/aqua-insights<http://www.aqua-spark.nl/aqua-insights> Have a nice evening! Willem van der Pijl Editor-in-Chief Aqua Insights [Aqua-Spark email signature] The content of this email is confidential and intended for the recipient specified in this message only. It is strictly forbidden to share any part of this message with any third party, without written consent from the sender. If you received this message by mistake, please reply, so that we can ensure that such a mistake does not occur in the future, and then delete the message. Van: Cai, Junning (NFIAN) <Junning.Cai@fao.org> Verzonden: woensdag 21 juli 2021 19:52 Aan: Willem van der Pijl <willem@aqua-spark.nl> CC: sarnissa-french-aquaculture@lists.stir.ac.uk; William Leschen <williamleschen@gmail.com> Onderwerp: RE: [BULK]Do Chinese Exporters Still Outcompete Sub-Saharan Africa’s Tilapia? Dear Willem, Many thanks for your clarifications. Data inconsistency is a norm rather than exception. It would be useful to conduct in-depth, comprehensive studies on tilapia value chains in Africa to establish some baselines, also to clarify some myths (e.g. anecdotal stories about cheap tilapia import from China). Some further notes on UN Comtrade and FAO statistics on tilapia trade are in the following. * Theoretically, country A’s export to country B = country B’s import from country A. But trade data often do not obey this identity for multiple reasons. * In the case of tilapia trade, from the UN Comtrade statistics, we can see that the US reported that it imported 104 810 tonnes of HS030461 (frozen tilapia fillets) from China in 2020, whereas China reported that it only exported 4 834 tonnes of HS030461 to the US in the same year. A huge discrepancy! * On the other hand, according to the FAO statistics, in 2018, China reported that it exported 196 943 tonnes of “Tilapias prepared or preserved, not minced” under HS160419, whereas the entire world reported little tilapia import under HS160419. * Therefore, one explanation is that a substantial amount of frozen tilapia fillet export from China to the US have been recorded by China under HS160419, while they were recorded by the US under HS030461. * The tilapia import prices in the text below highlighted in blue are based on UN Comtrade statistics – they are some old estimates and I am also surprised to see the relatively high prices so may need to check the country details to understand them better. As the price pattern in the text highlighted in blue is inconsistent with the size pattern indicated in the article (i.e. larger size tilapia import in Western Africa than Eastern, Middle or Southern Africa), my main point was to find out the source of the information regarding the size pattern across regions. * Data from FAO fish trade statistics <http://www.fao.org/fishery/statistics/global-commodities-production/en> are mostly consistent with UN Comtrade statistics<https://comtrade.un.org/data/>, and both of them are primarily based on countries’ custom data. One advantage of the FAO statistics is that it contains more detailed information on fisheries and aquaculture commodities. Hope these help. Many thanks again for the discussion. Best, Junning From: Willem van der Pijl <willem@aqua-spark.nl<mailto:willem@aqua-spark.nl>> Sent: 21 July 2021 16:53 To: Cai, Junning (NFIAN) <Junning.Cai@fao.org<mailto:Junning.Cai@fao.org>> Cc: sarnissa-french-aquaculture@lists.stir.ac.uk<mailto:sarnissa-french-aquaculture@lists.stir.ac.uk>; William Leschen <williamleschen@gmail.com<mailto:williamleschen@gmail.com>> Subject: RE: [BULK]Do Chinese Exporters Still Outcompete Sub-Saharan Africa’s Tilapia? Hi Cai, Thanks for your careful read. See my responses below. Willem van der Pijl Editor-in-Chief Aqua Insights [Aqua-Spark email signature] The content of this email is confidential and intended for the recipient specified in this message only. It is strictly forbidden to share any part of this message with any third party, without written consent from the sender. If you received this message by mistake, please reply, so that we can ensure that such a mistake does not occur in the future, and then delete the message. Van: William Leschen <williamleschen@gmail.com<mailto:williamleschen@gmail.com>> Verzonden: woensdag 21 juli 2021 15:13 Aan: sarnissa-african-aquaculture Mailing List <sarnissa-african-aquaculture@lists.stir.ac.uk<mailto:sarnissa-african-aquaculture@lists.stir.ac.uk>>; Cai, Junning (FIAA) <Junning.Cai@fao.org<mailto:Junning.Cai@fao.org>>; Willem van der Pijl <willem@aqua-spark.nl<mailto:willem@aqua-spark.nl>> Onderwerp: Fwd: [BULK]Do Chinese Exporters Still Outcompete Sub-Saharan Africa’s Tilapia? Thanks Cai for your feedback and response to the article we put up this morning from Willem and Aquaspark - Would welcome any of our other SARNISSA Followers on this email forum to send in their thoughts, experiences and feedback on this subject - it has been in the media news across SS African aquaculture for the last years - always good to get views of others involved in the tilapia value chain suppliers producers market chain etc Best wishes Will ---------- Forwarded message --------- From: Cai, Junning (NFIAN) <Junning.Cai@fao.org<mailto:Junning.Cai@fao.org>> Date: Wed, 21 Jul 2021 at 14:06 Subject: RE: [BULK]Do Chinese Exporters Still Outcompete Sub-Saharan Africa’s Tilapia? To: sarnissa-french-aquaculture@lists.stir.ac.uk<mailto:sarnissa-french-aquaculture@lists.stir.ac.uk> <sarnissa-french-aquaculture@lists.stir.ac.uk<mailto:sarnissa-french-aquaculture@lists.stir.ac.uk>> Cc: William Leschen <williamleschen@gmail.com<mailto:williamleschen@gmail.com>> Very interesting and informative article. Many thanks for sharing. I have some comments on two excerpts of the article in the following for discussion. Many thanks. Best, Junning “While tilapia production in China is believed to be stable at around 1.8m MT, its exports fell dramatically from a live weight equivalent (LWE) of 650,000 MT in 2013 to 178,000 MT in 2020. The LWE of fillet exports dropped the most: from 500,000 MT to 78,000 MT, while the exports of whole fish only dropped from 150,000 MT to 100,000 MT (Figure 2).” • According to UN Comtrade statistics, the United States imported 104 810 tonnes (product weight; close to 300 000 tonnes LWE) of frozen tilapia fillets (HS030461) from China in 2020, which was higher than the 92 810 tonnes in 2019 in spite of the trade war and the COVID pandemics. I have used the data of Chinese customs. There might be discrepancy between US NOAA and Chinese customs. I will have to check that out and check the data you present below. • However, the UN Comtrade statistics indicate only 31 697 tonnes and 4 834 tonnes of China’s export of HS030461 to the United States in 2019 and 2020, respectively. I don’t understand this comment. These are different statistics than you provide in the bullet point above while its both UN comtrade. These numbers are more in line with Chinese customs. Did you mention the wrong source? • The discrepancies between the import and export data are because a large amount of China’s export of tilapia fillets has been recorded under HS160419 (a commodity group including not only tilapia but also other fish products) in China’s export data whereas in HS030461 in the US import data. This is an interesting point which if I can confirm it, would require rectification of my blog (and article in the report which is too late now as it went to print – this would than be done in October this year). Which Im happy to make if it is valid. But… Has this been a change over time? Or has this always been the case? Otherwise it doesn’t explain the trend which you see in Chinese export data. So if you are right, the volume under 160419 should have drastically increased. • According to FAO statistics, China’s 444 851 tonnes of tilapia export in 2018 comprised 196 943 tonnes of HS160419 (Tilapias prepared or preserved, not minced), 135 189 tonnes of HS030323 (frozen whole tilapia) and 112 719 tonnes of HS030461 (frozen tilapia fillets). What is the source of FAO statistics on trade data? Do you consider these as being more reliable than FAO production statistics? • In summary, the observation in the highlighted text could reflect a data issue. I agree. There might be a data issue. We might need to ask Urner Barry for an estimate based on the container files. This would probably be the only way to get a more realistic perspective. “Chinese exporters sell whole tilapia in various sizes, ranging from 100/200 g to over 800 g. The most common size tilapia imported into sub-Saharan Africa is 100/200 and 200/300 g, but regional differences exist: Eastern, Middle, and Southern Africa tend to import small and medium-sized tilapia, while Western Africa tends to import medium-sized tilapia as well as some larger sizes.” • I don’t have the most updated data on tilapia trade price. But according to the UN Comtrade statistics, in 2018, the average import price of frozen whole tilapia was around USD 1.49/kg for sub-Saharan Africa, USD 1.92 for Eastern Africa, USD 1.60/kg for Middle Africa, USD 1.32/kg for Western Africa, and USD 0.95/kg for Southern Africa. These prices are inconsistent with the observations described in the highlighted text above – see Figure 3 in the article for the prices of tilapia by size. I think average per/kg prices are not a good price indication. The prices I quoted are quoted in May this year by two of the largest exporters in China and confirmed by two importers in different African countries and by some of the large producers in Zambia and Uganda. I feel very confident about these prices. • Tilapia import prices calculated from official trade statistics may not be accurate, or the latest size patterns may differ from those in 2018. In any case, it would be useful to know the base of the highlighted statement (e.g. export opinions, trade statistics, anecdotal observations, etc.). See above. • More detailed, quantitative information on tilapia consumption in Africa (live/fresh/frozen, size, original, price, etc.) will be highly useful. Agreed, but that was beyond the scope of this report. From: Sarnissa-african-aquaculture <sarnissa-african-aquaculture-bounces@lists.stir.ac.uk<mailto:sarnissa-african-aquaculture-bounces@lists.stir.ac.uk>> On Behalf Of William Leschen via Sarnissa-african-aquaculture Sent: 21 July 2021 10:52 To: sarnissa-african-aquaculture Mailing List <sarnissa-african-aquaculture@lists.stir.ac.uk<mailto:sarnissa-african-aquaculture@lists.stir.ac.uk>>; sarnissa-french-aquaculture@lists.stir.ac.uk<mailto:sarnissa-french-aquaculture@lists.stir.ac.uk> Subject: [BULK]Do Chinese Exporters Still Outcompete Sub-Saharan Africa’s Tilapia? Van: Willem <willem@aqua-spark.nl<mailto:willem@aqua-spark.nl>> Verzonden: woensdag 21 juli 2021 08:29 Aan: Willem van der Pijl <willem@aqua-spark.nl<mailto:willem@aqua-spark.nl>> Onderwerp: Do Chinese Exporters Still Outcompete Sub-Saharan Africa’s Tilapia? [https://mcusercontent.com/d5eb256f9a9def92894b295b9/images/28adb6fb-99e8-c524-e0cb-854d4857f599.jpeg]<https://aqua-spark.us1.list-manage.com/track/click?u=d5eb256f9a9def92894b295b9&id=aadc7557a8&e=408926a755> DO CHINESE EXPORTER STILL OUTCOMPETE SUB-SAHARAN AFRICA'S TILAPIA? One of the concerns many in sub-Saharan Africa express is the competition local producers face from cheap tilapia imported from China. However, for a couple of years now, China’s tilapia exports are declining and, at present, only 10% of its total production of tilapia is exported. While China has been a significant source of competition in the past, this is no longer entirely true, and we can maybe even breathe a sigh of relief: competition from China has forced commercial tilapia producers in sub-Saharan Africa to become more efficient and to build a brand for their products. Their focus may therefore now shift to competition from other proteins, such as chicken, instead. [https://mcusercontent.com/d5eb256f9a9def92894b295b9/images/0c4ec478-da54-c07...] Figure 1: China's tilapia exports to sub-Saharan Africa Source: General Administration of Customs People’s Republic of China "China’s Tilapia Volume Used for Exports Declined from 650,000 MT in 2013 to below 178,000 MT in 2020" While tilapia production in China is believed to be stable at around 1.8m MT, its exports fell dramatically from a live weight equivalent (LWE) of 650,000 MT in 2013 to 178,000 MT in 2020. The LWE of fillet exports dropped the most: from 500,000 MT to 78,000 MT, while the exports of whole fish only dropped from 150,000 MT to 100,000 MT (Figure 2). The decline in exports is a clear indication of China’s booming domestic market—and just like for other seafood, such as shrimp, China’s role as a tilapia exporter might soon be over. This may be the case sooner for larger fish used for fillets than for the smaller whole round tilapia, for which sub-Saharan Africa is still the largest market. "Sub-Saharan Africa Has Become China’s Largest Tilapia Market" According to Chinese customs, after climbing from 75,000 MT in 2013 to 93,000 MT in 2018, sub-Saharan Africa’s imports of Chinese tilapia dropped to 61,000 MT in 2020. Sub-Saharan Africa accounts for 60% of China’s total official whole tilapia exports. Figure one provides an overview of Chinese tilapia to various regions in sub-Saharan Africa. Western Africa is clearly the largest importer of Chinese tilapia and its import volume continues to rise. In 2020, the region imported 42,000 MT according to Chinese export data. The markets in the region are interconnected. While Côte d’Ivoire is clearly the largest importer of Chinese tilapia, part of that import is destined for landlocked markets—such as Burkina Faso, Mali, and Niger—and some product might be informally supplied to Ghana and Nigeria, which have officially banned tilapia imports. Imports into Eastern Africa declined from 16,000 MT in 2015 to 10,000 MT in 2020. Rwanda (40%), Kenya (30%), and Zambia (20%) are the largest importers. While Rwanda increased its imports in 2020 (to 4,000 MT), Kenya’s imports remained flat (at 3,000 MT), and Zambia’s declined (from 12,000 MT in 2013 to only 2,200 MT in 2020). Exports to Middle Africa fluctuated between 15,000 MT and 22,000 MT from 2015 to 2018, dropped to 10,000 MT in 2019, and further to 5,000 MT in 2020. The big plunge would have been caused by reduced imports into Angola and Cameroon. The Democratic Republic of the Congo and Gabon are currently the region’s largest importers. China’s export data also shows a decline in Southern Africa’s imports. Import data from local customs, however, shows a steady increase from 6,300 MT in 2015 to more than 12,000 MT in 2019. [https://mcusercontent.com/d5eb256f9a9def92894b295b9/images/88612e66-835f-7860-58c5-0184e5e548ad.png]<https://aqua-spark.us1.list-manage.com/track/click?u=d5eb256f9a9def92894b295b9&id=758e7d3c48&e=408926a755> Figure 2: Decline in tilapia exports in LWE estimation of actual export volume Source: https://www.trademap.org Note: Export volumes converted to a LWE with a ratio of 0.37 for fillets and an average ratio of 0.9 for whole round, and gutted and scaled tilapia. "Insiders Believe Import Data of China, and Sub-Saharan Africa to be Underreported" Many insiders in the aquaculture industry in sub-Saharan Africa believe that the actual volume of tilapia imported from China might be larger than the volume declared to customs: it is thought that importers and exporters may agree to declare the product as, say, mackerel or as “other fish” to circumvent import duties on tilapia or bans that prohibit the import of Chinese tilapia. Suspicion is fueled by reports which describe higher import numbers than statistics show. An example includes a recent study of the impact that imported Chinese tilapia has on the dynamics of the fish market in Kisumu, Kenya. The 20,000 MT mentioned in the study is much higher than Kenya’s formal import numbers, which, for 2019, were reported at 2,500 MT of tilapia and an additional 8,000 MT of “freshwater and saltwater fish,” possibly also consisting of tilapia, imported from China. This total of 10,500 MT only accounts for half of the volume reported in the study. Either the study overestimated the volume or a considerable amount of product is smuggled into the country. This is just one example. There are suspicions that tilapia is also smuggled into other countries, such as Ghana, Nigeria, and Zambia. One industry source even claims that, especially when looking at medium-sized tilapia, legitimate imports are increasingly outcompeted by local producers. He therefore believes that legitimate imports consist mainly of small sizes, and that larger sizes might be smuggled into the country to escape import duties. [https://mcusercontent.com/d5eb256f9a9def92894b295b9/images/615af65f-966c-b489-a3f9-8b950ef56c36.jpg]<https://aqua-spark.us1.list-manage.com/track/click?u=d5eb256f9a9def92894b295b9&id=7589c91160&e=408926a755> Figure 3: CIF prices delivered to ports in sub-saharan africa quoted by chinese exporters in march 2021 "Chinese Exporters Offer Tilapia Delivered to Ports in Sub-Saharan Africa at $0.85-$1.50, Depending on Size" Chinese exporters sell whole tilapia in various sizes, ranging from 100/200 g to over 800 g. The most common size tilapia imported into sub-Saharan Africa is 100/200 and 200/300 g, but regional differences exist: Eastern, Middle, and Southern Africa tend to import small and medium-sized tilapia, while Western Africa tends to import medium-sized tilapia as well as some larger sizes. In early 2021, Chinese sellers offered tilapia at prices (CIF) ranging from $0.85/kg for 100/200 g to $1.53/kg for over 800 g. These prices may drop during the year when the peak harvest season in China starts in June, and when the—currently extremely high—container prices tumble. profile of the company and country we invest in. When looking at these prices, it’s crucial to understand that the quoted prices refer to the size of the fish after 20% glazing. This means that a product of 200-300 g actually consists of about 150-250 g tilapia that is procured at a lower price. A source in China states that his clients in sub-Saharan Africa are normally not willing to order a net weight product because of the higher price they would have to pay. This could indicate that Chinese exporters are not competitive in the market with a net-weight product. Chinese exporters can sell at these prices because they receive a subsidy of 10% for exporting tilapia to sub-Saharan Africa. In some cases, the smaller tilapia is believed to primarily be a by-product of farms that mainly target larger sizes. As there is no domestic market for this product, Chinese farmers are willing to sell it to processors at around—or even below—the actual production cost. "Local Producers Have Started Outcompeting Chinese Medium-Sized and Large Tilapia" Even though the actual volume of Chinese tilapia sold on the market in sub-Saharan Africa might still be around 100,000 MT, this should not be seen as a major threat to the competitiveness of local tilapia production. While the low prices for the smaller Chinese tilapia are hard to compete with, commercial local producers have started competing with Chinese prices for medium-sized and large tilapia. While the small Chinese tilapia is mainly sold to the lowest-income urban consumers of sub-Saharan Africa, medium-sized tilapia, more expensive than the poorest can afford, is sold mostly to the urban middle class. With Chinese tilapia being less of a threat, competition might come from other animal proteins instead. 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Many thanks Willem. I dig a bit deeper and came up with the table below, which seems to raise more issues than it clarifies. · Regarding China’s export of frozen whole tilapias (HS030323) to Côte d'Ivoire, China’s export data have been persistently lower than Côte d'Ivoire’s import data in terms of volume yet higher in terms of value, which led to much higher China’s export prices than Côte d'Ivoire’ import prices. A similar pattern also happened to Zambia, and to a lesser extent, happened to Cameroon (2017) and Kenya (2020). · How to explain such discrepancies? I don’t know. We can venture some speculations, such as (i) exporter’s tendency to inflate the value for tax rebate and importer’s tendency to understate the value to mitigate tariff; or (ii) according to Ray Kourie’s insights shared in another email, part of African countries’ tilapia import from China were those rejected and re-directed (hence cheap) consignments that were not recorded in China’s trade statistics as export to Africa. · But these are only conjectures that may not survive scrutiny. The discrepancies can only be pinned down by rigorous investigations. · Despite all their imperfections, official statistics (international or national) may be the best, if not the only, option for certain analyses. Therefore, it is crucial to continue improving official statistics. The review of FAO production data for sub-Saharan African in your report will surely be very helpful in this regard. Look forward to reading the report. Many thanks in advance. Best, Junning China’s export of HS030323 (frozen whole tilapias) to four countries in Africa Year Importer UN Comtrade data (accessed on 21 July 2021) FAO Global Fisheries and Aquacultures Commodities Statistics v.2020.1.0 China's export to each country Each country's import from China Each country's import from world Volume (tonnes) Value (USD 1000) Price (USD/kg) Volume (tonnes) Value (USD 1000) Price (USD/kg) Volume (tonnes) Value (USD 1000) Price (USD/kg) 2017 Côte d'Ivoire 27 130 53 944 1.99 35 019 37 721 1.08 35 483 38 187 1.08 2018 Côte d'Ivoire 26 432 62 034 2.35 39 379 45 414 1.15 39 542 45 596 1.15 2019 Côte d'Ivoire 20 110 48 067 2.39 45 783 51 270 1.12 2020 Côte d'Ivoire 21 228 51 236 2.41 2017 Cameroon 5 653 12 954 2.29 7 626 8 618 1.13 7 626 8 619 1.13 2018 Cameroon 13 344 33 636 2.52 30 364 37 432 1.23 2019 Cameroon 3 203 7 185 2.24 2020 Cameroon 977 2 318 2.37 2017 Kenya 7 170 15 508 2.16 2018 Kenya 7 405 16 914 2.28 2019 Kenya 3 851 10 894 2.83 2 513 2 774 1.10 2020 Kenya 3 043 8 838 2.90 9 778 10 005 1.02 2017 Zambia 6 366 11 802 1.85 10 873 6 112 0.56 14 779 12 890 0.87 2018 Zambia 6 339 13 788 2.18 7 200 4 487 0.62 8 638 7 892 0.91 2019 Zambia 4 011 7 712 1.92 4 924 4 352 0.88 2020 Zambia 2 219 3 577 1.61 2 642 2 503 0.95 From: Willem van der Pijl <willem@aqua-spark.nl> Sent: 21 July 2021 21:50 To: Cai, Junning (NFIAN) <Junning.Cai@fao.org> Cc: sarnissa-french-aquaculture@lists.stir.ac.uk; William Leschen <williamleschen@gmail.com> Subject: RE: [BULK]Do Chinese Exporters Still Outcompete Sub-Saharan Africa’s Tilapia? Hi Cai, Thanks. Yes I conduct the similar kind of analysis as you do below but Im more familiar with shrimp than with tilapia. Anyway, it seems that the discrepancy is mainly about the US, and even there, there is still a negative trend in the volume of fillets, whatever source you use. For Africa, there are considerable discrepancies as well, but also there, these discrepancies do create some uncertainty, but still you can see broad patterns that are good enough to identify some trends that help to understand the situation. Be sure to check the report. There I also do a review of FAO production data for sub-Saharan Africa, which is a drama for itself. You can subscribe to Aqua-Insights so you get notified once the report is released here: www.aqua-spark.nl/aqua-insights<http://www.aqua-spark.nl/aqua-insights> Have a nice evening! Willem van der Pijl Editor-in-Chief Aqua Insights [Aqua-Spark email signature] The content of this email is confidential and intended for the recipient specified in this message only. It is strictly forbidden to share any part of this message with any third party, without written consent from the sender. If you received this message by mistake, please reply, so that we can ensure that such a mistake does not occur in the future, and then delete the message. Van: Cai, Junning (NFIAN) <Junning.Cai@fao.org<mailto:Junning.Cai@fao.org>> Verzonden: woensdag 21 juli 2021 19:52 Aan: Willem van der Pijl <willem@aqua-spark.nl<mailto:willem@aqua-spark.nl>> CC: sarnissa-french-aquaculture@lists.stir.ac.uk<mailto:sarnissa-french-aquaculture@lists.stir.ac.uk>; William Leschen <williamleschen@gmail.com<mailto:williamleschen@gmail.com>> Onderwerp: RE: [BULK]Do Chinese Exporters Still Outcompete Sub-Saharan Africa’s Tilapia? Dear Willem, Many thanks for your clarifications. Data inconsistency is a norm rather than exception. It would be useful to conduct in-depth, comprehensive studies on tilapia value chains in Africa to establish some baselines, also to clarify some myths (e.g. anecdotal stories about cheap tilapia import from China). Some further notes on UN Comtrade and FAO statistics on tilapia trade are in the following. * Theoretically, country A’s export to country B = country B’s import from country A. But trade data often do not obey this identity for multiple reasons. * In the case of tilapia trade, from the UN Comtrade statistics, we can see that the US reported that it imported 104 810 tonnes of HS030461 (frozen tilapia fillets) from China in 2020, whereas China reported that it only exported 4 834 tonnes of HS030461 to the US in the same year. A huge discrepancy! * On the other hand, according to the FAO statistics, in 2018, China reported that it exported 196 943 tonnes of “Tilapias prepared or preserved, not minced” under HS160419, whereas the entire world reported little tilapia import under HS160419. * Therefore, one explanation is that a substantial amount of frozen tilapia fillet export from China to the US have been recorded by China under HS160419, while they were recorded by the US under HS030461. * The tilapia import prices in the text below highlighted in blue are based on UN Comtrade statistics – they are some old estimates and I am also surprised to see the relatively high prices so may need to check the country details to understand them better. As the price pattern in the text highlighted in blue is inconsistent with the size pattern indicated in the article (i.e. larger size tilapia import in Western Africa than Eastern, Middle or Southern Africa), my main point was to find out the source of the information regarding the size pattern across regions. * Data from FAO fish trade statistics <http://www.fao.org/fishery/statistics/global-commodities-production/en> are mostly consistent with UN Comtrade statistics<https://comtrade.un.org/data/>, and both of them are primarily based on countries’ custom data. One advantage of the FAO statistics is that it contains more detailed information on fisheries and aquaculture commodities. Hope these help. Many thanks again for the discussion. Best, Junning From: Willem van der Pijl <willem@aqua-spark.nl<mailto:willem@aqua-spark.nl>> Sent: 21 July 2021 16:53 To: Cai, Junning (NFIAN) <Junning.Cai@fao.org<mailto:Junning.Cai@fao.org>> Cc: sarnissa-french-aquaculture@lists.stir.ac.uk<mailto:sarnissa-french-aquaculture@lists.stir.ac.uk>; William Leschen <williamleschen@gmail.com<mailto:williamleschen@gmail.com>> Subject: RE: [BULK]Do Chinese Exporters Still Outcompete Sub-Saharan Africa’s Tilapia? Hi Cai, Thanks for your careful read. See my responses below. Willem van der Pijl Editor-in-Chief Aqua Insights [Aqua-Spark email signature] The content of this email is confidential and intended for the recipient specified in this message only. It is strictly forbidden to share any part of this message with any third party, without written consent from the sender. If you received this message by mistake, please reply, so that we can ensure that such a mistake does not occur in the future, and then delete the message. Van: William Leschen <williamleschen@gmail.com<mailto:williamleschen@gmail.com>> Verzonden: woensdag 21 juli 2021 15:13 Aan: sarnissa-african-aquaculture Mailing List <sarnissa-african-aquaculture@lists.stir.ac.uk<mailto:sarnissa-african-aquaculture@lists.stir.ac.uk>>; Cai, Junning (FIAA) <Junning.Cai@fao.org<mailto:Junning.Cai@fao.org>>; Willem van der Pijl <willem@aqua-spark.nl<mailto:willem@aqua-spark.nl>> Onderwerp: Fwd: [BULK]Do Chinese Exporters Still Outcompete Sub-Saharan Africa’s Tilapia? Thanks Cai for your feedback and response to the article we put up this morning from Willem and Aquaspark - Would welcome any of our other SARNISSA Followers on this email forum to send in their thoughts, experiences and feedback on this subject - it has been in the media news across SS African aquaculture for the last years - always good to get views of others involved in the tilapia value chain suppliers producers market chain etc Best wishes Will ---------- Forwarded message --------- From: Cai, Junning (NFIAN) <Junning.Cai@fao.org<mailto:Junning.Cai@fao.org>> Date: Wed, 21 Jul 2021 at 14:06 Subject: RE: [BULK]Do Chinese Exporters Still Outcompete Sub-Saharan Africa’s Tilapia? To: sarnissa-french-aquaculture@lists.stir.ac.uk<mailto:sarnissa-french-aquaculture@lists.stir.ac.uk> <sarnissa-french-aquaculture@lists.stir.ac.uk<mailto:sarnissa-french-aquaculture@lists.stir.ac.uk>> Cc: William Leschen <williamleschen@gmail.com<mailto:williamleschen@gmail.com>> Very interesting and informative article. Many thanks for sharing. I have some comments on two excerpts of the article in the following for discussion. Many thanks. Best, Junning “While tilapia production in China is believed to be stable at around 1.8m MT, its exports fell dramatically from a live weight equivalent (LWE) of 650,000 MT in 2013 to 178,000 MT in 2020. The LWE of fillet exports dropped the most: from 500,000 MT to 78,000 MT, while the exports of whole fish only dropped from 150,000 MT to 100,000 MT (Figure 2).” • According to UN Comtrade statistics, the United States imported 104 810 tonnes (product weight; close to 300 000 tonnes LWE) of frozen tilapia fillets (HS030461) from China in 2020, which was higher than the 92 810 tonnes in 2019 in spite of the trade war and the COVID pandemics. I have used the data of Chinese customs. There might be discrepancy between US NOAA and Chinese customs. I will have to check that out and check the data you present below. • However, the UN Comtrade statistics indicate only 31 697 tonnes and 4 834 tonnes of China’s export of HS030461 to the United States in 2019 and 2020, respectively. I don’t understand this comment. These are different statistics than you provide in the bullet point above while its both UN comtrade. These numbers are more in line with Chinese customs. Did you mention the wrong source? • The discrepancies between the import and export data are because a large amount of China’s export of tilapia fillets has been recorded under HS160419 (a commodity group including not only tilapia but also other fish products) in China’s export data whereas in HS030461 in the US import data. This is an interesting point which if I can confirm it, would require rectification of my blog (and article in the report which is too late now as it went to print – this would than be done in October this year). Which Im happy to make if it is valid. But… Has this been a change over time? Or has this always been the case? Otherwise it doesn’t explain the trend which you see in Chinese export data. So if you are right, the volume under 160419 should have drastically increased. • According to FAO statistics, China’s 444 851 tonnes of tilapia export in 2018 comprised 196 943 tonnes of HS160419 (Tilapias prepared or preserved, not minced), 135 189 tonnes of HS030323 (frozen whole tilapia) and 112 719 tonnes of HS030461 (frozen tilapia fillets). What is the source of FAO statistics on trade data? Do you consider these as being more reliable than FAO production statistics? • In summary, the observation in the highlighted text could reflect a data issue. I agree. There might be a data issue. We might need to ask Urner Barry for an estimate based on the container files. This would probably be the only way to get a more realistic perspective. “Chinese exporters sell whole tilapia in various sizes, ranging from 100/200 g to over 800 g. The most common size tilapia imported into sub-Saharan Africa is 100/200 and 200/300 g, but regional differences exist: Eastern, Middle, and Southern Africa tend to import small and medium-sized tilapia, while Western Africa tends to import medium-sized tilapia as well as some larger sizes.” • I don’t have the most updated data on tilapia trade price. But according to the UN Comtrade statistics, in 2018, the average import price of frozen whole tilapia was around USD 1.49/kg for sub-Saharan Africa, USD 1.92 for Eastern Africa, USD 1.60/kg for Middle Africa, USD 1.32/kg for Western Africa, and USD 0.95/kg for Southern Africa. These prices are inconsistent with the observations described in the highlighted text above – see Figure 3 in the article for the prices of tilapia by size. I think average per/kg prices are not a good price indication. The prices I quoted are quoted in May this year by two of the largest exporters in China and confirmed by two importers in different African countries and by some of the large producers in Zambia and Uganda. I feel very confident about these prices. • Tilapia import prices calculated from official trade statistics may not be accurate, or the latest size patterns may differ from those in 2018. In any case, it would be useful to know the base of the highlighted statement (e.g. export opinions, trade statistics, anecdotal observations, etc.). See above. • More detailed, quantitative information on tilapia consumption in Africa (live/fresh/frozen, size, original, price, etc.) will be highly useful. Agreed, but that was beyond the scope of this report. From: Sarnissa-african-aquaculture <sarnissa-african-aquaculture-bounces@lists.stir.ac.uk<mailto:sarnissa-african-aquaculture-bounces@lists.stir.ac.uk>> On Behalf Of William Leschen via Sarnissa-african-aquaculture Sent: 21 July 2021 10:52 To: sarnissa-african-aquaculture Mailing List <sarnissa-african-aquaculture@lists.stir.ac.uk<mailto:sarnissa-african-aquaculture@lists.stir.ac.uk>>; sarnissa-french-aquaculture@lists.stir.ac.uk<mailto:sarnissa-french-aquaculture@lists.stir.ac.uk> Subject: [BULK]Do Chinese Exporters Still Outcompete Sub-Saharan Africa’s Tilapia? Van: Willem <willem@aqua-spark.nl<mailto:willem@aqua-spark.nl>> Verzonden: woensdag 21 juli 2021 08:29 Aan: Willem van der Pijl <willem@aqua-spark.nl<mailto:willem@aqua-spark.nl>> Onderwerp: Do Chinese Exporters Still Outcompete Sub-Saharan Africa’s Tilapia? [https://mcusercontent.com/d5eb256f9a9def92894b295b9/images/28adb6fb-99e8-c524-e0cb-854d4857f599.jpeg]<https://aqua-spark.us1.list-manage.com/track/click?u=d5eb256f9a9def92894b295b9&id=aadc7557a8&e=408926a755> DO CHINESE EXPORTER STILL OUTCOMPETE SUB-SAHARAN AFRICA'S TILAPIA? One of the concerns many in sub-Saharan Africa express is the competition local producers face from cheap tilapia imported from China. However, for a couple of years now, China’s tilapia exports are declining and, at present, only 10% of its total production of tilapia is exported. While China has been a significant source of competition in the past, this is no longer entirely true, and we can maybe even breathe a sigh of relief: competition from China has forced commercial tilapia producers in sub-Saharan Africa to become more efficient and to build a brand for their products. Their focus may therefore now shift to competition from other proteins, such as chicken, instead. [https://mcusercontent.com/d5eb256f9a9def92894b295b9/images/0c4ec478-da54-c07...] Figure 1: China's tilapia exports to sub-Saharan Africa Source: General Administration of Customs People’s Republic of China "China’s Tilapia Volume Used for Exports Declined from 650,000 MT in 2013 to below 178,000 MT in 2020" While tilapia production in China is believed to be stable at around 1.8m MT, its exports fell dramatically from a live weight equivalent (LWE) of 650,000 MT in 2013 to 178,000 MT in 2020. The LWE of fillet exports dropped the most: from 500,000 MT to 78,000 MT, while the exports of whole fish only dropped from 150,000 MT to 100,000 MT (Figure 2). The decline in exports is a clear indication of China’s booming domestic market—and just like for other seafood, such as shrimp, China’s role as a tilapia exporter might soon be over. This may be the case sooner for larger fish used for fillets than for the smaller whole round tilapia, for which sub-Saharan Africa is still the largest market. "Sub-Saharan Africa Has Become China’s Largest Tilapia Market" According to Chinese customs, after climbing from 75,000 MT in 2013 to 93,000 MT in 2018, sub-Saharan Africa’s imports of Chinese tilapia dropped to 61,000 MT in 2020. Sub-Saharan Africa accounts for 60% of China’s total official whole tilapia exports. Figure one provides an overview of Chinese tilapia to various regions in sub-Saharan Africa. Western Africa is clearly the largest importer of Chinese tilapia and its import volume continues to rise. In 2020, the region imported 42,000 MT according to Chinese export data. The markets in the region are interconnected. While Côte d’Ivoire is clearly the largest importer of Chinese tilapia, part of that import is destined for landlocked markets—such as Burkina Faso, Mali, and Niger—and some product might be informally supplied to Ghana and Nigeria, which have officially banned tilapia imports. Imports into Eastern Africa declined from 16,000 MT in 2015 to 10,000 MT in 2020. Rwanda (40%), Kenya (30%), and Zambia (20%) are the largest importers. While Rwanda increased its imports in 2020 (to 4,000 MT), Kenya’s imports remained flat (at 3,000 MT), and Zambia’s declined (from 12,000 MT in 2013 to only 2,200 MT in 2020). Exports to Middle Africa fluctuated between 15,000 MT and 22,000 MT from 2015 to 2018, dropped to 10,000 MT in 2019, and further to 5,000 MT in 2020. The big plunge would have been caused by reduced imports into Angola and Cameroon. The Democratic Republic of the Congo and Gabon are currently the region’s largest importers. China’s export data also shows a decline in Southern Africa’s imports. Import data from local customs, however, shows a steady increase from 6,300 MT in 2015 to more than 12,000 MT in 2019. [https://mcusercontent.com/d5eb256f9a9def92894b295b9/images/88612e66-835f-7860-58c5-0184e5e548ad.png]<https://aqua-spark.us1.list-manage.com/track/click?u=d5eb256f9a9def92894b295b9&id=758e7d3c48&e=408926a755> Figure 2: Decline in tilapia exports in LWE estimation of actual export volume Source: https://www.trademap.org Note: Export volumes converted to a LWE with a ratio of 0.37 for fillets and an average ratio of 0.9 for whole round, and gutted and scaled tilapia. "Insiders Believe Import Data of China, and Sub-Saharan Africa to be Underreported" Many insiders in the aquaculture industry in sub-Saharan Africa believe that the actual volume of tilapia imported from China might be larger than the volume declared to customs: it is thought that importers and exporters may agree to declare the product as, say, mackerel or as “other fish” to circumvent import duties on tilapia or bans that prohibit the import of Chinese tilapia. Suspicion is fueled by reports which describe higher import numbers than statistics show. An example includes a recent study of the impact that imported Chinese tilapia has on the dynamics of the fish market in Kisumu, Kenya. The 20,000 MT mentioned in the study is much higher than Kenya’s formal import numbers, which, for 2019, were reported at 2,500 MT of tilapia and an additional 8,000 MT of “freshwater and saltwater fish,” possibly also consisting of tilapia, imported from China. This total of 10,500 MT only accounts for half of the volume reported in the study. Either the study overestimated the volume or a considerable amount of product is smuggled into the country. This is just one example. There are suspicions that tilapia is also smuggled into other countries, such as Ghana, Nigeria, and Zambia. One industry source even claims that, especially when looking at medium-sized tilapia, legitimate imports are increasingly outcompeted by local producers. He therefore believes that legitimate imports consist mainly of small sizes, and that larger sizes might be smuggled into the country to escape import duties. [https://mcusercontent.com/d5eb256f9a9def92894b295b9/images/615af65f-966c-b489-a3f9-8b950ef56c36.jpg]<https://aqua-spark.us1.list-manage.com/track/click?u=d5eb256f9a9def92894b295b9&id=7589c91160&e=408926a755> Figure 3: CIF prices delivered to ports in sub-saharan africa quoted by chinese exporters in march 2021 "Chinese Exporters Offer Tilapia Delivered to Ports in Sub-Saharan Africa at $0.85-$1.50, Depending on Size" Chinese exporters sell whole tilapia in various sizes, ranging from 100/200 g to over 800 g. The most common size tilapia imported into sub-Saharan Africa is 100/200 and 200/300 g, but regional differences exist: Eastern, Middle, and Southern Africa tend to import small and medium-sized tilapia, while Western Africa tends to import medium-sized tilapia as well as some larger sizes. In early 2021, Chinese sellers offered tilapia at prices (CIF) ranging from $0.85/kg for 100/200 g to $1.53/kg for over 800 g. These prices may drop during the year when the peak harvest season in China starts in June, and when the—currently extremely high—container prices tumble. profile of the company and country we invest in. When looking at these prices, it’s crucial to understand that the quoted prices refer to the size of the fish after 20% glazing. This means that a product of 200-300 g actually consists of about 150-250 g tilapia that is procured at a lower price. A source in China states that his clients in sub-Saharan Africa are normally not willing to order a net weight product because of the higher price they would have to pay. This could indicate that Chinese exporters are not competitive in the market with a net-weight product. Chinese exporters can sell at these prices because they receive a subsidy of 10% for exporting tilapia to sub-Saharan Africa. In some cases, the smaller tilapia is believed to primarily be a by-product of farms that mainly target larger sizes. As there is no domestic market for this product, Chinese farmers are willing to sell it to processors at around—or even below—the actual production cost. "Local Producers Have Started Outcompeting Chinese Medium-Sized and Large Tilapia" Even though the actual volume of Chinese tilapia sold on the market in sub-Saharan Africa might still be around 100,000 MT, this should not be seen as a major threat to the competitiveness of local tilapia production. While the low prices for the smaller Chinese tilapia are hard to compete with, commercial local producers have started competing with Chinese prices for medium-sized and large tilapia. While the small Chinese tilapia is mainly sold to the lowest-income urban consumers of sub-Saharan Africa, medium-sized tilapia, more expensive than the poorest can afford, is sold mostly to the urban middle class. With Chinese tilapia being less of a threat, competition might come from other animal proteins instead. 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participants (2)
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Cai, Junning (NFIAN) -
Willem van der Pijl