CHINA - Harsh weather is shaking up tilapia farms in Southern China as they experience the most severe rainstorm season since 1998, report Rob Reierson and Kyla Ganton in the Tradex Foods 3-Minute Market Insight.
Heavy rain and typhoons are an annual disruption to the aquaculture fishery, especially in the late summer and fall when supply typically becomes stagnant.
Last year's imports of Frozen Tilapia fillets to the USA remained around 26 million pounds per month during the rainy season.
This year however, supply will be short and prices are already strengthening as a result.
We spoke with Chris Liu, our director of Asia Operations in Qingdao about the effects that tight supply will have on price.
Chris: "Well Tilapia pricing has been going up since 2 months ago, and I was told by suppliers that pricing is going to go up again next week. So prices are going to go up by 20 cents next week, that's 5 percent."
Last week's spot pricing in New Jersey on 5-7oz CO treated IQF fillets were $1.95 / lb and $2.03 / lb for IVP. In the round, 550-750gram Gutted and Scaled Tilapia is $1.22 / lb also in New Jersey.
As Chris said though, expect these prices to jump between 5 and 10 percent in the weeks to come.
Despite tighter supply, Chris also noted that many Chinese suppliers blame poor market conditions for decreased overseas demand.
Chris: "When I was talking to the supplier's, demand from North America is still weak even when the supply is short, I just don't understand. If I wanted them to ship a container in 4 weeks I don’t even have to ask them."
Our advice to buyers in preparation for a Tilapia price increase would be to secure inventories now, during turbulent raw material shortages.