There have been multiple reports documenting the impacts of the COVID-19 virus on the seafood trade. Some of the industries affected include the Pacific white shrimp market and the market for fin-fish. As a result, the price for white shrimp has dropped significantly due to the lack of off-takers for the product. Some producers in India have reported prices of 5 USD/kg for 40 count shrimps. Nevertheless, in this article, we will be covering the impact of COVID-19 on the crab industry.
From our understanding of the market, the ideal marketable size for the Chinese consumers market is about 200-300 gram size. We have also seen a higher price fluctuation for the product in this category range. Vietnamese producers with fully integrated production lines (hatcheries, nursery, and grow-out pond) seem to face the highest risk for impact. Given the Vietnamese production dabbles in the production of Scylla paramamosain in the ranges of 200-300 gram. Much of the crabs produced in Vietnam are exported to China as a result of the high consumer price. Nevertheless, unlike the Pacific white shrimp, mud crabs cannot be cultured at high density due to its cannibalistic nature. This has a profound impact on the cash flow for small and medium enterprises as it dampens the potential losses for small businesses. Furthermore, the low stocking density of crabs also means that the crabs would reply to the natural productivity of the ponds and would not require as much feed. Although undesirable, the impact of COVID-19 is not as great as those farmers in the shrimp industry. Furthermore, crabs from Vietnam can be consumed domestically and exported to neighboring countries like Cambodia or Thailand (although they are also dependent on the tourism revenues).
Fisheries are also impacted by the COVID-19, and one of the most notable producers for fisheries is Indonesia. In 2019, the prices of 200-300 gram sizes have skyrocketed especially during the Chinese festive seasons. As a result, most of the Indonesian exporters have reserved this category of crab for China. Leaving the bigger size 400-700 grams for Malaysia, Singapore, and Taiwan. This is an ideal case for Indonesia as most of their catch will be in the smaller range as supposed to the bigger crabs. However, with the outbreak COVID-19, the Indonesian exporters have found themselves with excessive amounts of 200-300 grams sized crabs. It might be useful at this point to clarify that most exporters have to purchase all sizes available from the fisherman to prevent other exporters from poaching their suppliers. As Malaysia and Singapore are not as badly affected as China, the demand for 500-700 grams persisted. As a result, much of the 200-300 gram sizes are not being sold resulting in high mortality on the exporter size. As a result to reduce the backlog of these smaller size crabs, the exporters have to impose conditions for importers to buy a certain quantity of 200-300 gram sizes crabs for every 500-600 gram size crab order.
However, the lack of Chinese consumer demand has also generated some winners in the crab industry. One of the potential winners are traders and restaurants specializing in 200-300 gram sizes. This is typically smaller seafood specialty sources located in food courts. Given the low prices of the 200-300 gram size, they will have more margin to operate and also leverage on the excess goods on the suppliers' inventory. While prices in the 500-700 gram range did not drop throughout the festive season, we do see a general slowdown in the consumption due to the fears of an economic slowdown in the region.
While it remains unclear how the COVID-19 will continue to impact the economy, it is clear that it will impact tourism. For businesses that rely on servicing restaurants that cater to tourists, they are likely to be affected.