GLOBEFISH INSIGHT: 
Impact of recently enacted trade restrictions on Japanese Aquatic products

The below commentary refers to ongoing events and will continue to be updated as the situation evolves. For any specific queries readers are invited to contact GLOBEFISH directly at [email protected]

What happened?
China announced a complete ban on imports of Japanese seafood on the 30th of August 2023 with immediate effect. Hong Kong, China SAR, has banned imports of fish from 10 of Japan's prefectures.
The Russian Federation followed suit on the 16th of October with the announcement of a temporary ban on imports of Japanese seafood.

Why now?
Japan started releasing treated wastewater from the Fukushima nuclear power plant at the end of August 2023.
The International Atomic Energy Agency's comprehensive report issued on July 4 this year found Japan's plan for handling the treated water to be consistent with international safety standards and that the release as planned would have a negligible radiological impact to people and the environment.

Why does it matter for trade?
China is the largest market for Japanese seafood exports, both in terms of value and volume. In a typical year China will import close to 170 000 tonnes of Japanese seafood worth USD 1 billion. Hong Kong, China SAR, is a particularly important market, by itself representing the second most import destination for Japanese exports. There is a huge diversity in this trade, although scallops, squid, octopus, surimi and high-grade tuna represent a large proportion of the total.

While Japanese exports to the Russian Federation are relatively modest, they still amount to between USD 7.5 million and USD 25 million a year. By comparison, Japan imported close to USD 1.2 billion of Russian seafood in 2022.

What does the future hold?
The import restrictions are the most significant that the Japanese seafood industry has had to face in recent memory. The size and importance of the Chinese market to Japanese trade will mean that a significant reshuffling will be required in order to find a market for this sudden surplus.

While Japanese seafood consumption levels have been declining for the past several decades, at 46 kg per capita per year they remain significantly higher than the global average. With a sudden excess of fish that would otherwise have been destined for the Chinese market, producers, processors and retailers will be forced to adapt. This poses numerous challenges, not least due to the need to meet new market requirements and disruption to logistics and existing supply chains. Prices may be impacted by a wide variety of factors, and a large increase in fish on the domestic market would likely cause prices to fall. An initial examination of prices for fish sold at the large Toyosu wholesale market towards the end of October presents a mixed picture, with the majority of prices stable or slightly lower than previous levels.
Some proportion of exports will have to be redirected to other major markets, of which the United States, Taiwan and Thailand are the largest, but as with the domestic market the capacity of these markets to absorb such a large volume of product will be limited.

The trade links between China, the Russian Federation and Japan are amongst the most important in global seafood trade. Without Japanese supply, China will have to find alternatives to satisfy its demand for seafood. Indeed, one likely result of China's ban on Japanese seafood will be increased trade between Russia and China. Chinese imports of seafood from Russia had already increased by 50 percent to USD 2.7 billion in 2022, largely due to restrictions placed on Russia by major markets including the United States of America, Canada and the European Union. Without competition from Japanese products this figure is likely to increase further.