Recession Proof? South Africa’s Abalone Still a Hot Export To China Despite Economic Cooldown
The Chinese New Year begins on Feb. 8, and to celebrate the Year of the Monkey, you can order braised whole South African abalone with sea cucumber in oyster sauce at the MGM Macau, China, in the Imperial Court by Chan Pak Chung restaurant.
The gourmet mollusk doesn’t come cheap. The price for the New Year’s menu is $110 per person, two-person minimum, according to a report in MacauDailyTimes.
South African abalone farms get a big boost this time of year. Abalones are a much sought-after delicacy in Asia with demand peaking around the Chinese New Year. Outside of Asia, South Africa is the largest exporter of farmed abalone, and almost all of it is destined for the Chinese market, BBC reported.
Dubbed “white gold” for its pearly flesh, abalone can fetch up to 4,500 rand ($282) per kilogram on the South African black market, and nearly three times that in Asia, Reuters reported.
Abalone is found in abundance in cold waters off Japan, Australia, New Zealand and the west coast of the U.S., but the South Africa ones are considered some of the best.
This puts the wild population at peril. Poachers from a global criminal network scour the rocks along South Africa’s coastline for abalone to meet insatiable demand from Asia, according to Reuters. Poachers can get 300 rand per kilogram ($18.86), and they’re hunting the species to the edge of extinction.
South African customs officials this week made an abalone bust with the help of a trained, abalone-sniffing dog. Abalone wrapped in plastic was found at the OR Tambo International Airport weighing 577 kilograms (1272.07 pounds) and valued at 2 million rand ($126,000 USD).
In October 2015, police seized abalone — known locally as perlemoen — valued at 17 million rand ($1.067 million US) — one of the biggest busts in the country in years, EyewitnessNews reported.
South Africa is the third largest supplier of farmed abalone in the world, producing in 2015 an estimated 1,450 metric tonnes (1598 US tons). By comparison, China farmed 50,000 metric tonnes of abalone in 2015 and South Korea farmed 10,000 metric tonnes, according to a report by the Centre of Excellence in Natural Resource Management (CENRM) at the University of Western Australia.
Aquaculture is one of the fastest-growing food producing sectors in the world, providing almost half of all fish for human consumption, and that’s projected to rise to 62 percent by 2030, CENRM data shows, according to a report in CapeBusinessNews.
Very high export potential
One South African asset manager is so confident of the future of South African abalone, that when it decided to invest in South African aquaculture, it included businesses that earn the majority of their revenue from abalone farming, CapeBusinessNews reported on Jan. 31.
Futuregrowth Asset Management manages more than 150 billion rand ($1.47 billion US) on behalf of retirement funds, and is setting aside around 200 million ($12.6 million US) for investment in sustainable aquaculture projects.
To date, the fund has invested in development projects ranging from infrastructure to pharmaceuticals and transport. It’s open to South African domiciled institutional investors.
Abalone aquaculture shows significant long-term growth prospects with very high export potential, said Futuregrowth investment analyst Amrish Narrandes. He described ablone farming as socially responsible, sustainable, and “under-invested in South Africa despite ongoing poaching of wild abalone populations.”
The fund likes businesses that earn the majority of their revenue from abalone aquaculture, “not only because of the growth prospects of that sector but also because of the strong contribution this makes to relieving pressure on wild abalone populations,” Narrandes said.
Sign up for the Moguldom newsletter — business news you need to know about economic empowerment for the digital age, delivered to your inbox.