US trade battle creates Chinese opportunity for Jamaican seafood

Max Jardim

(Jamaica Observer) Chinese seafood merchants have already begun buying lobster and fish from other countries as tariffs make American seafood too expensive, according to a recent article out of Beijing, China.

President of the United States Donald Trump last week imposed a 25 per cent tariff on US$34 billion worth of Chinese imports for the country’s “dirty trade tactics”. The Trump Administration has claimed that China forces foreign companies to spill American technology secrets in order to do business with China.

China immediately retaliated by imposing its own tariffs of the same weight.

The ongoing trade dispute with China is expected to escalate, with Trump threatening to add tariffs to US$200 billion worth of Chinese goods. The proposed 10 per cent tariff would hit a number of Chinese products, including fish, vegetables, coal and handbags, but is subject to a public hearing from August 20 to August 23.

Media visits to Beijing’s largest wholesale seafood market found scant American fish or crustaceans for sale. Seafood distributors argue that the recent 25 per cent tariff has made American lobster unaffordable, forcing merchants to buy lobster and fish from other countries.

Rainforest Seafoods business development manager, Max Jardim reckons that Jamaica could capitalise on the ongoing trade war between US and China, noting that while it is very early days the tariffs implemented are prohibitive.

“Other lobster-producing countries will stand to benefit, including Jamaica, if we can capitalise. Our challenge in Jamaica is that the current regulations do not facilitate the export of live lobster,” Jardim told the Jamaica Observer.

In 2015 Rainforest announced plans to export live Jamaican lobsters to Asian markets including China, Japan and South Korea, but to date has not been able to capitalise on the initiative that is expected to threefold increase product demand.

“The regulations were crafted before the live lobster phenomenon/Chinese demand for live came into play — prohibitive regulations such as requiring a licensed freezer vessel to offload lobster for export, when the best-quality live lobster is produced by our smaller, artisanal, day-boat fishermen who do not have the financial capacity to own and maintain large freezer vessels,” Jardim reasoned.

Rainforest has been incrementally expanding its product line over the years, as well as constructed a $100-million lobster facility at its plant in Montego Bay to accommodate the 250,000 pounds of lobster it plans to export.

Up to last August, the company still awaited bilateral discussions between the Government of Jamaica and the Government of China to gain access to the market, following shipments of live lobster to Hong Kong from Sangster’s International Airport in 2016.

Rainforest reported an increase of 40 per cent in exports from January to July 2017, comparable to the same period in 2016. The company is, however, bullish on getting a toehold into mainland China, which is 192 times the size of Hong Kong’s population.

“In order to tap into this opportunity a solution will have to be crafted to include these artisanal fishers in the supply chain, to allow them to deliver live lobsters directly to approved live lobster-exporting facilities. The Government is aware and we are working closely with regulators to craft the most appropriate change in regulations to include our Jamaican fisherman.

“In fact, our Jamaican fishermen stand to earn two to three times more by selling their product as live production rather than dead or frozen,” Jardim told the Sunday Finance.

Its not yet clear from where Chinese importers are now sourcing lobster and fish. One report has suggested that merchants are now considering to import more lobster from Canada.