Sea Cucumber Prices Hit Bottom and Rebound Sharply, Aquaculture Enters a Boom Cycle

Last week, the average price of sea cucumber at the Weihai aquatic products market in Shandong was 120 yuan per kg, up 9% week-on-week and up 20% since May. Industry insiders analyze that due to restricted high-end consumption over the past 3 years and high inventories, sea cucumber prices fell sharply and have recently dropped back to a 5-year low. At present, sea cucumber prices have begun to bottom out and rebound, entering a new major upward cycle.

The historical price trend chart of sea cucumber shows that since 2004, sea cucumber has gone through two complete major cycles. From the 2004 trough to the lowest price in May 2009, the first cycle was formed. From May 2009 to April 2014, a perfectly symmetrical rise-and-fall cycle was completed. After hitting the lowest price of 104 yuan per kg in May 2009, sea cucumber prices climbed all the way, reaching a historic peak of 220 yuan per kg in November 2011, an increase of more than double. Subsequently, as sea cucumber farming technology gradually matured, “northern sea cucumbers farmed in the south” and “eastern sea cucumbers farmed in the west” and other practices drove rapid and large-scale growth in sea cucumber output. At the same time, affected by restrictions on “three public consumptions”, demand for sea cucumber fell sharply. After two and a half years of continuous decline, sea cucumber prices hit a new low of 100 yuan/kg in April this year, returning to the starting point, completing a full price cycle over 5 years.

The China Cuisine Association recently said that the national catering industry grew steadily in the first half of the year, household consumption fully offset the impact on high-end consumption, and sea cucumber demand has bottomed out and rebounded. At the same time, after 2 years of destocking and a reduction in sea cucumber production in 2013, the supply side contracted sharply, and the industry's supply-demand relationship improved markedly.

Sea cucumber prices have obvious seasonal characteristics. The lowest point of the year generally appears in March-April, meaning the phased bottom has already been confirmed. Driven by both seasonality and the starting point of a major upward cycle, sea cucumber prices have bottomed out and rebounded, and the aquaculture industry is expected to enter an upward channel.

Domestic companies mainly use cofferdam bottom-sowing farming, which is less affected by typhoons and high temperatures. In recent years, sea cucumber prices have fallen while sea cucumber sales have kept growing, achieving “trading volume for price”. As sea cucumber prices rise, leading sea cucumber farming companies are expected to return to a rapid growth track.