Chinese Imports of Japanese Seafood Plunge in August After Ban; Scallop Trade Poised to Change

Published Sep 22, 2023
China's prohibition on Japanese seafood imports has already manifested as a significant downturn in August’s import figures. Among the traded commodities, scallops, in particular, stand out as a substantial product whose trade dynamics are poised to change. China is to face a short-term scallop shortage, with Russia and Peru as possible alternative sources. Some of Japan’s scallop trade volume is expected to be redirected elsewhere in Asia to be processed and re-exported to the US.

According to Chinese customs data, Chinese seafood imports (HS code 03: Fish and crustaceans, mollusks, and other aquatic invertebrates) from Japan this August totaled USD 20.8 million, representing a decline of 70% year-over-year (YoY). Total Chinese seafood imports of HS code 03, at USD 1.4 billion, dropped by a slower pace of 21% YoY.

China's Japanese seafood imports declined sharply as the country enacted an import ban for these products in late August after Japan officially started releasing treated water from the Fukushima nuclear power plant into the sea. The ban's duration is unspecified. The gradual release of water is expected to be complete after 30 years.

The bulk of Chinese imports from Japan within this HS Code correspond to mollusks (HS code 0307), of which the most imported products, by far, are scallops. In August, China imported USD 13.82 million worth of scallops, representing a decline of 68% YoY, in line with the average of the total products within HS Code 03.

Last year, the total value of Japanese scallop imports in China rose to USD 315 million. This represented 62% of total HS code 03 product imports (USD 505 million) during the same period, making Japanese scallops the most imported seafood product.

Source: Tridge and China Customs

China is expected to look for other markets to replace Japanese scallops. Other markets where it currently sources scallops include Russia (1.3% of the 2022 share), Canada (1.0% share), and the United States (0.1% of the share). The volume imported from such locations doesn’t remotely compare to that imported from Japan (97.4% of the share in 2022).

Peru and the European Union (EU) are other possible scallop sources. It’s worth noting that China also has considerable domestic production.

In the immediate term, a scallop shortage in the Chinese market is to be expected, which will exert upward pressure on prices until equilibrium is restored. However, should the lost supply not be recovered, a portion of the demand for scallops may gradually shift towards alternative substitute products.

Japan and the US to look into new mid-line processor countries for scallop

It’s also worth noting that a considerable amount of Japanese scallop imports go into processing in China and then are re-exported to other markets such as the US. In that context, it will be relatively easier for Japan and the US to look into another mid-line processor. In fact, the US has reportedly been supporting Japan in this regard, and some of these scallops that previously went to China will go to Food and Drug Administration-approved facilities in Taiwan, Vietnam, and Thailand for processing and to be re-exported to the US afterward.

Moving forward, Japanese seafood exports – at least a considerable part of the scallop trade – are expected to be redirected elsewhere in Asia, as demand in the US is expected to be unmoved. In the meantime, it’s likely that scallops in China will remain relatively scarce as the country searches for alternative sources. In a broader context, the outlook for Japanese seafood exports appears uncertain, with some other important markets like South Korea also witnessing a decline in imports. This decline is not a result of a ban but rather stems from evolving consumer preferences driven by concerns over potential adverse health implications of consuming seafood from the area. 

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