Demand led production – not all markets are created equal

Zuridah Merican

The adage ‘No one size fits all’ holds true for aquaculture markets. From seminars and webinars, various countries have touted when they will achieve the one million tonne production number for shrimp. While being brave, it could be a foolish and totally wrong benchmark. Asian shrimp producers seem so keen on being production driven that they forget who is going buy their shrimp, let alone why the market should buy Asian shrimp over other shrimp, seafood and protein sources.

If the Covid-19 pandemic in 2020 has taught our industry anything, it is that we should focus on demand led production. With lockdowns, the global economy has suffered, and many countries are now looking to increase aquaculture exports to drive the economy. Consequently, the markets should be analysed as well.

Prior to the pandemic, the US shrimp market relied heavily on the food service sector but with restrictions on dining-out, the share of the retail sector increased as many households started cooking seafood at home. In January 2021, Bloomberg reported that seafood consumption at home increased by 25%. However, the retail sector and food service seek different products. While dining out offers the more impressive HOSO shrimp, households buying from the retail sector look for the 3Rs; ready to cook, ready to heat and ready to eat shrimp which comprise peel deveined, cooked and marinated products.

In the EU, the northern member states prefer peel deveined shrimp while the southern states look for whole shrimp, which are generally defrosted and cooked commercially daily. Willem van der Pijl asked a pertinent question in his recent Shrimp Blog – ‘Although 2020 was not a bad year for Peneaus shrimp imports in the EU, Asia fared badly. Does Asian shrimp have a future in the EU market?’ Willem will give his views in the session - Understanding Markets and Consumers at The Aquaculture Roundtable Series (TARS 2021) on August 18. With increased Covid-19 inspections (for the packaging, not the food item) for imported seafood into China, Rabobank reported a 50% and 25% fall in imported seafood for 4Q 2020 and 1Q 2021, respectively. China, a large importer of live black tiger shrimp has also seen reduced volumes of this product form.

Can the marine fish sector learn from the Norwegian salmon industry which developed a new market for its product in the 1980s? This is a journey of culinary history. The Japanese love their sushi and sashimi but it was mainly tuna and seabream from capture fisheries. Norway had to find markets for the increasing production of salmon. So back in 1986, the then Norwegian fisheries minister introduced salmon for sushi in Japan and today, the salmon sushi is the biggest global food trend. Imagine Norwegian salmon and Japanese sushi, said Asbjørn Warvik Rørtveit, Norwegian Seafood Council (NSC), Thailand, at the recent "Salmon e-dialogue 2021” organised by Infofish. “The acceptance was due to the red flesh colour and of course the link between sustainability and Norway.”

The tilapia and pangasius, our two leading freshwater commodities, have thrived on export markets in the US and EU, respectively, but supply chain disruptions which emanated from the pandemic have increased shipping cost from Asia. Cold chain transport costs have increased more than 4 times from Vietnam to the US. Perhaps it is time to develop a local market in-country.

Demand led production also includes listening to consumer wishes which is often influenced by NGOs and large supermarket chains. Consumer demands have not changed over the last 2 years, but they have been reenforced. There is an overall demand for sustainability and perhaps made more urgent by Netflix’ Seaspiracy documentary. In addition, there are specific demands for each species. In shrimp, animal welfare groups have been asking to avoid eyestalk ablation during broodstock maturation. Retail buyers in UK and EU supermarket chains have avoided tilapia due to hormonal treatments in producing all male fish for better growth. In marine fish species, aquaculture certification bodies are looking for zero-use of trash fish in feeding.

Whichever species, each producing country must look at its strengths and weaknesses and then target products to match the segment that provides the best opportunity because not all markets are created equal. Otherwise, we will suffer the lowest price for our million tonnes of shrimp!

OUR MISSION

We strive to be the beacon for the regional aquaculture industry. We will be the window to the world for Asia-Pacific aquaculture producers and a door to the market for international suppliers. We strive to be the forum for the development of self-regulation in the Industry.

If you have any comments, please email: zuridah@aquaasiapac.com