WWW.WAS.ORG • WORLD AQUACULTURE • DECEMBER 2015 31 processing plants for tilapia must have strict traceability through production and processing. So, as long as the tilapias are exported to international markets, the quality will not be poorer than that from other countries. Thus, low price cannot be attributed to low product quality. Low costs of production The researchers who support the view of low production costs think that the water resources of China are rich and abundant and that labor and feed are cheap because of price caps. Thus, Chinese producers can sell tilapia at a low price because production costs are low. However, in recent years, the prices of almost all inputs have been increasing. From 2002 to 2012, the prices of land, feed and labor have increased a lot (Fig. 7). The cumulative growth rates of costs are more than 100 percent, which are now very close to that of the price of tilapia. This phenomenon shows that prices of Chinese tilapia are indeed costoriented. The effects driven by brands, processing and technology are very poor. Unreasonable production mix The researchers who explain low price by an unreasonable production mix think that too much of the export volume consists of primary tilapia products rather than highly-processed, valueadded products. They point out that this is the key point of the low profit of the Chinese tilapia industry. Tilapia exported from China are mainly sold as frozen fillets, which account for more than 60 percent of the total export volume and 30 percent consist of frozen tilapia (Fig. 8). Highly recent years. From 2012 to 2013, the export volume continued to rise but the value dropped a lot. The profit from tilapia farming in mainland China is decreasing fast. Low price leads to profit loss and is bound to lead to industry contraction. Therefore, our research question is why are tilapias from China the cheapest? What can be done in the future to change the situation? Reasons for the Low Price of Tilapia Many researchers have launched lots of discussions about the reasons for the low price of Chinese tilapia. The mainstream view attributes it to low product quality, low costs of production, unreasonable production mix and no brand, among others. This article tries to analyze whether these reasons are reasonable based on the reality and the statistical data of tilapia industry in China. Beyond that, we also try to explore the deeper reasons for the phenomenon. Low product quality In recent years, food safety incidents have occurred frequently in China. Thus, some people think that the low price of tilapia exported from China can be blamed on the perception of low product quality because, in the mind of tilapia buyers, tilapia culture practices and the processing and food safety control technologies of China are not very advanced. The reality is that, driven by international markets, product quality testing mechanisms for exported tilapia are very mature. In addition to the necessary inspection and quarantine required for export, (CONTINUED ON PAGE 32) FIGURE 3. Main tilapia production areas in mainland China. FIGURE 4. Comparison of the price of frozen tilapia fillets from the top five exporters from January 2012 to August 2014. FIGURE 5. The quantity of tilapia exported from mainland China from 2008 to 2013. FIGURE 6. The value of tilapia exported from mainland China from 2008 to 2013.
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