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Beijing just months ago partially eased restrictions on Japanese seafood. However, the potential renewal on the ban could deal a sharp blow to companies hoping to regain access to a market that once accounted for more than 20% of Japan’s seafood exports.
On the flip side, a potential rise in Chinese demand could offer a lifeline to Indian seafood exporters squeezed by steep tariffs imposed by the United States, the country’s biggest market, with clients including major retailers such as Walmart and Kroger.
Total seafood exports from India globally stood at $7.4 billion last year, with shrimp accounting for 40%.
With the tariff issue weighing on shipments, companies have been looking to diversify their export markets, said Vincent K Andrews, equity research analyst at Geojit Financial Services. Any new opportunity is positive news for the sector, he added.
Shares of Avanti Feeds closed up about 10%, its biggest intraday gain in more than two months. Coastal Corporation climbed 5%. The company had announced plans in April to boost exports to China and others as part of a strategy to reduce reliance on the U.S. market.
At the end of August, the U.S. administration under President Donald Trump had imposed tariffs of up to 50% on Indian shipments.
That led to a nearly 9% year-on-year fall in exports to the U.S. in October, according to data from the Commerce Ministry.
Last week, India’s cabinet approved a spending package of 450.6 billion rupees to support exporters in labour-intensive sectors such as textiles, jewellery, and seafood, particularly shrimp.
China notified Tokyo that it will ban all imports of Japanese seafood, Kyodo news agency and NHK reported on Wednesday, amid an escalating diplomatic dispute between Asia’s top two economies
Beijing earlier this year partially eased restrictions on Japanese seafood imports imposed in the wake of Tokyo’s decision to release treated wastewater from its the crippled Fukushima power plant into the sea in 2023.
Before that ban, China accounted for more than a fifth of all Japan’s seafood exports, according to official data.
China told Japan that the re-imposition of the blanket ban was due to the need for further monitoring of the water release, Kyodo reported, citing sources with knowledge of the matter.
But it follows a deepening dispute between the neighbours over Japanese Prime Minister Sanae Takaichi’s remarks earlier this month about Taiwan, the democratically-governed island claimed by China.
Takaichi told parliament a Chinese attack on Taiwan threatening Japan’s survival could trigger a military response, drawing an angry rebuke from Beijing and a demand for her to retract her remark.
Beijing has urged its citizens not to travel to Japan, while Tokyo has warned its nationals living in China to step up security precautions following a wave of vitriolic commentaries in Chinese state-media.
China’s commerce ministry and customs administration did not immediately respond to Reuters requests for comment. Japan’s farm ministry did not immediately comment.