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Big changes are coming to the Chinese seafood market — and Norwegian producers are ready to seize the opportunity.
Commanding center stage at one of Beijing’s many seafood markets are live crayfish and crabs in small aquarium tanks.
The only dead fish you might find here are the salmon fillets from Canada.
Also standing out from the crowd are 15 or so seemingly bewildered Norwegians. They’re business delegates being shown around the market.
Among them are Jorn-Aage Stikholmen, managing director of Berg Seafood (Svolvaer, northern Norway), and Yee Wai Cheung, chairman of the newly founded export company Aurora Seafood.
Both are aiming to muscle a way in for Norwegian stockfish to be displayed among the salmon and crab.
“There are 300 million people in that country that have the same amount of leverage in consumer power as we have in Norway, meaning that anything that can be termed as seafood can find its way here,” said Stikholmen, who is also co-owner of the export company.
“Moreover, they are keen to know the unabridged history of the products they are being offered. Milk is one example,” he said. “They import milk from Germany because they consider their own milk as impure.”
Push Up Prices in Norway
Currently, sales of stockfish are minimal in China, but Cheung, who has been a resident of the country for many years, is convinced stockfish will eventually catch on.
“Our primary concern is to sell stockfish accompanied by by-products, but given the market as it is now we must start with something else, such as frozen liver and milt,” he said.
At present the stockfish market is dominated by two countries, China and Italy, and it’s a buyer’s market.
If China becomes a stable, major customer for Norwegian stockfish, this situation could change.
“In terms of sales the salmon manages alright regardless, but the cod needs a new market in order to bump up prices. Cod prices are actually too low,” Stikholmen said. “Not so for the fisherman, but at every level after the fisherman. We can turn that around if greater volumes are sent here.”
Cod exports didn’t suffer as great a loss as salmon exports following China’s reaction to the Nobel Peace Prize award in 2010.
Previously consignments consisted mainly of frozen cod that could be quarantined for a period in customs warehouses, after which they were exported to China for processing and further export.
In recent years the wealthy middle class of China has expanded significantly in numbers, and even though this only amounts to a marginal elite in a country that has more than 1 billion inhabitants, it still adds up to a lot of people.
It is first and foremost this elite the exporters want to sell fresh cod and stockfish to.
During the delegation’s visit last week the Norwegian Seafood Council (NSC) presented figures that indicate the amount of Norwegian cod consumed by the Chinese could increase from the current 5,000 metric tons, to around 40,000 metric tons in eight years’ time.
Good for the Skin
“You know, Chinese people believe that eating fish skin is good for human skin, so we sell cod tails to Chinese women,” said Amy Zhao, chair of Qingdao Spring Seafoods, while she demonstrated how they sell cod to the Chinese via a mobile app.
Together with the company’s Managing Director Kevin Meng, she is part of the reason why the Chinese have Norwegian cod on their dinner table.
Before 2014 they bought and added value to processed Norwegian cod, which they exported back to Europe and North America. But two years ago they instead focused on the national market.
Last year cod sales brought them around NOK 25 million ( € 2.6 million/$2.9 million), and this year sales are expected to be in the region of NOK 120 million ( € 12.6 million/$14 million), according to Meng.
“During the last two years we have tested out different products in an effort to reach out to the Chinese population. Some products will be eliminated accordingly. Swim bladders for example were ignored previously, but are popular in China now. Also dried bone is popular as a snack with beer,” he said.
Kevin Meng, managing director at Qingdao Spring Seafoods, with Amy Zhao, chair of Qingdao Spring Seafoods.
Competition
During the course of the delegation’s trip the Norwegian Minister of Fisheries Per Sandberg and Chinese counterparts inked a salmon protocol as part of the normalization process between Norway and China, and as an enhancement of trade relations.
“In that ties between China and Norway will now become closer, I think more fish will come to China and I will have more competition,” said Meng. “However, I think the Chinese market is big enough, and together I believe we can further enlighten Chinese people about Norwegian seafood.”
Importers don’t regard relations with Norway as the primary consideration in the future though, rather how much Chinese personal incomes will grow.
“In Europe growth won’t be as considerable in the time ahead. In China growth will be like this,” said Zhao, holding her hand up almost vertically.
According to Zhao, Chinese experts anticipate another 100 million persons will join the ranks of the rich middle class in the next few years. It is these people that are focused on healthy food and wild caught fish.
Changes in the Fishing Fleet
Fish paste balls also have a market in China. IntraFish sister publication Fiskeribladet met up with Geir Wilhelm Wold, managing director of Vesteraalens, who is building a new factory at Sortland.
He currently sells fish balls in Norway and fish oil to other countries, but as soon as the new factory has been built, most of the fish balls will be exported.
Wold has previously attempted to get hold of trawl quotas to ensure he has an adequate supply of raw materials, and is now calling for changes to regulations for the entire fleet.
“China is the most important single market in Asia, and they are willing to pay the going price. But exploitation of this market must be coordinated with Norwegian producers ramping up their ability to supply according to market demand,” said Wold.
He is adapting the new factory at Sortland to cater for what he learns about Chinese lifestyles/living habits.
So far he has ascertained that the fish balls he exports to China must be a little smaller than those he sells in Norway.
Likewise he said the fleet must adapt accordingly. This means a less hefty seasonal peak and that more cod must be delivered fresh.
“The minimum floor price system can continue, but prices must be based to an even greater extent on market demand. I also think the live fish investment and fresh fish arrangement is the way to go,” he said.
Back at the seafood market in Beijing a customer is poking the crabs in the aquarium to see if they are still alive.
Stikholmen is confident the Chinese will have the effect of a healthy tonic to the Norwegian seafood industry, as long as one doesn’t offend the dictatorial regime.
“We lost our way in relation to trading with China when the Peace Prize was awarded here – and we learned that China is a country you do not want to get on the wrong side of,” he said.
Geir Wilhelm Wold, managing director of Vesteraalens.