Fish market Exporters from around the world flock to Asia’s largest seafood trade show

loading...

SHANGHAI, China – China is both the world’s largest seafood importer and exporter. Its fish sales to the United States alone ballooned to almost $900 million in 2002 from $300 million in 1998.

If those facts seem contradictory, they’re a good illustration of the confusion that awaits seafood exporters hoping to break into the vast and growing Chinese market. The China Fisheries and Seafood Exposition is one of the places they go for help to unravel the puzzle.

The largest seafood trade show in Asia – it was held Oct. 29-31 this year in this most modern of Chinese cities – draws upward of 50,000 visitors representing fishmongers from 50 countries. Traders from traditional producers like Norway and the United States are always apparent, but so are those one might not expect, such as Karachi, Pakistan-based People Fisheries Ltd., which sent sales executive Bashir Ahmed Zaidi to try to expand the company’s conger eel and ribbon fish sales.

Chinese cuisine may be the most creative in the world. In Beijing, the Donganmen Yeshi, or night market, offers fried silkworms on a stick, as well as more common fare like beef, chicken, pork and whole skinned frogs, also on a stick.

Despite this variety, fish is China’s favorite food, as captured in the traditional saying “A meal is not a meal without fish.”

“Being a Yankee and having grown up eating the traditional New England-type foods, it amazes me to see what they eat over here. I do enjoy trying all these new types of food, but I will not eat worms or bug-like things,” said Bowden Russell, vice president of international sales for Gloucester, Mass.-based National Fish & Seafoods. Russell has been attending the China expo for five of its eight years, but his company has never exhibited a single fin or shell.

“We have never displayed our products at the show because I am here more in a sourcing capacity and not on a marketing venture,” Russell explained. “My position as international procurement for National Fish requires that I stay in tune with all viable supplies of frozen raw materials for our production facility.”

Hank Soule of the Portland Fish Exchange said Maine lobster has found a market in China because of its unique reputation and status in the seafood world. But otherwise, Soule said, China hasn’t had much of an impact on the Maine fishery. He didn’t attend the Shanghai show.

Soule said the Maine processing industry could eventually be hurt by China because of its cheap labor. Some companies have found it cheaper to send fish to China, process it there, and then send it back to the states, Soule said.

But so far that’s only a fear for most U.S. processors. And, Soule said, Maine’s whitefish industry has not been affected by the China trade.

Buying, selling or tracking the competition, players in the East Asian seafood market use the expo as a living resource, not just for the fish trade but to measure China’s progress in the development of a modern business system. Frank Mercker of Seattle-based Arrowac Fisheries Inc. has displayed wild Alaska salmon, crab, halibut and other products at all eight expos.

The Chinese have made a lot of progress in learning to do business, Mercker said. “They’ve gotten used to international trading terms and conditions.”

“China is becoming the world’s primary manufacturer, whether it’s computers, refrigerators or fish,” added Peter Redmayne, president of Sea Fare Expositions Inc., which created the expo in cooperation with China’s Ministry of Agriculture.

This year’s expo grew to more than 700 booths from 500 at last year’s event in Qingdao. The large majority of the expansion came from Chinese companies, as the show has morphed from a safe and efficient venue for first-time samplers of China’s intimidating streets and economy to a practical forum where people come to do business.

Companies that have developed partners and markets readily forgo the $400-per-square-yard cost of a booth, the most expensive of world’s major seafood trade shows, but the expo continues to welcome newcomers willing to take the risks needed to win the potential for fortune of China’s expanding middle class.

“It’s a very untamed market,” said Michael Pedersen, business development manager for Shetland Catch, a herring and mackerel producer from the Shetland Islands in Scotland.

Shetland Catch, already successful in Japan, South Korea and Russia, spent three years researching the Chinese market before investing more than ?30,000 in this year’s expo as part of what the company expects to be a long-term foray.

“We have seen more and more mackerel going to China for reprocessing, and we thought we’d be better off going over here and meeting the players,” Pedersen said. “Our business plan is to do very little business without being very careful.”

Whatever else it may be, China’s seafood market is price-conscious, but Shetland Catch won’t quote a sale price to casual inquiries.

“We don’t give prices, or if so we give high prices and want full details on planned use and then we check with existing Japanese” customers, Pedersen explained. “They have to be able to tell us, and we have to be able to trust them.”

Even well laid groundwork and careful planning doesn’t guarantee success, as the Underwater Harvesters Association learned. The Vancouver, British Columbia, trade group for the province’s 55 licensed geoduck companies came to its first expo last year.

Early last year UHA was getting a price of $10.50 Canadian per pound for the giant clams, which are a delicacy caught, shipped and kept live until cooking in top-end restaurants.

The outfit’s customer base was Guangzhou, the ancient trading city formerly known as Canton lying on the Pearl River delta from Hong Kong and home to 200 million people. When the SARS epidemic hit and restaurants across China emptied under quarantine restrictions, the sale price dropped 30 percent, but the price plunge didn’t matter.

“We went from 80,000 pounds per week to zero,” said UHA President James Austin. During this year’s expo Shanghai’s 17 million residents appeared to be packing the restaurants as usual, but Austin said the price remains below $8 Canadian per pound.

“The reality of how fragile the whole market is hit home,” Austin said. To protect against future calamities, UHA is again seeking new markets and has begun shipping product to Paris, London and Romania.

Pacific Coast Fisheries Corp. offers another method of protection, which several New England companies are using. With offices in Isaquah, Wash., Dalian and other Chinese cities, the company provides international protection to its clients.

Atlantic Cape Fisheries of New Bedford, Mass., and Ocean Catch Inc., of Westport, Mass., use Pacific Coast as their exclusive agent and shared the $16,000 cost of their booth at this year’s expo with the Pelts and Skins Co., a Kenner, La., firm that has found a curious success since it began offering alligator meat at last year’s expo.

“It’s much more different than beef,” explained Zhang Wei, Pacific Coast’s Dalian agent, when asked how he describes the taste of gator meat to people who have never tried it. “As long as they’re new products from overseas, Chinese will like to have a try.”

All of its partners have worked with Pacific Coast for more than 10 years in their long-term marketing effort. Tariffs that average 33 percent, but can be as high as 70 percent on products such as yellow croaker that compete with China’s domestic production, will come down as the scheduled terms of China’s 2001 entry to the World Trade Organization take effect, Zhang noted.

“American people are conditioned to immediate results. I’m more interested in long-term results,” Zhang added.

In exchange for a 5 percent sales commission, Pacific Coast effectively escorts client products virtually from the west to the wok with an emphasis on quality. It sends trade agents to producers’ plants and requires quality-control reports and product photographs before shipping.

“When product arrives in China, we send our quality control people to make sure the container is like we had before shipping. Sometimes Chinese customs [officials] play games,” Zhang noted. And sometimes even such demanding conditions don’t provide total protection.

Ocean Catch Vice President David Jedrey skipped this year’s expo. Last year he had planned to offer alligator meat samples at the booth, but couldn’t get the product into the country in time for the show.

“They wanted $6,000 under the table to get through customs,” Jedrey said at the time. This year the alligator samples were again absent, but over the past year “a couple of containers” of gator meat have been sold in Guangzhou with peculiar results.

“They want the whole alligator, not so much the meat,” said Bill Ranko, Pacific Coast vice president. In the course of the dealing he also found a potential new market in Australia, which is suffering a crocodile shortage.

“We’ve got a new home for the alligator,” added Ranko, who found the abacus in use in business offices on his first visit to Shanghai in 1988.

This year’s expo was the first for Carl Berger, executive director of the western Alaska Lower Kuskokwim Economic Development Council. He passed out crab and salmon samples at the Alaska Seafood Marketing Institute, or ASMI, booth and wants his state to invest more promotional effort and money in China.

With a budget of less than $400,000, compared to Norway’s $40 million annual promotional campaign, ASMI isn’t trying to compete with the farmed salmon giant so much as ride its success to a high-quality niche market. Regardless of the species of finfish, each was another white meat to Chinese consumers until the Norwegians began introducing salmon more than a decade ago.

Salmon is still a high-priced dish, but with domestically owned freshwater farms operating near Beijing and winter net-pen operations off the Dalian coast, when the water is cold enough it’s clear that the Chinese have made it a part of their food chain.

Berger plans to try to find a ride to China for his region’s chum salmon on empty Air China cargo liners that stop to refuel at the Anchorage airport.

“Maybe we could cut a good deal with an airline and a fish buyer,” Berger suggested. “It’s not exactly a slam-dunk, but it’s something to try for.

“After all these years of repression the economy is exploding,” he said of China. “We need to be here exploring. It’s not an easy place to do business, but we need to be here. The possibilities are limitless here.”