Chinese Abalone Farmers Suffer Huge Losses

December 10, 2019 Updated: December 10, 2019
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In China, abalone is served at fancy banquets and sold at high prices in retail markets. But the situation has changed as abalone prices have dropped significantly since last year due to a slowing economy, overproduction and pollution.

Chinese abalone farmers could not even recover their costs this year. The retail prices of abalone dropped nearly 30 percent from last year, and now the price for one abalone is only about 3 yuan ($0.43), China’s Central TV (CCTV) reported on Nov. 28. In terms of per unit price, it is similar to that of Chinese cabbage.

CCTV attributed the price drop to climate change, overproduction and shrinking exports.

Overproduction, Pollution and Falling Exports

Lianjiang County, in the coastal province of Fujian, is known as the “hometown of abalones.” Mr. Chen, an abalone farmer in Lianjiang, noticed a big drop in both sales volume and prices of abalone in June.

“Prices in June were between 33 to 37 yuan ($4.70 to $5.30) a pound, while last year they were between 62 to 65 yuan ($8.80 to $9.20). That was a nearly 50 percent drop,” Chen told the Chinese-language Epoch Times on Dec. 3. “There was a little improvement last month, as prices were up to 43 to 47 yuan ($6.10 to $6.70),” he added.

Chen said he believed the main reason of slowing sales is overproduction. The overall production in Fujian Province is several times higher than in previous years, he said. “As for myself, my farm produced 5,000 cages last year, and each cage has 35 abalones. Our harvest this year was close to 10,000 cages.”

In addition, Chen revealed that water pollution forced local farmers to sell abalones before the peak season, and they all lowered the price in order to sell quickly.

He explained that in the summer, water pollution combined with high temperatures, caused the death rate of abalones to rise sharply.

“Water pollution is rather serious this year. In my farm, in each cage, only about 25 abalones survived after a period of high temperature,” Chen said.

Another reason, according to Chen, is the U.S.-China trade war. In 2018, he was able to sell a huge portion through export as early as May. But this year, the export sales channel is gone, he said.

“It’s now the end of the year. I still have a lot of unsold abalones, and most of the batches I sold in previous months were sold at lower prices. Overall I am suffering a big loss this year,” he said.

Chen also revealed that almost all of the 50 households in his village were affected by the price drop. Some households lost nearly 800,000 yuan ($113,600) and will have difficulty repaying the loans they obtained from a local government bank at a 4.7 percent interest rate, he said.

Overproduction Encouraged by Local Officials

Overproduction of abalone has become a problem in recent years because local governments have encouraged many residents to engage in abalone farming, according to Li Lianpao, a former representative of the People’s Congress of Shishi City, Fujian Province, who spoke with the Chinese-language Epoch Times.

“In China, government officials all want to launch a big image project to boost their political achievement by encouraging the so-called ‘10,000 acre industrial park’ project or the ‘10,000 acre aquaculture’ project. If almost every fish farmer in the area engages in abalone farming, it will certainly lead to an overproduction problem,” Li said.

Economic Slowdown

Chinese agricultural researcher Mr. Yan told The Epoch Times in a Dec. 5 interview that the impact of the economic slowdown is the main reason for the abalone price drop in China.

“China is currently in an economic depression, and consumer spending is declining. As a high-end commodity, abalone certainly cannot sell well,” he said.

Chinese economist He Junzheng, a dissident who was one of the student leaders in the pro-democracy movement in Hunan Province in 1989, agrees with Yan’s analysis.

“Many commodities [sellers] in China are cutting prices this year, including daily necessities,” He said. “If you look at the price drops on Taobao [China’s equivalent of Amazon], many products are selling at 50 percent discount compared to previous prices. This is because China’s economic growth is suddenly coming to a halt. These sellers need to liquidate their assets to make preparations for the next year.”

Tainted Food

Yan also pointed out that exports of aquaculture products have already experienced a drop several years ago.

“Many countries have stopped importing agricultural products from China, because they are aware that environmental pollution and malpractice in farming lead to serious food safety problems. For example, South Korea once hosted an international food expo. We got the feedback that no one visited China’s booths at the expo, as they are all aware of the tainted food problem in China. The customs in other countries and their international trade inspection agencies all know that China is a terrible country to import food from. They just try to avoid working with China.”

Li Lianpao, the former representative of the People’s Congress, made critical remarks about China’s overfishing problem and controversial practices used in fish farming industries to boost production.

“Nowadays people crave quick profits and disregard basic rules. For instance, overfishing along the coastline—even juvenile fish are not spared—has exhausted fishing resource in the oceans. In terms of fish farming, in the past, it was very difficult to breed abalone. In recent years, there have been a number of breakthroughs that have made abalone farming very easy and productive. However, these breakthroughs involve the use of large doses of drugs and growth hormones. The whole industry simply ignores the serious harmful effects of drugs and hormones, as well as water pollution. It is the same situation in the aquaculture of sea cucumber, seaweed, kelp and grouper,” Li told The Epoch Times.