Global seafood markets will be characterized by uncertainty in 2016, but economic growth in the United States and the EU should have a positive effect on demand. Despite the economic slowdown in China, a major importer, exporter, processor and producer of seafood products, overall traded
volumes are expected to remain stable. The prevailing stability of capture fisheries supply and the steady growth of the global aquaculture sector are expected to continue, with world per capita consumption of fish also forecast to keep growing.
The value of global trade in fish and fishery products decreased in 2015, contrary to the long-term trend.
The drop was the result of a range of factors: the strengthening of the United States dollar relative to many other currencies, which contributed to a fall in USD denominated prices for the most important traded species, the effects of El Niño on production, and the economic slowdowns of important emerging markets.
In 2016, however, more stability is expected, overall, and a rebound in the value of trade is possible in the second half of the year. This would be partly led by recovery on international quotations, as a tightening of supply is likely to drive prices higher for farmed salmon, cephalopods, seabass and seabream.
Economic difficulties in Russia and Brazil and slowing income and consumption growth in China are behind a softening of international demand for fish and fishery products in 2016, even though imports by the United States and the EU are expected to rebound. In Japan, a weaker currency and declining overall demand for seafood continue to represent significant challenges for importers.
The picture is brighter in many emerging economies, particularly in Africa and South and East Asia, where increasing income growth and urbanization is driving expansion of seafood consumption.
In 2016, the major exporting countries will continue to benefit from the strong US dollar, which has made their exports more attractive for buyers in the United States.
At the same time, a range of different factors, including a strong El Niño, are negatively impacting production volumes in many regions, in particular of salmon and bivalves in South America.
The international community’s efforts towards ensuring the sustainability and legality of catches is getting a strong boost from the FAO Port State Measures Agreement, which is to enter into force on 5 June 2016.
Shrimp
Export earnings from shrimp declined in most of the producing countries in 2015 due to lower market prices, although many producers were able to increase sales to non-traditional markets. The year 2016 has started with some stability in market prices. US imports increased by 6.5 percent during the first two months of 2016, due to lower inventories combined with stronger consumer
demand during the February–March Lent season, particularly within the catering trade. US buyers are now waiting for the seasonal supply, mostly of farmed shrimp, to begin in Asia.
In Europe, shrimp prices are expected to continue their downward trend due to plentiful stocks and the expectation of further arrivals of frozen shrimp, especially from Argentina’s record-high catches.
Sales within the EU were strong during the Easter holiday in late March, but European buyers are holding back in anticipation of further price discounts. On the production side, pond stocking has been delayed in India due to weather conditions as well as some disease issues. In addition, while demand for Vietnamese farmed shrimp is high, the processors often must buy unprocessed shrimp from other farms, which drives up the price.
Tuna
Throughout 2015, overall supply of tuna remained higher than the corresponding market demand for canned tuna. As a result, tuna packers in Southeast Asia, Ecuador and in the Western Indian Ocean built up large inventories.
Frozen skipjack prices fell to record low levels as did canned tuna prices. The lower tuna prices increased demand for canned tuna in emerging markets, but failed to make much of an impact on US and EU imports for conventional products, although US imports of pouched tuna increased and Spain managed to increase its exports of high-value canned tuna to the intra-EU market. These 2015 trends are likely to continue through 2016, as long as raw material prices remain stable. By March, declining supplies of tuna and lower inventories in canneries had led to strong demand for raw material, which resulted in increasing prices for both skipjack and yellowfin.
In Ecuador, skipjack prices reached USD 1 500 per tonne at the end of April. Demand from canned tuna buyers for tuna caught and semi-processed in Ecuador has also started to strengthen. Time will tell if this demand growth will continue long enough to affect overall tuna trade trends in 2016.
Groundfish
Overall, groundfish trade flows are expected to undergo some shifts in 2016, with more processing of raw material from Europe and North America to be done in Viet Nam instead of China. Currency trends will continue to play a key role.
Total supplies of groundfish are forecast to increase by just over 3 percent to reach 7.27 million tonnes for the year, according to estimates presented in March at the North Atlantic Seafood Forum. Supplies of Atlantic cod are forecast to remain about the same as in 2015, while there could be slight increases for pollock, haddock and saithe. Various types of hake are also expected to increase marginally, while supplies of hoki would likely decline by 3 percent. After three years of slight declines in total landings, the southern African hake fishery outlook is optimistic, with a 2016 forecast for a slight increase in production.
In the cod market, prices for Norwegian product are high at the moment, and demand for this high-quality fish is very strong in Europe. For pollock surimi, US production is expected to reach record levels of more than 210 000 tonnes in 2016 and, consequently, Japanese buyers are predicting prices to decline.
Tilapia
In 2015, the US and EU tilapia markets weakened and prices declined. Average export prices of Chinese frozen tilapia fillets were lower by 15.3 percent compared to 2014, falling to USD 3.86 per kg. At the same time, industry sources estimate a 40 percent drop in Chinese tilapia production in 2015, due to poor weather conditions coupled with continued lower demand in the major markets and issues relating to antibiotic use. Extreme cold weather in China and Taiwan Province of China affected many fish farms in early 2016, which is expected to result in lower production volume and,
subsequently, higher prices. While demand in major markets is relatively weak, regional Asian markets remain firm, reporting higher imports as well as strong local production.
Pangasius
Lower pangasius prices in 2015 did not encourage imports into the major markets. The US, the EU, Asia and Latin America remained the most lucrative markets for pangasius, while the leading producer, Viet Nam, continued to be plagued by production problems. According to the Viet Nam Association of Seafood Exporters and Producers, the value of Viet Nam’s pangasius exports is expected to continue to fall this year, for a year-on-year drop of 5 percent to USD 1.5 billion.
Challenges for the Vietnamese industry have included lower demand and stagnant selling prices as well as increasingly strict standards for food quality, hygiene and safety. As of late March, however,
industry sources were already reporting higher raw material prices due to supply shortages, and the upcoming high demand season – from April to August – has potential to put further upward pressure on prices, as Asian and Latin American markets absorb increasing volume of products.
Seabass and Seabream
After a year of lower harvests, firming prices and relieved pressure on producer margins, 2016 started off well for the seabass and seabream industry, with a sharp upturn in prices on European markets. Further reductions in supply from the major sources should see this situation continue, giving a further boost to the expanding Turkish industry and providing Greek companies the opportunity to build further on what are now more solid foundations. Total supply of bream fell
by approximately 6 percent in 2015, pushing prices strongly upward, and multi-year highs were reached in the peak midsummer season on the major Italian market. Bass production, meanwhile, remained flat compared with the previous year, which kept prices for this species relatively low. The tight supply situation can be expected to continue for at least the next two years, which should keep prices at a sustainable level and give the Greek industry time to recover further.
Salmon
News in the salmon sector for 2016 has so far been dominated by reports of a massive algal bloom in southern Chile that had killed some 27 million fish by 10 March.
Compounded by an expected drop in production in Norway, where growth is currently limited by sea lice issues, the supply shock has driven up previously depressed Chilean farmed salmon prices while pushing up the already high Norwegian prices even further. The total financial loss for the Chilean salmon sector resulting from the algal bloom is estimated at between USD 500 million and 1 billion.
For other producers, particularly Norwegian producers who are now well established in almost all major markets, the net 6.8 percent decrease in the global salmon supply and the sharp upturn in prices should be a huge boost to revenues and margins. However, this same price trend, together with the rising costs of treating diseases in pen farming, is increasing the attractiveness of land-based ventures that could take advantage of the supply gap.
For wild salmon, the situation is somewhat different, with prices still languishing after high catch volumes.
Small Pelagics
Global supplies of small pelagics are forecast to increase by 4 percent in 2016, entirely due to strong growth in supplies of anchovies. Supplies of Atlantic mackerel and Atlantic herring are expected to decline and, as a result, prices are likely to increase for both species, though fluctuations in currency exchange rates may give a somewhat uncertain price picture. Combined with a lower capelin quota this year, analysts expect the supply drop to result in less pelagic fish available for human consumption in 2016 than in 2015.
In South America, this year’s strong El Niño off the Pacific coast may create long-term problems for the anchovy fishery, with fishers already reporting low landings and a high share of juveniles.
Consequently, scientists fear that the long-term viability of this fishery, which is the world’s largest, may be in danger.
Fishmeal and Fish Oil
In 2015, the market demand for fishmeal and oil was eased somewhat during Peru’s second fishing season from November 2015 until January 2016, even though the total allowable catch (TAC) was set at only 1.1 million tonnes.
According to Peru’s Ministry of Production, 98 percent of the second fishing season quota was met, which means that the 2016 market demand should be met, to some extent, by catches from 2015.
In addition, Estudio Nacional del Fenómeno “El Niño” (ENFEN), Peru’s national institute for El Niño, reported that the El Niño strength would be moderate through the first half of 2016, which will lessen its impact on landings during this time. As a result, the fishmeal and oil market should remain relatively firm in terms of availability, and relatively lower prices can be expected, although the long-term trend is clearly upward. Climate change is strongly driving fish schools to move south to cooler waters, which makes anchoveta increasingly difficult to capture, while a high prevalence of anchovy juveniles in Peru’s second fishing season pointed to major issues for future feed supply.
Lobster
As of May 2016, supplies of lobster are strong, and the New England lobster season is expected to peak early in 2016. Consequently, prices may come under pressure. Weaker demand in China due to economic growth slowdown is also affecting prices negatively, and prices for lobster tails and live lobster may decline.
Bivalves
The world bivalve market was impacted by currency fluctuations and strengthening of the US dollar in 2015 and 2016, including the relatively lower value of the euro against the US dollar. EU countries reported lower bivalve imports, particularly the Spanish mussel processing industry, which moved away from expensive imports back to domestic products.
Chile, again confirmed as the number one exporter of mussels in 2015, increased its volume by 8.6 percent to 69 700 tonnes, due to strong levels of production. Chile’s 2016 production has suffered from warmer temperatures and algal blooms.
Meanwhile, oyster imports by the top two global markets, the US and Japan, increased by 15.9 percent and 49 percent, respectively, due to declining domestic landings and growing consumer
demand. World trade in scallops increased in 2015, though only due to Chinese growth. A study in early 2016 by the US National Oceanic and Atmospheric Administration (NOAA) found that species such as scallops, which are considered “specialists”, meaning they use a limited range of prey and habitats, are more likely to be vulnerable to climate change.
Crab
A significant reduction in the world crab supply is expected in 2016, due to a lower snow crab quota in Alaska and Russia’s crackdown on illegal crab fishing. Consequently, snow crab prices on the Japanese market are forecast to rise, while a more stable situation is predicted in the US.
Quotas for red king crab in the Barents Sea will increase, but with relatively modest growth.
