Step 3: Processing in China
- There are more than 7,000 processing plants in China that employ an estimated 400,000 people
- China imports about 60% of the world’s squid, a number that is likely to grow
- The U.S. exported 26,589,864 kilos of market squid in 2015 valued at $37,988,095, and much of it goes to China
- The same year, the U.S. imported 122,328 kilos of market squid valued $246,848, and much of it comes from China
Background on seafood in China
China ranks among the top seafood eating, processing, exporting, and importing countries in the world. The United States is one of its biggest suppliers of seafood, exceeded only by Russia.
Imports of frozen seafood have increased steadily over the last five years, reaching approximately $6.4 in 2015. They are expected to continue to grow by 2.5% a year over the next five years. Exports are also increasing, reaching $10.1 billion last year and are expected to grow by 3.4% a year over the next five years. The increase of seafood passing through China is due in large part to its enormous capacity for processing seafood.
The Chinese Seafood Processing Industry
There are more than 7,000 processing plants in China, primarily located in coastal regions with easy access to ships. This industry employs more than 400,000 people, many of whom are young women.
The frozen seafood processing industry totaled more than $58 billion in 2015 and, according to ACMR-IBISWorld is expected to continue to grow over the next five years. This industry is concentrated in coastal provinces and regions where access to ships is easiest.
Most companies involved in this industry “operate at the primary processing state,” which includes processes like deheading, gutting, and filleting finfish, shucking shellfish, and tubing squid. Some use secondary or integrated processing technology, but that isn’t involved in market squid processing.
Market squid processing is relatively simple, since it doesn’t involve de-boning, like salmon or other finfish. The squid is unfrozen from the 10 kilo (or similar) boxes it was packed in. Then, the head and guts are separated from the body and everything gets cleaned. It’s then cut depending on the specifications of the next buyer. In most cases, the tube is cut into the rings (that eventually get deep-fried and turned into calamari), but sometimes it’s frozen as whole steaks. The tentacles are often packaged separately and everything is refrozen before it continues its journey.
Many processing facilities in China have contracts with suppliers, which makes prices pretty stable. Del Mar Seafoods, for example, has a relationship with two processing facilities in China. They agree to send a certain amount of the product for processing and agree to buy a certain amount back.
The Next Step
China exports much of the seafood it process to Japan, the United State, and Hong Kong. A small portion of California market squid gets shipped directly back to California where it is sold as local seafood, even though it has traveled more than 12,000 miles. Learn more about that in the next post!