China Power Cut Effect on Seafood Industry! GOOD or BAD?

The double control policy – Power cut policy- a watershed for China’s fishery exporting industry seafood.

In August 2021, the China government issued the double control policy- power cut – Barometer of 2021 Half-Year Regional Energy Consumption Intensity & Total Amount. According to China’s Paris Agreement pledge, the aim is to move toward the carbon neutrality target and improve industries’ structure and renewable energy utilization. How will this double control policy proceed, and how power cut will affect the China seafood industry? Ocean Treasure will bring you a whole scope of this policy. And also the market analysis of the power cut influence on the China seafood export market.

Production less, the unit price is higher and will gradually show on the final price

Unfortunately, these widespread fish farming, catching, and processing provinces like Guangdong, Fujian, Shandong, Zhejiang, and Guangxi Province are at the first-level alert. Under the strict double control policy, many factories must close one or two days a week. With this temporary suspension of operation, they face shortages of production.

Since most of the factories have backup power, the storage will not be affected. But for sure, the pace of each order will be slow. It means the final unit price of a product will be higher. And this trend will gradually show on the final offer price.  

The price in the Agri-Chem industry is increasing due to the low production under double control

Under the influence of the pandemic and the double control of national energy consumption, the production capacity of many chemical companies has been affected, and the market’s products are clearly in short supply. Raw materials related to the marine animal protection industry include doxycycline, florfenicol, enrofloxacin, compound iodine, povidone-iodine, glutaraldehyde benzalkonium bromide, and other raw materials, are affected by upstream chemical raw materials.

The cost of chemical products this year has hit historical records. The limited, short-term supply side is difficult to make up. So the price of the chemical raw material sector has generally risen. And even the phenomenon of “no spot,” “no price guarantee,” or “no quotation” on the supply chain has long been the norm.

At first, the company has to digest part of the price to have the company run. If it is not affordable anymore, its chemical inputs and other products will increase the price or reduce supply. And this price pressure will go to farmers and finally transit to the fish raw material price. Many companies have sent the signal that they will increase the price at the beginning of 2022. (Double control china seafood)

What effect from power cut will China fish exporting market have?

For China’s fish exporting market, the offer might have a significant change after the national holiday, especially for Tilapia, APO, Salmon, squid. These products usually need a very complex processing scheme and will require more power cost. For tilapia whole round, mackerel, like these quickly processed products, the effect might be a little. But still, less production will affect the order capacity of a factory. So, Ocean Treasure suggests that we should order as quickly as possible.

Factories still have stocks for some orders, but the price is under market call once they seek new raw materials. The price up is from the farming side, the production side, and the freight side. We better act fast. We suggest you have to re-access your stock and your sale in the coming 2 or 3 seasons and give orders in one or two months in advance. So we can arrange production in advance to ensure that your order can deliver on time.

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