Abalone Production in Laoshan Plummets: Why Have Abalone Prices Soared?
After the sluggish abalone market of 2013, many aquaculture companies exited the industry due to losses, while others scaled back their farming operations, reducing the total volume of abalone farming and thereby changing the supply-demand relationship.
On December 16, after the last truckload of commercial abalone was shipped out from the base in Changhai County, Liaoning Province, Zhao Yanbo seemed somewhat reluctant to see it go. "This year, abalone prices have been considerable and sales have been brisk. With more than 10 days still to go before New Year's Day, our company's live abalone had already sold out. If only we had more live abalone, how wonderful that would be..." As the board secretary of an ecological seedling industry company in Dalian, Zhao Yanbo naturally hoped the company's performance would reach yet another level.
"I've been in the abalone business for over 20 years, and this year's abalone prices are the highest ever, especially in late May of this year when abalone prices hit a record high." Wang Rong, general manager of an abalone wholesale company in Dalian, said that based on preliminary estimates, abalone prices are unlikely to see much room for decline over the next year or so.
A Rare "Scramble for Goods" Market
"In my more than 20 years in this industry, abalone has been the most expensive this year. Currently, 6-head Dalian abalone wholesale at 125 yuan per jin, with a retail price of about 130 yuan; 10-head abalone wholesale at about 90 yuan, with a retail price of 95 yuan to 100 yuan. In the same period last year, 6-head Dalian abalone wholesale at 90 yuan, with a retail price of about 100 yuan; 10-head abalone wholesale at 75 yuan, with a retail price of about 85 yuan." Wang Rong said that by rough estimate, current abalone prices have risen about 30% year-on-year.
In fact, now is not even the peak of this year's abalone prices. "In late May of this year, abalone reached the 'highest price in history.' At that time, 6-head abalone wholesale at 225 yuan per jin, with the retail price soaring to 240 yuan per jin; 10-head small abalone wholesale at as high as 140 yuan per jin." Wang Rong said that at that time, abalone was truly a "noble ingredient."
Abalone prices have soared, yet sales remain brisk. "Now, the company's live abalone has already sold out. Fortunately, we also make some deep-processed abalone products, which will become hot sellers before the Spring Festival." Zhao Yanbo said that for many abalone farming companies, "not enough goods to sell" is currently a "happy problem."
"Currently, our company's commercial abalone has also sold out." Shi Minjun, general manager of a seafood company in Dalian, said that although abalone prices are high this year, there is no worry about selling them at all. Some wholesalers, afraid of not being able to secure supply, even go directly to the islands to pick up goods.
According to industry insiders, from 2013 to 2014, abalone prices fell to rock bottom, forming a stark contrast with this year's market. "At that time, 6-head abalone wholesale at only 40 yuan per jin, and 10-head abalone at about 30 yuan per jin." Shi Minjun said with emotion that, taking 10-head small abalone as an example, a single abalone sold for only 3 yuan.
"If you compare the market in late May of this year with that of 2013 to 2014, then abalone prices have soared 4 to 5 times." Wang Rong said that behind the price curve leaping from trough to peak lie the joys and sorrows of many abalone farming companies and distributors.
Gift Channel Declining, So Why Have Prices Soared?
Two or three years ago, abalone was once found in the mass seafood market. Why have prices soared this year? "After the sluggish abalone market of 2013, many aquaculture companies exited due to losses, while others scaled back their farming operations, which reduced the total volume of abalone farming and thereby changed the supply-demand relationship." Zhao Yanbo said. In addition, over the past year or two, although the high-end gift channel has gradually declined, mass consumption has risen, creating relatively strong demand for abalone.
"Now, many aquaculture companies in Dalian, Liaoning, Shandong, Fujian and other places use the 'north-south swap' method to farm abalone. Typically, from mid-May to early December each year, abalone are farmed in Dalian, Liaoning, Shandong and other places, and from early December to early May of the following year, they are farmed in Fujian and other southern regions. This 'north-south swap' farming method allows abalone to escape the severe cold of the north and the extreme heat of the south, thereby increasing the survival rate of farmed abalone. Especially during the farming period in Dalian, the quality and taste of the abalone are also greatly improved." Shi Minjun explained that using this farming method, growing abalone from seedlings about 2.8 cm in diameter to finished abalone typically takes 18 to 24 months. For commercial abalone grown in 18 months, the farming cost for the 10-head size is 40 to 45 yuan per jin, and falling below this cost line means losing money. From 2013 to 2014, the vast majority of abalone farmers were operating at a loss, which greatly reduced the total volume of abalone farming afterward, ultimately leading to this year's situation of abalone supply falling short of demand and prices soaring.
"After March 2015, abalone prices gradually picked up, followed by a period of moderate increases. But since the beginning of this year, the abalone market, with its unbalanced supply-demand scale, finally tipped prices upward, causing abalone, which had once 'fallen to the mortal world,' to soar in value and return to the ranks of noble ingredients." Wang Rong said that currently, 6-head to 10-head medium and small-sized abalone are in greatest demand and are also the most scarce.
"Based on the analysis of the 18-to-24-month grow-out cycle for abalone, it is expected that before 2018, abalone prices are unlikely to have much room for decline." Shi Minjun said that in November this year, the company invested 4 million yuan to release 4 million abalone seedlings. These seedlings will go through 1.5 to 2 rounds of "north-south swap" between the company's base in Ningde, Fujian and its base in Changhai County, Liaoning, and are expected to be ready for sale around May 2018.
In addition, according to a senior industry insider, at present, domestic abalone farming is mainly concentrated in Fujian, accounting for more than 80% of production. There are about 30-plus companies and individual operators engaged in abalone farming in the Dalian area, and their farming bases in the north are mainly concentrated in Changhai County, Liaoning, Lushun, Jinshitan and Rongcheng, Shandong, among other places.
South Korean Abalone "Sneaks In"