The recent sharp downturn in the market value of glass eels, reported in Nikkei Asia earlier this month, underscores the volatility of the international eel trade in its current form, where irregular patterns of supply and demand in Asia complicate long-term planning for stock sustainability. As production capacity has expanded in China and integration with informal and illegal supply chains has deepened, price fluctuations have become more frequent and more disruptive across the value chain. The reliance of aquaculture on a limited seed stock already exposes market participants to persistent uncertainty over pricing and availability. When short-term considerations begin to override longer-term planning for production and investment, the market becomes more vulnerable to sudden shifts in supply conditions, with limited capacity to absorb shocks.

The current decline in value is driven primarily by production dynamics in China, alongside uneven demand in Japan. In Fujian province, which produced around 120,000 tonnes of eel meat in 2024, accounting for roughly 40 per cent of mainland China’s total output, export activity has slowed sharply, with operators reporting that shipments to Japan have in some cases stopped altogether in recent months. The market price of eel meat has fallen to around 50,000 yuan per metric tonne, less than half of 2024 levels, while operating costs remain in the range of 60,000 to 70,000 yuan, leaving many smaller farms operating at a loss. Larger stakeholders have also been affected, including the Shanghai-listed Fujian Tianma Science and Technology, which recorded losses of 120 million to 180 million yuan in 2025 and has seen its share price fall by around 40 per cent from its January 2023 peak.

Official data from the Chinese fisheries ministry show a 12 per cent year-on-year decline in February exports to Japan, alongside a 20 per cent fall in unit prices, confirming that the downturn is broad-based and that the market has moved decisively into oversupply. This has already begun to reshape behaviour across the supply chain, with producers adjusting procurement strategies and seeking to manage input costs more tightly. In Guangdong and other farming regions, some operators are scaling back purchases of glass eels by as much as 30 per cent, while others are attempting to reduce exposure by developing their own fishing capacity or shifting towards more localised sourcing arrangements. The pressure on the Japanese eel, A. japonica, is significant, with nearly 70 tonnes of cumulative glass eel catches reported across Asia this season, including around 60 tonnes in China.

The current cycle reflects structural features of the eel market in which periods of strong supply are followed by rapid correction once demand in key importing markets becomes saturated. Although Japan, China, South Korea, and Taiwan maintain formal limits on the number of glass eels entering aquaculture systems, China is estimated to have exceeded its intended levels by nearly three times during the 2025 season. Those additional glass eels are now entering the final stages of growth and approaching market size, contributing directly to present oversupply conditions. At the same time, Japanese farms, after several years of weaker glass eel catches, have experienced improved availability and reached a point of saturation that has reduced demand for imported eel meat. As buyers curtail orders in anticipation of falling prices, pricing power has shifted towards consumers, reinforcing the cycle of volatility.

These dynamics shape expectations for how the market will behave as the current oversupply phase unwinds. Japanese demand remains structurally significant, accounting for around 70 to 80 per cent of Chinese exports, meaning that any tightening of supply is likely to be transmitted quickly into price increases and renewed incentives to expand capture. Industry participants note that when availability declines, the market has historically responded with rapid price escalation and increased pressure on wild stocks, often accompanied by a resurgence of informal or illegal sourcing to bridge supply gaps. Lower retail prices in Japan, including a 20 per cent fall in summer 2025 and expectations of a further 10 per cent decline in 2026, should not, therefore, be interpreted as evidence of a resilient stock.

These same dynamics informed discussions at the CITES Conference of the Parties last November, where concerns over fragmented management and trade leakage were raised in relation to all freshwater eel species. The Sustainable Eel Group supported the European Union proposal to list all anguillids under Appendix II as a means of improving traceability and aligning international trade controls with the realities of a market that adjusts through substitution rather than restraint. Although the proposal did not pass, the current downturn illustrates how price movements can set up the next phase of the cycle rather than resolve it. Falling prices are likely to stimulate a recovery in consumption, particularly in Japan, where demand has already proven highly sensitive to price.

If demand strengthens, the question is whether the A. japonica supply will be able to respond. Current fishing pressure in China suggests that much of the available stock is already being drawn forward into the present cycle, increasing the likelihood that recruitment constraints will re-emerge once this cohort has been harvested. In that scenario, the market’s historical response has been substitution rather than contraction. Declines in Japanese eel availability have previously led to large-scale shifts towards European eel, and, according to a 2015 report by TRAFFIC, subsequent restrictions have redirected sourcing towards other regions without eliminating the role of unreported and illegal glass eel movements into East Asian farms. There is little evidence to suggest that this behaviour has changed. Instead, a combination of recovering demand and constrained A. japonica supply would be expected to renew pressure on alternative species.

The difficulty is that the pathway back to A. anguilla is now largely closed in legal terms but not necessarily in practice. Since the European Union banned exports in 2010, European eel has continued to appear in supply chains in East Asia despite the absence of legal supply, indicating that demand has been displaced rather than reduced. A rebound in consumption under conditions of constrained A. japonica availability is therefore likely to increase incentives for informal sourcing rather than ease pressure on wild stocks. The current glut should be understood as part of a recurring cycle in which lower prices stimulate demand that cannot be met sustainably, prompting renewed pressure on substitute species and reinforcing the underlying instability of the market. A coordinated international response is required.