From Hexun News, translated by Amy Zhong, for Seafood News
The tilapia market in China’s Hainan province is turning its attention to domestic sales, as reported Monday in an article by Hexun News, but the effort is hampered by poor logistics and a reduction in available farming areas in the region,
Logistical problems today include the high cost of air transport and the difficulties in keeping tilapia fresh using the land transportation, Hexun News said in another report released Wednesday.
“If the companies want to develop the domestic market better, one effective way is to further process the tilapias,” a Hainan producer told the newspaper. “In this way, it can not only solve the problem of logistics but also increase the tilapias’ added value”, said a Hainan producer. It is also important for the companies to diversify the tilapia products and invent new products so as to win the domestic market.
Another solution is to build an e-commerce platform as well as cold chain logistics.
According to the companies in Hainan, one main problem is logistics in the domestic market development of tilapia, golden pomfrets and Penaeid shrimps.
The Hainan companies usually transport their live aquatic products by air, but the packing expense is very high because the companies have to buy air freight containers from the airport which are much more expensive than the price in the regular packaging market.
And these companies have to pay a high sea freight rate if they want to transport chilled aquatic products. For example, the rate of a forty-foot equivalent unit is around 500 to 1,000 yuan higher in the Hainan port than that of Zhanjiang.
If the companies choose the land transport, their aquatic products will run into a great amount of difficulties in the sales, owing to the poor state of refrigeration technology and equipment.
The logistic problem takes a toll on the competitiveness of Hainan tilapias in the domestic market, and the Hainan aquatic product companies say that the government should take measures to help them in the development.
First, the government should advance the development of the logistic industry of aquatic products by regulating the monopoly in the logistic industry and launching funds as well as publishing relative policies to support the building of freezers and other transportation equipment.
Second, the government should improve the supply chain of Hainan aquatic products in the domestic market through assisting the well-established companies in opening their stores and building their own distribution systems in the main cities.
E-commerce is a new measure which many processing companies are taking to expand their domestic market this year. And this new measure bring benefits to both the companies and the consumers. As to the companies, they can increase their tilapia sales and establish their brands through the e-commerce. And the consumers can buy cheaper but fresher aquatic products through the platform without retailers.
However, it is still impossible to rely on the e-commerce platforms for the sales of Hainan aquatic products, said Guo Hongxing, the general secretary of Hainan Electronic Commerce Association (HECA). “The lack of a cold chain system is what influences the development of Hainan aquatic products’ e-commerce”, he added. There are only a few logistic companies in Hainan with the required refrigerated trucks, according to the research of HECA. But the situation will improve in two to three years with the efforts of different parties.
Lingao Haifeng started selling chilled golden pomfrets on line last year, but the sales turn out to be unsatisfactory because “the pomfrets were spoiled after they had been stocked in the express company for a few days before the delivery”.
The company has paid a high logistic fee when it sold golden pomfrets through the Internet last year. “The cost of transportation and packing is around two or three times of the products’ value”, said one of the managers from Lingao Haifeng.
The company requested the government to coordinate the relevant companies in the e-commerce logistic industry and provide the subsidies for the building of cold chain logistic system.
The brand establishment is of great importance in the e-commerce marketing. That’s the conclusion Li Yijun, the general manager of Nanjiang Biotechnology, has arrived at after two-year experience in selling shrimps through the Internet.
“The key point is how to convince the consumers that our shrimps are safe and environment-friendly”, said Li.
Another obstacle in the development is caused by the limited production areas, and its solution is to replace the extensive cultivation with the intensive one.
The tilapia is one main aquatic product with high output in Hainan. According to the statistics, Hainan produced 440.6 thousand tons of tilapia last year in its freshwater aquaculture and exported 104 thousand tons of these tilapia, which was around one third of the total export volume in China, the main provider of tilapia in the western markets.
Can the Hainan tilapia processing companies meet the market demands in view of output with the development of both the foreign market and the domestic one?
It is Wenchang where Zhou has grown and processed tilapias, and according to him, the production areas are diminishing there and “the reduction is around twenty to thirty thousand Mu (1 Mu≈ 666.7 square meters).”
Some of the tilapia production areas have been turned into water reservoir, while others have been used for the farming of sea eel because sea eel could bring more profits to the farmers than tilapia did a few years ago. However, the situation changes this year and tilapia become more profitable. If the tilapia profit is assumed to be 1.5 yuan/jin (3 yuan/kilo), then the farmers can earn around 8000 yuan per Mu of tilapia production areas each year, said Zhou.
Although the land resources decrease year by year with the building of Hainan as a tourist island, there are still ways to increase the tilapia output in spite of the limited aquaculture space.
Hainan is dotted with upland reservoir, and there are still large areas of deserted land and river which can be used for tilapia farming, according to the officer from Department of Ocean and Fisheries of Hainan Province. What’s more, the government encourages the farmers to shift from extensive farming to intensive through the issuance of financial support policies and assisting in the building of leading companies in the industry.
The government is also dedicated to the reformation project of standardizing the tilapia ponds, especially the one with low stock density, so that the output can multiply per unit of farming area.
Excessive capacity is also a common problem in the Hainan processing industry of aquatic products, and the operating rate is only 80% even in some large companies.
“There is no room for the enlargement of processing plants in Hainan”, said an insider.
Including marine products as materials in these plants is one solution to this excessive capacity.
The processing plants need to make changes to the categories of their products in the domestic market development, said Tan. They should not only promote whole tilapia and flaked ones but also extend their products to include such products as tilapia condiments and others made of marine products which are rich in Hainan.
Another problem is that some domestic companies expand their market by the improper means of selling at a very low price the excessively glazed seafood, especially fish and shrimps, whose ice weight is over 30% of their total weight. This practice has a bad influence on the product quality in the market and the competitive environment, so the processing companies in Hainan hope that relative standards can be published regarding the processing of aquatic products soon.
In China, there is a standard of no more than 20% ice glaze of total product weight, but this is often violated.