It can happen like this... China says the found a wee bit of Red Tide in some of GeoDucks, and banned imports of all USA West Coast Shellfish. Ouch!
The number is about $64 million, not $68, but the important thing is China is only 43%, not 90%. Now, Hong Kong is part of China under the one country, two systems regime, but as I understand it Hong Kong Health Department is independent of China. Therefore, my guess is so far so good on exports to Hong Kong, no problems there. Yet, if so, China's 43% market share is still a crushing loss to the USA geoduck farmers.
If you run a five year trend as I have here, you can see Hong Kong is growing much faster than China, with Hong Kong a 350% increase, and China "only" a 137% increase. Prices to both destinations, about $16 a kilo, are the same.
This is another example of food exports, USA's best export growth story right now.
Guesses as to what may be going on?
1. USA testing failed or false negative?
2. China testing failed or false positive?
3. Crushing the dealers who have cornered the market and are getting $150 a pound in China ($60/kilo)
4. USA banned something to the tune of $28 million in exports from China to USA and this is retaliation.
5. Some sort of screw up, that will be fixed in a couple of days.
One thing for sure, prices will fall drastically for at least a short while, and traders can expect the buyers to ask for a lot less than the $16 a kilo they have been paying.
NB: The HTS numbers were changed from 2011 to 2012, so I had to consult the Sch B change notices to find the old number to complete this analysis...
Feel free to forward this by email to three of your friends.
China said it decided to impose the ban after recent shipments of geoduck clams from Northwest waters were found by its own government inspectors to have high levels of arsenic and a toxin that causes paralytic shellfish poisoning.And the impact?
“It’s had an incredible impact,” said George Hill, the geoduck harvest coordinator for Puget Sound's Suquamish Tribe. “A couple thousand divers out of work right now.”But then this....
The U.S. exported $68 million worth of geoduck clams in 2012 -- most of which came from Puget Sound. Nearly 90 percent of that geoduck went to China.But look what the raw data says...
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| USITC Source Data - John Wiley Spiers Analysis |
If you run a five year trend as I have here, you can see Hong Kong is growing much faster than China, with Hong Kong a 350% increase, and China "only" a 137% increase. Prices to both destinations, about $16 a kilo, are the same.
This is another example of food exports, USA's best export growth story right now.
Guesses as to what may be going on?
1. USA testing failed or false negative?
2. China testing failed or false positive?
3. Crushing the dealers who have cornered the market and are getting $150 a pound in China ($60/kilo)
4. USA banned something to the tune of $28 million in exports from China to USA and this is retaliation.
5. Some sort of screw up, that will be fixed in a couple of days.
One thing for sure, prices will fall drastically for at least a short while, and traders can expect the buyers to ask for a lot less than the $16 a kilo they have been paying.
NB: The HTS numbers were changed from 2011 to 2012, so I had to consult the Sch B change notices to find the old number to complete this analysis...
Feel free to forward this by email to three of your friends.
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