Control of the Chinese tilapia sector is in the hands of middlemen or resellers, a result of and reason for the cyclical price slumps that plague the industry.
These middlemen typically supply feed and seed to the myriad of small-scale tilapia producers in regions like Hainan, while also buying fish for sale to factories.
“The farmers usually get credit from the resellers but when prices are very low they end up in debt to the reseller. Processing factories don’t like to deal with the farmers because they are so scattered,” Zhou Xu, general manager of Hainan Chang Sheng Yu Bie, a major feed supplier in the island province, explained to IntraFish.
The farmer-reseller-factory relationship is central to tilapia production, and the interdependent nature will take time to unwind.
As it stands, farmers indebted to middlemen tend to produce ever-larger volumes of fish to repay credit. This perpetuates the fragmented nature of the industry and creates long-term challenges to the consistency and quality of tilapia output.
The vicious circle of falling farm-gate prices for tilapia in China’s key producing regions this year appears to have caused a shortage of quality fish for fillet processors and exporters.
Major tilapia processing companies claim they’re not able to get sufficient quantities of suitable fish largely because farmers are no longer feeding their fish due to pessimism over low prices. Several key processors in southern China claim they’re expecting a rebound in raw material prices which could curtail factory output and tighten supply.
