China lowers seafood import tariffs on popular products
Published on 02/03/2017
Importing $20 billion worth of seafood and fish products each year, China should already be exporters’ top destination. Things are looking even more enticing as a wave of import tariff reductions on popular seafood products are now in place.
Importers can enjoy varying tax reductions, dependent on product group, saving millions each year as of January 1 2017. What does this mean for exporters? Potential increased demand as lower domestic taxes signal a big increase in import volumes.
Seafood products enjoying reduced Chinese import tariffs
Countries currently not enjoying a free trade agreement, or preferential supplier status, with China are eligible to enjoy the new rates. Ten product groups will be subject to the “MFN Provisional Tariff Schedule for Imported Commodities” as China experiences supply chain snags. Included in the list are coldwater shrimp, crab, pollock and six varieties of frozen tuna.
Domestic production cannot keep up with the volumes desired by China’s ever growing population. Seafood is being eaten more and more, especially in coastal urban areas such as Shanghai, creating further gaps for foreign suppliers to fill.
Let’s take a look at each of the major product groups in a little more detail. This will give you insight into why China is experiencing supply issues of these fish varieties, and how exports could be on the rise.
• Pollock – China is by far and away the world’s biggest importers of pollock, racking up $740 million in imports in 2015 alone. Import tariffs on the fish species have been lowered from 10% to 5% as of January 2017.
While pollock and whitefish is generally processed and re-exported, domestic consumption is on the rise. Some of China’s leading fish processers say they sell 50% of their whitefish products on the domestic market.
• Tuna – Despite China’s fishing fleet reeling in thousands of tons of tuna annually, the reduction of import tariffs on six varieties of tuna is set to play right into foreign exporters’ hands. Albacore, yellowfin, bigeye, plus Atlantic, Pacific and Southern Bluefin import duties have been halved to 6%.
A spate of fresh deals and China-specific product launches is expected to benefit exporters, as both canned and frozen tuna is in hot demand amongst Chinese consumers. China imports roughly $30 million a year in frozen tuna alone.
• Coldwater shrimp – China has a voracious appetite for coldwater shrimp, in particular the pandalus family of crustaceans. Chinese imports of this species alone total over $160 million annually, and thus are set to enjoy a tariff of just 2% going forward.
Canadian producers have been spotted as having most to gain from lower import costs. The North American country exported $104 million worth of coldwater pandalus in 2015 alone.
• Frozen & unfrozen crab – Both frozen and fresh crab varieties, including golden king crab, will have their import tariffs slashed from 10% to 5% and 14% to 7% respectively going forward. Again, this is great news for exporters as China’s import levels of these products are already sky high.
Frozen crab volumes, for example, soar above the $170 million mark each year. Meanwhile, China imported a gigantic $311 million worth of fresh crab in 2015. Once again, it is the North Americans who are set to benefit most with Canada and the United States being China’s top two crab suppliers.
• Lobster & Crayfish – Both frozen and unfrozen lobster varieties have had their import tariffs dropped from 15% to 10%. Once more, China eclipses competing countries by importing nearly half a billion dollars’ worth of lobster, including rock and homarus species annually.
Despite New Zealand being the biggest individual supplier of lobsters to the Chinese market, the nation enjoys a Free Trade Agreement with China. Thus, New Zealand enjoys discounted rates and its products are not eligible for further reductions. Exporters be aware: now is your chance to exploit China’s increased desire for lobster.
If you are a supplier, be on the lookout for the opportunities China’s seafood market is constantly presenting. As mentioned earlier, lower import tariffs means lower costs for importers. Savings are likely to be passed onto Chinese consumers, leading to increased demand – music to every exporters’ ears.
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