Sea cucumbers are fished worldwide, with more than 50 species commercially exploited. The product is popular among oriental consumers due to its alleged ability to improve vigor and cure a number of ailments. In recent years, sea cucumber has been a premium item that creates a seller's market.
Between 1996 and 2011, the number of countries supplying sea cucumbers to the Chinese market expanded from 35 to 83. The increase in sea cucumber consumption in China is mainly due to rapid economic development. As tastes have become more advanced, the upper and middle classes have been searching for premium, healthy foods. In 2016, China's sea cucumber consumption reached 100 billion RMB (=14.3 billion USD).
More than 90% of the world's sea cucumbers are consumed by Chinese consumers, and China’s domestic production is increasing as a result. China has recently launched a sea cucumber farming project in the waters near Weihai. This farm is able to produce 350K tons of sea cucumbers annually. It is also noteworthy that the prices of imported sea cucumbers are rising sharply in China. According to the China Sea Department, the average price of imported sea cucumbers was 0.55 USD per kg in 2001, but had increased to 9.12 USD in 2008 and 9.92 USD in 2010.
Wholesale Price of Sea Cucumber in China (source: Tridge)
Despite the high demand in the market, the supply for high grade sea cucumber is limited in China, Korea and Japan which makes sea cucumber a good candidate for aquaculture. Japan, which produces 4.6% of the world's sea cucumber, already developed seedling production technology in the 1980s, and since 2012, large companies have been targeting the Chinese market with Hokkaido's well-known sea cucumber. Vertical integration is a major trend in the Japanese sea cucumber industry. A notable example is Maruha Nichiro, a leading Japanese fisheries company, which has fully integrated its production, processing, and export facilities.
South Korea used to be one of the major origins for high quality sea cucumber, but the production volume is very low these days. Last year, more than 90% of farmed sea cucumbers and more than 50% of sea cucumbers living in the wild died due to high sea temperature. Most of the export volume in Korea is now controlled by the National Federation of Fisheries Cooperatives, which has caused small and medium traders to step out of the export business.
While supply from Korea is getting scarcer, the United States’ sea cucumber harvest is finding success in the Asian market with its competitive price. Southeast Alaska harvested 544.3K kg in 2017. Alaska has also witnessed a change in the value of sea cucumbers around six years ago, as the supply is not meeting the demand. The price increased from 2.00-2.50 USD per pound to 4.00-5.00 USD per pound. In 2018 it shot up even further to 5.00-5.50 USD per pound.
Despite increasing volumes produced in Japan and the USA, the supply of sea cucumbers still does not meet the demand. The shortage is difficult to solve for the time being The sea cucumber industry is expected to enter its golden age, which will last for at least three years due to the ever-expanding consumption of sea cucumber, according to industry experts. Right now, the supply market is being led by China and Japan. Despite the increasing demand and high price for the product, sea cucumber fisheries in Southeast Asia are not highly developed, as they are artisanal fisheries in which sea cucumbers are just an incidental by-catch to finfish.
The sea cucumber industry appears to have been caught in a vicious cycle of high prices, leading to overfishing, which, in turn leads to a decrease in stock and total catch, pushing the price even higher. The depletion of wild sea cucumber stocks may eventually lead to low-value sea cucumber species becoming medium value, and medium-value species becoming high value, until many of the species have become depleted. Aquaculture appears to be the most viable solution to halting the declining supply.