Market analysis of aquatic products: the gap between supply and demand will exceed 20%. Is it possible for prices to rise in the future?

Recently, the State Council issued the "National Agricultural Modernization Plan (2016-2020)" (hereinafter referred to as "Agricultural Modernization Plan"), which put forward an overall plan for the key points and objectives of promoting agricultural modernization in the next five years. It can be said to be a weather vane for the next stage of agricultural supply-side reform and sustainable development.

In the Agricultural Modernization Program, the production target of aquatic products, like corn, cotton and sugar crops, is set to be reduced from 66.99 million tons to 66 million tons. Is the reduction in fish production due to the fact that the current supply has been able to meet demand? If not, why should our country reduce the output of aquatic products? How to fill the gap between supply and demand?

There is great potential for the growth of aquatic demand.

According to the relevant research by the "medium-and long-term growth" research group of the Development Research Center of the State Council, by 2023, China's demand for aquatic products will reach 85.23 million tons, an increase of 35 percent over 2013. Compared with the 66 million tons of aquatic products output target in the Agricultural Modernization Plan, there is a gap of up to 19.23 million tons, which means that 22.3% of the demand cannot be met.

According to the existing research, the demand growth of aquatic products is affected by many factors, such as macro-economy, the level of urbanization, the degree of aging and so on.

From the perspective of income, the per capita consumption of aquatic products in Japan and South Korea increased by 25.4% and 26.6% respectively in the same period as China's per capita GDP from 2010 to 2020, which is roughly equivalent to the increase in demand for aquatic products in China as estimated by the National Research Center.

From the urban dimension, compared with urban residents, the current demand for aquatic products of rural residents is less, but the growth potential is huge.

According to the relevant calculations of the Institute of Food and Nutrition Development of the Ministry of Agriculture, at present, the per capita demand for aquatic products of urban residents is 15.8 kg, while that of rural residents is 8.8 kg. The meat needs of both urban and rural residents meet the recommended standards, but in terms of aquatic products, the consumption of rural residents is only half of the recommended amount.

Rural residents' demand for aquatic products is small, which is not only affected by consumption habits, but also affected by the level of income to a greater extent. the data show that the consumption of aquatic products of high-income farmers is about the same as that of urban residents. The result of empirical analysis also shows that the income factor has a significant effect on the aquatic product consumption of rural residents. for every 1% increase in household income, aquatic product consumption increases by 0.356%.

In addition, unlike the demand for meat, the deepening of aging will have a positive impact on the demand for aquatic products. This is because aquatic products are easy to absorb and digest and are more suitable for the elderly than meat. Generally speaking, the consumer demand for aquatic products will increase with the aging of the population.

Considering the factors such as China's economic growth, the income growth of urban and rural residents and the deepening of aging, the national demand for aquatic products will continue to increase in the future. So, why does the "Agricultural Modernization Plan" want to adjust and reduce the output index of aquatic products? Which part of the production capacity is mainly reduced?

"there are no fish in the East China Sea", it is a foregone conclusion to reduce production capacity.

Worries about environmental pollution, ecological damage and structural overcapacity are the main motivation for the Agricultural Modernization Plan to reduce the production targets of aquatic products.

Liu Xinzhong, deputy director of the Fisheries and Fisheries Administration of the Ministry of Agriculture, said at the 2016 International Conference on Sustainable Development of Aquatic products: "at present, the global fishery is facing the problems of environmental pollution and overfishing, and the whole world is seeking the sustainable development of fisheries. China's output, consumption and export of aquatic products rank first in the world, and the difficulties and problems it faces also rank first in the world. At present, China's fishery is facing the problem of surplus productive forces, and there is an urgent need to change the mode and structure to achieve sustainable development. "

In 1980, in the fishery production structure of our country, the fishing output was much larger than the aquaculture production, accounting for 70% of the total production. By 2013, that proportion had shrunk to 30%. On the one hand, it shows that China's aquaculture industry is developing rapidly, on the other hand, it also indicates the increasing shortage of offshore capture fishery resources in China.

In March 2016, Minister of Agriculture Han Changbin pointed out at the National Fisheries and Fisheries work Conference that due to environmental pollution and overfishing, offshore fish spawning grounds were seriously damaged and marine fishery resources continued to decline. there has been a phenomenon of desertification in the waters where "there is no fish in the East China Sea", so China will "resolutely reduce fishing capacity".

In addition to reducing fishing capacity, the structural adjustment of aquaculture capacity has also been put on the agenda.

The Agricultural Modernization Plan points out that it is necessary to "optimize the layout of aquaculture, scientifically delimit aquaculture areas, and clearly define restricted and prohibited farming areas." Among them, it is necessary to adjust and optimize freshwater aquaculture and scientifically distribute mariculture; especially for mariculture, it is necessary to "stabilize the scale of offshore aquaculture, reduce overdense cage aquaculture, and expand the space of offshore aquaculture." It can be seen that the main efforts to reduce the production of aquaculture are put on the cage culture which is too dense offshore.

Who will feed China?

Although there are good reasons for reducing production capacity, how can the gap between supply and demand in front of the market be filled? In the future, will the prices of aquatic products rise sharply due to the relative scarcity?

China is the largest producer of aquatic products in the world, and its output has ranked first in the world for 23 consecutive years, accounting for more than 60% of the world's total output. If domestic supply cannot meet demand, can imports fill the gap?

At present, the global wild fish resources are declining rapidly. The State of World Fisheries and Aquaculture 2016 released by FAO points out: "according to the global fishing trend of fishery resources from 1974 to 2013, the level of sustainable fishery resources has shown a significant downward trend, from 90% in 1974 to 68.6% in 2013. As of 2013, 31.4% of the world's wild fish stocks are unsustainable overfishing, and this percentage is expected to increase in the future. "

At present, the proportion of fishing / aquaculture in the world is about 50%, which is slightly higher than that in China. The international fishing industry generally believes that the development of aquaculture is the feasible direction to promote the sustainable development of fisheries. Lester R. Brown, an American ecological economist, once said that aquaculture is a way to reduce grain in exchange for animal protein and is a major contribution of China to world food security.