Developing a

What  are the expectations for China this season?

CHINA, Germany and Russia are showing the fastest pace of deterioration among large economies as the entire global system succumbs to a "deep slowdown". The warning came as Chinas Banking Commission said it would prove "exceptionally difficult" to meet the country's 8pc growth target for 2009, the level seen as crucial to prevent unemployment from rising and setting off civil unrest. Like for all of us the downside risk to the Chi­nese economy is even worse than expected.

The OECD's gauge of "Lead­ing Indicators" - which gives warning of trend changes a few months in advance - shows an abrupt rupture in Asia, and among commodity producers, with the most dam­age surfacing in countries with an export surplus that depend on sending goods abroad.. China's exports began to fall in November as the global recession wrought havoc as Glynn observed on his visit but now also reported for the toy, textile and steel indus­tries.

The central bank has cut interest rates fives times in the past three months and let the yuan slip and like European Governments is poring money  ($600bn (£4051m) into the economy  to try and stimulate the economy . Countries that rely too heavily on exports to fuel growth are starting to pay the price. Tthey are at the mercy of forces beyond their control.

One thing China is good at is national  investment projects and no doubt it will be the first recover from the financial crisis.

For French  glass eel producers the financial stimulus is unlikely to be any benefit until the end of this year. Economic growth could fall from double digit figures down to as low as 5pc this year.  For an eel industry that is already in recession and has made no margin for the last two years  this is not good news.  There is an immediate requirement for  three tonnes of glass eels for China and talk of another ten tonnes for the rest of the season.  If this is true the demand is significantly less than last year. For the moment there is a gap in the price expectations  between Europe and Asia and certainly no possibility  of trade starting until after the Chinese New year.

For a short time the price of AJ recovered to  4 rmb but with production improving slightly and  less demand from Korea prices have now fallen back to 3 rmb per piece. The lowest prices for AJ several years.

The eel farming business in China has created huge excess capacity which is geared to world markets. No doubt there will be efforts to dump large quantities of frozen eel in Europe. But the reality is that Europe cannot absorb the thousands of tonnes  of inventory  that are  believed to be held on farms. The long term solution must be to stimulate demand at home otherwise we will be seeing some giant eels on the market in 2012.  

On the positive side any attempts to ignore the CITES export ban on glass eels will probably be superseded by lack of demand from China.

At last it seems every corner of the world has at last been drawn into the vortex of recession.

Melamine Again
If the financial down turn has not been enough there are now reports  from  aquaculture industry experts in China stating  that the industrial chemical melamine has been routinely added to fish and animal feed to artifi­cially boost protein readings.  (The LA Times).  Nothing reported for eel yet. Melamine in Chinese-produced milk powder has made hundreds of thousands of children ill and added to a growing list of made-in-China foods banned across the globe.

New research suggests that, unlike in cows and pigs, the edible flesh in fish that have been fed melamine contains residues of the nitrogen-rich substance.

Laboratory studies of mela­mine-fed catfish, trout, tilapia and salmon by the FDA's Animal Drugs Research Center found that fish tissues had melamine concentrations of up to 200 parts per million — 80 times the maximum amount set by the FDA for safe consumption.

One Euro = 9.01 Chinese yuan (rmb)