Greece
In Greece, a fragile bass and bream aquaculture sector has been buoyed by the upturn in prices resulting from a cut back in harvest volumes. As a result, the major farming companies have seen a steady improvement in financial results continuing into 2016. Not all companies have pulled themselves out of the red yet, however, and in their case improvement means a reduction in heavy losses rather than an overall return to profitability.
Considering that progress on cost reduction in Greece is lagging well behind that of other aquaculture industries, a recent paper from the University of Stavanger outlines that it is important for the sector that the price level is maintained at current or high levels.
Though Greek production volumes are marginally down, Spanish producers and Turkish exporters have together increased the total bass and bream supply in the EU market this year. This increase could potentially exert downward pressure on prices, particularly if the market uncertainty that has followed the UK's referendum vote worsens.
In the longer term, with the future stability of the Greek sector still far from guaranteed, it is likely that further consolidation with be necessary to reap the much needed benefits of economies of scale and ensure the continued competitiveness and profitability of the industry.
In the first quarter of 2016, Greece exported 2.3 per cent less combined volume of bass and bream compared with the same period in 2015, comprised of a 5 per cent drop in fresh bream exports and a 1.3 per cent increase in fresh bass exports.
These figures broadly reflect flat production growth at farms for the latter species and an estimated 10 per cent increase for the former. Average prices for both species rose marginally in the first quarter, building on 2015 gains, but dropped below 2015 levels in major markets by June.
In Italy, prices for bream were some 10 per cent down compared with June 2015, while prices for bass were around 14 per cent lower. Exports to Italy, traditionally accounting for around half of all Greece's bass and bream exports, fell by 8 per cent in volume terms while the Netherlands was notable in the first quarter for boosting imports of Greek bass and bream by 76 per cent.
Turkey
Turkey saw a downward trend in prices for the second quarter of 2016 due to unsold stocks of 2014 generation bream as well as the arrival of 2015 generation fish in markets, resulting in excess supply. Ex-farm (ice-packed) prices of bream in June were as low as EUR 4 per kg regardless of size.
Ex-farm prices of bass were slightly higher than the first quarter of the year ranging from EUR 4.00-6.50 per kg depending on size. It is also worth nothing that June 2016 coincided with Ramadan (fasting month) and thus domestic demand for fish is generally low during this period.
According to industry sources, the latest figures from hatcheries indicate that the number of juveniles stocked in cages in 2016 were nearly 10 per cent higher than compared with 2015. The same sources emphasize that the impact of this supply increase in coming year(s) will not be a major problem as the surplus will be balanced by reduced Greek production. In addition, major Turkish producers have started using sophisticated software in order to have a constant watch on their production costs and avoid sales below unit production costs. Industry sources believe that this will also help to control the cost-price balance more efficiently.
Italy
In early 2016, demand on the Italian market for bass and bream was strong. Despite higher prices for both species, import volumes in the first quarter increased 2.4 per cent overall, although there was a slight drop of 1.7 per cent in fresh bream imports.
Continuing the trend of the last few years, the proportion of fish supplied by Greece decreased to 57.3 per cent while the proportion supplied by Turkey, its major competitor, increased to 22.7 per cent. This development is the result of both increased availability of Turkish fish and their more attractive price due to lower production costs and favorable exchange rates.
Spain
In Spain, the aquaculture sector is growing, domestic production volumes and exports are increasing, and consumer demand for bass and bream is strong. According to market analysis firm, Kontali, the Spanish market is expected to absorb substantially more fresh bass and bream this year, while first quarter export volumes were up 11.7 per cent compared with the same period last year.
Specifically, bass exports were up 49 per cent while bream exports fell 21 per cent, with Portugal taking the bulk of the volume in both cases. Domestic production meanwhile increased for both species, but prices at wholesale markets remain relatively high.
France
French supermarkets are promoting the relatively cheaper imported bass and bream over domestically produced fish, with import volumes 8.3 per cent higher in the first quarter of 2016. While other major European markets are steadily increasing the proportion of Turkish fish in their imports, French consumers still favour Greek product.
Russia
Russia continues its downward trend in seafood trade due to the combined effects of the food embargo and decreased consumer demand. Imports of fishery and aquaculture products from January-April 2016 were 9 per cent down in value compared with the same period in 2015 and 12.5 per cent down in volume. Chile and the Faroe Islands were the largest supplying countries.
As of 1 July 2016, Russian imports of fresh bream and bass from Turkey amounted to 650 and 600 tonnes respectively. Despite the deficit of imported fish on the market, fish imports have been down due to the increasing prices.
Due to the recent improvements in the Russian-Turkish relationship, several measures will be implemented affecting trade. For instance, the ban on certain Turkish vegetables will be lifted and permission for tourism packages to Turkey will be granted. These measures may also positively impact the imports of bass and bream from Turkey, if Russian retailers and exporters manage to offer the fish to end Russian consumers at a suitable price level. It is estimated that for 2016 the share of imported fish on the Russian market will be 20 per cent, with the share of domestic fish close to 80 per cent.
Other markets
Overall, import volumes into European markets increased in the first quarter of 2016, supplied by higher volumes coming out of Spain and Turkey. Germany in particular was notable for strengthening demand for fresh Turkish fish, increasing import volumes of bass and bream by 33.4 per cent and 55.4 per cent respectively.
The report analyses the market situation over the period January-July 2016
