Why?
# Increased demand in region
# Decreased supply due to bad weather
# Stricter restrictions by supplier countries
Jamie Ee Wen Wei Straits Times 25 Nov 10
THAT abalone dish which is a part of reunion dinners every Chinese New Year is likely to cost more next year.
While price increases leading up to the festive season are common, the cost of the shellfish to suppliers already rose by up to 20 per cent in June due to higher demand in the region and tighter supply.
Importers and wholesalers said they expect prices to climb by another 10 to 15 per cent during the festive period.
A 425g can of abalone from New Zealand, which cost around $38 in January this year, is now priced at about $40 and will cost about $42 during Chinese New Year, which falls on Feb 3 next year.
Mr Goh Kai Kui, chief executive officer of Goh Joo Hin, which distributes the New Moon brand of abalone, said the price hike has come about because of increased demand in the region, namely from Hong Kong, China, Malaysia and Singapore.
While the appetite for abalone has grown, supply has been hit by weather conditions and tightened fishing restrictions in abalone-supplying countries such as Australia.
In July, storms in South Australia hit abalone farms there, damaging cages and infrastructure. Typhoon Megi last month also affected the shellfish stock of several abalone farms in China.
Mr Dean Lisson, chairman of the Abalone Council of Australia - the industry body that represents the five abalone-supplying states of Tasmania, Victoria, South Australia, Western Australia and New South Wales - said the Tasmanian abalone industry, the largest supplier of wild abalone in the world, is in the final stages of negotiating with the government a 20 per cent reduction in the harvesting quota for the eastern coast of the state.
That area is Tasmania's most valuable fishing zone as it supplies almost 900 tonnes of live abalone to China, Taiwan, Japan, Hong Kong and South-east Asia.
From January to March next year, the eastern zone will also be closed off to allow abalone stocks to rebuild, Mr Lisson added.
The shortage has resulted in companies looking for alternative supplies.
Mr Kent Soh, chief operations officer of V.K. Global, which distributes live abalone to the region, said he secured stock from a South American breeding farm about six months ago and should be able to meet demand for Chinese New Year.
Chin Guan Hong, which supplies abalone to restaurants and hotels, has been stocking up despite the cost increase to ensure it can meet demand for the festive season, said its assistant manager Charlotte Yao.
Demand here is already heating up.
Mr Wilson Ngan, chief executive officer of Kwang Yeow Heng, which produces the Skylight brand of abalone, said its order sheets for the delicacy have already been filled for the festive period.
'Usually, our orders will be filled up by December but this year, it's a month earlier because wholesalers, retailers, restaurants and hotels are worried there won't be enough stock.'
Cantonese restaurant Hua Ting at Orchard Hotel has so far absorbed the cost increase and has not raised prices for its abalone dishes. Its group master chef, Mr Chan Kwok, said its suppliers are contracted on a six-month basis, so the cost is fixed for that period. It is reviewing the type of abalone to use next year.
Mr Mario Chua, who runs a sundry goods shop and is the chairman of the Victoria Street Wholesale Centre Merchants' Association, said the strong Singapore currency and favourable exchange rate may help to rein in prices, but he is still worried that customers will be turned off.
'I don't dare to order too much stock because if the price is too high, customers may not want to buy,' he said.
Madam Mary Tan, 53, who owns a dessert shop, said she is buying just one can of abalone for Chinese New Year instead of the usual two to three cans.
'Abalone is still a must for Chinese New Year but maybe I won't buy so many cans because it is more expensive,' she said in Mandarin.
