Chinese exports to the largest tilapia market, the United States of America, are not showing much sign of picking up despite a continuing price slide, reflecting persistent weak demand at the consumer level. Meanwhile, other producers in Asia and Latin America, boosted by regional demand, continue to expand their capacity.

Although China remains the largest producer of farmed tilapia by far, harvesting roughly 1.7 million tonnes per year, its growth rate has slowed relative to other producing countries in Asia, Latin America and Africa. The Chinese share of total production is expected to decline further in 2018, with Indonesia and Egypt expected to harvest 1.25 million and 780 000 tonnes, respectively. Bangladesh, Brazil, Viet Nam, Mexico and India are set to expand their production capacity. Many of these producers are increasingly focused on domestic and regional markets, where income growth combined with less productive wild fisheries is boosting demand for cheaper farmed species such as tilapia. This diversification has served to offset the faltering demand in the United States of America to some extent, but the total value of global tilapia trade is still likely to drop in 2018.

Tilapia products can be broadly divided into two categories: cheaper, commoditized tilapia and premium tilapia. The vast majority of cheaper tilapia comes from China and is priced often more than 50 percent below the premium product, mostly fresh, which is sourced from a variety of countries in Asia and Latin America, including Indonesia, Colombia and Mexico. Premium producers and marketers are seeking to add further differentiation to their product offerings through ecolabelling, low-antibiotic production processes and convenience packaging. This strategy targets the growing middle-class, health-conscious urban demographic and seeks to create a clear distinction between this high-quality tilapia and the more typical perception of tilapia as a cheaper, generic whitefish option. Large producers see premium tilapia as a means of revitalizing the US market and realizing the great potential represented by the EU28. Demand for premium tilapia is not restricted to developed markets, with Latin American and Asian consumers increasingly ready to pay higher prices for higher quality product.

Asia

Chinese exports of farmed tilapia continued a declining trend in the first three months of the year as a steep drop in exports of frozen fillets to the US market was only partially offset by an increase in exports of frozen whole fish. In addition to subdued buyer interest in the United States of America, the appreciation of the Chinese yuan (CNY) versus the US dollar (USD) in the second quarter of 2018 has compounded price declines. Together with lower export subsidies, rising wages and the threat of tariffs in the key US market, this has created challenging conditions for Chinese exporters and processors. Emerging African markets such as the Côte d’Ivoire, Cameroon and Kenya are providing some relief in terms of alternative export destination, but relatively speaking these are still small markets.

Indonesia, generally supplying premium tilapia in the USD 6–7 per kg price range, saw exports to the United States of America rise significantly in the first quarter of 2018. Nevertheless, the Indonesia market absorbs the majority of domestic production. Taiwan Province of China has offset some loss of export volume to the United States of America in the first quarter of this year with increased exports to Saudi Arabia and recorded overall revenue growth.

United States of America

Tilapia has suffered from some bad press in recent years and US demand has been stagnating even though the seafood category is performing relatively well. China remains the number one US supplier but its share has been falling in favour of Latin American suppliers such as Colombia, Mexico and Honduras. There is a shift towards more expensive tilapia marketed as a gourmet food item available at retail but also more popular with high-end food service. The escalating ‘trade war’ between the United States of America and China is also an important consideration for the global market as a whole, as the Trump administration has indicated the possibility of imposing tariffs on an additional range of Chinese goods that may include tilapia.

Latin America

A number of Latin American countries have embarked on initiatives intended to help develop tilapia production. The Colombian government and the National Commission of Aquaculture and Fisheries (CONAPESCA) in Mexico have both invested in production and export development, with the premium segment in the United States of America by far the most important target market. Stakeholders are seeking to establish positive reputations in terms of quality, safety and sustainability in order to position themselves accordingly. Colombia, in particular, recorded good export growth in the first quarter of 2018, with Mexican volumes more stable. Tilapia imports are generally relatively low in Latin American countries, as a large proportion of domestic production in Latin America is absorbed by domestic markets. However, Mexico is the notable exception, importing a large amount of mainly Chinese-origin fish to supplement domestic production, recording imports worth USD 45 million in the first quarter of 2018, 22 percent more than during the same period in 2017.

In Brazil, strong consumer demand and ongoing investment in the tilapia farming sector is expected to translate into continuing production growth, with a further double digit increase in total production forecast for 2018 after the 13 percent growth in 2017 took total Brazilian production to 358 000 tonnes. Although the Brazilian trucker strike in mid 2018 will hamper distribution for its duration, the long-term outlook is for further expansion and a larger share of the enormous Brazilian seafood market.

European Union (Member Organization)

Demand for tilapia has been somewhat hesitant in recent times in the EU28, where tilapia marketers have struggled to make headway and major discount retailers have de-listed tilapia completely. This trend has largely continued into early 2018, with lower prices in euro terms failing to stimulate import growth. Lower priced Chinese tilapia comprises the major proportion of EU28 imports, but struggles to compete with other whitefish options. Exporters targeting the EU28 are now shifting their approach to focus on higher quality, pre-prepared product with a higher price point.

Outlook

The outlook for international tilapia trade for the remainder of the year is uncertain, dependent in large part on developments affecting the trading relationship between China and the United States of America. The imposition of tariffs on Chinese tilapia would exasperate the current difficulties faced by the Chinese industry but would strengthen the position of competing producers. The trend towards premium product marketed as high quality, sustainable and healthy can be expected to continue, but the recent certification of a number of Chinese farms under the Best Aquaculture Practices (BAP) scheme, maintained by the Global Aquaculture Alliance (GAA) shows that Chinese producers do not intend to be excluded from this segment.

Prices are expected to stay low or drop further on overall production increases this year, but weather conditions in China will play an important role. Tilapia lake virus (TiLV) remains a significant potential threat to the global industry and all stakeholders must remain vigilant and responsive to any detected outbreak or threat.