There will continue to be quality issues with Chinese krill oil, but Chinese producers remain committed to bringing in updated technologies, according to Dimitri Sclabos, CEO of Chilean-based krill consultancy Tharos.

“Most importantly, they will strive to achieve efficient operations and the highest possible quality of end products”, he says.

Their goal is to be able to meet the expected domestic demand of at last 3,000 tonnes of krill oil by 2018. This demand is due to young middle class consumers who are concerned about their health and see krill oil as a means of maintaining and improving it.

“They see krill oil as being better than fish oil to help them in this respect,” says Mr Sclabos. “However, price is a hurdle to overcome.”

Krill oil is currently manufactured from whole frozen krill or dried krill meal manufactured on board the catching vessels. However, both products are later converted to krill oil on-shore. As well as in China, this is done primarily in the USA, Canada, New Zealand and Israel using solvent-extraction processes.

The krill meal and/or frozen krill can be transported long distances to the on-land premises where the oil is extracted, says Mr Sclabos.

Some Chinese krill oil brands go further, he adds, buying whole frozen krill oil which is converted to dried krill meal ashore then used to produce oil. “No matter how cost competitive the Chinese are, this triple-process is expensive, and worst of all, the final oil quality can be severely compromised and with it market acceptance and eventually the entire category jeopardised.”

Quality
Chinese krill oil quality problems are not only a matter of processing issues, but also the raw material used to extract the oil. Low quality krill meal is mostly what is bought by Chinese operators as the domestic market is limited to foreign krill meal brands which are not licensed.

As previously reported, China’s ‘Krill Project’ began in October 2010 when the Chinese State Ministry of Science officially launched its 863 Programme. The 863 Project is part of China’s Antarctic Ocean Living Resources Development strategy and is one of, if not the country’s most important, step to become, one of the key players in the Antarctic krill fishery.

Named ‘Rapid Separation of Antarctic Krill and Key Technology of Deep Processing’, its target is the exploitation and utilisation of South Antarctic krill.

The project was expected to transform the Chinese offshore fishing industry and lead to the growth and development of the marine economy in Liaoning and Shandong provinces.  But Chinese financial constraints have put the brakes on this programme and it is now partly in Chinese krill operators’ hands on how to maximise revenues and profitability using the best available technologies to compete with Western krill producers.

Although the Chinese government has trimmed the subsidies that helped Chinese krill operators survive, China will keep building its presence in the South Antarctic. At the beginning of March, the country had four trawlers registered with CCAMLR (The Convention on the Conservation of Antarctic Marine Living Resources)for the 2016 South Antarctic krill fishery.

Not all these trawlers may eventually take part in the fishery, but it is a good indication of China’s commitment.