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3-Minute Market Insight

EP 585 | AIRED 04/18/2022

China Update: China/Russia Payment, Plants Holding Position, COVID Surge

Apr 18th, 2022 This week we provide a China update as it's been just over a month since our last pulse report on the world's largest processing powerhouse - and for this episode, we recommend you buckle-in for this rollercoaster.

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But first, as a part of our "What's Good Campaign" (which seeks to spotlight something "Good" happening in the seafood world as opposed to unfortunate news)...

Scientists at the Philippines National Fisheries Research and Development Institute have found a way to process Shrimp heads into food powder which would cut down on environmental impacts from improper disposal of these nutrient-rich heads - all while creating a new revenue stream as this wastage makes up 50 percent of the raw material, which means almost half of the money spent on whole Shrimp currently goes down the drain.

The powder can be used as shrimp flavor seasoning, seafood broths, or soups, among others.

And that’s what’s good this week in the world of seafood.


--- For the latter part of February, the only obstacles seafood producers had to deal with were waiting for processing plants to reopen, worker shortages, and higher cost of raw materials from huge demurrage charges and other freight components.

Then, as March was in our horizon, Russia invaded Ukraine on February 24th upending the industry overnight, and COVID cases started surging again in China reversing all of the progress made with their strict COVID-Zero strategy.

Fast forward to April, and this is the current conditions inside China.

Although major hubs like Shanghai try to battle surging cases of COVID-19, processing plants in Dalian have slowly been getting approved to reopen by the Government and are processing again - but not without enduring strict COVID-19 prevention measures.

We were told some of the measures implemented in Dalian were as strict as not allowing workers (including office employees) to leave the plant for the whole duration of lockdowns - often offering workers more pay to not go home.


Other measures included having cameras installed into various parts of plants with a live feed to police stations and government offices as a part of COVID-19 prevention plans.

Plants that have reopened and are running, are said to be running at about 50 percent capacity (limited by access to raw materials and worker shortages), and are not taking on any new customers.

We also caught wind that one of the larger cold storages in Yidu just reopened which means there will be some access to raw material - however we were advised most of the Pollock would have exceeded the expiry date by now, and some of the Cod have about 6-months left before expiry.

Tradex has already put our quality control inspectors on alert of this when supervising our production - and with that said, if you are not buying from Tradex, make sure your supplier can provide you with an inspection report detailing all components of a production run.


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Most Chinese plants are currently in a holding position when it comes to new season Russian raw materials as they are waiting to see what parameters the U.S. government finalizes on the ban of Russian Seafood imports, but the other big obstacle is that China and Russia still do not have a mutual payment system to facilitate currency for products since Russia was banned from SWIFT (the global interbank messaging system) on February 26th.

Latest catch reports out of Russia are showing about 800,000 metric tonnes of Pollock harvested so far this year (which is ahead of last year's pace), however there are reports their fishing efforts are slowing as Russia is said to be holding onto a lot of inventory without any major export markets to unload the product to.


Our recommendation this week is 2 parts - short term, and long term.

In the short term, continue focusing your purchasing on products that are already in North America - or products that are Caught, Processed, and Sold in North America.

For the long term, start talking to Tradex Foods about your future seafood programs for value-added asia production.

CHECK OUT OUR #WhatsGood CAMPAIGN Which Seeks To Spotlight Something “Good” Happening In The Seafood World As Opposed To Unfortunate News. #SeaTheGood #WhatsGood

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