Cod orders doubled, delivery period extended to more than six months, Chinese processing industry may enter consolidation period

Cod orders doubled, delivery period extended to more than six months, Chinese processing industry may enter consolidation period!For more information on export to China, please call SINOLOBEN, service Email: sinoloben@sloben.comsn 90% sold to China.

After the war in Ukraine, Europe and the US announced sanctions against Russian seafood one after another, and a large number of cod orders flowed to China. According to industry sources, the orders in the queue of Chinese factories are more than twice as many as before the epidemic, and orders originally delivered in three or four months were even extended to more than six months.

 
At the "North Atlantic Seafood Forum" in Norway, Frank Bodin, finance director of the U.S. importer Nordic Group USA, mentioned: "We are purchasing Norwegian real cod H&G (head and gutted) raw material, which is not expected to start selling until early next year. "
 
"China's vaccination policies, shipping restrictions, and congestion at U.S. ports have created too many barriers to the import of processed U.S. real cod and haddock. Compared to before the epidemic, orders lined up in Chinese factories have now doubled. In the past, the lead time for the U.S. market to receive the product was about 3-4 months if you counted from the point of export of raw materials from Norway or Russia, and now, the wait is more than 6 months." Bodin said.
 
"As a result, we see a decline in U.S. imports of frozen real cod from China in 2021, a trend that continues into the first quarter of 2022. Some of these vacancies are offset by direct sales from Iceland, Norway and Russia, however, Icelandic and Norwegian real cod goes primarily into the restaurant industry and Chinese processed secondary frozen products go primarily into the restaurant industry." Bodin said.
 
"As of June 1, the U.S. will ban Russian seafood from entering the country, and the already tight supply situation is expected to be magnified again." Bodin said.
 
Mr. Zhang Jianrong, chairman of Ocean Gala, said the situation in China against the epidemic is expected to accelerate the wave of consolidation in the whitefish processing industry. The number of processing plants in China will shrink by 20-30% in the next five years.
 
Zhang Jianrong said that the Zhuanghe area in Dalian, once the center of China's fish processing industry, used to have about 100 processing plants, but now the number has been reduced to 85, while only 43 have officially resumed production since the outbreak in Dalian last November.
 
There is a big demand gap in the global cod market and Dalian factories have received many overseas orders, but the future of the processors is still full of uncertainty. "This industry is currently unsustainable, we may still make some money this year, but we don't know what will happen next year. The supply of raw material for H&G pollock in Russia is getting smaller and smaller, and companies are getting more cash-strapped."
 
"Financing for processors is becoming more difficult and banks are very cautious because margins are very thin. Russian suppliers are also demanding cash payments, so the level of purchasing power of Chinese companies has decreased." Zhang Jianrong said. In addition, Russian raw material exports are declining year by year, and there are numerous reports indicating that Russian companies are focusing on their home markets to maintain their business.

Consulting service for China's imports & exports, please contact us.

Ms. Linda Li
0086（0）21 3538 3306
sinoloben@thecustoms.com.cn

As food importer & food distributor based in Frankfurt and Shanghai, Sinoloben Europa Trading GmbH helps client export to China and bring your food products to International Expo, e.g. China International Import Ex