HIGHLIGHTS 30/7/2010. A quarterly update based on the GLOBEFISH databank. Issue 3/2010

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1 HIGHLIGHTS 30/7/2010 Issue 3/2010 A quarterly update based on the GLOBEFISH databank Shrimp prices recovered strongly The general economic recovery led to brisk shrimp trading in the first half of Generally demand exceeded supply, and prices moved up sharply. Shrimp importers and traders in the main markets were unable to build up inventories, as the product moved quickly. p. 2 Sky high tuna prices impact world market Tuna catches in the Western Pacific have been very low this year. The biologists blame the decline in catches on high water temperatures and the resulting thick warm water layers which skipjack schools try to avoid. This dispersion of the tuna schools makes fishing less efficient. p. 8 Groundfish species face strong competition During all of 2009 and early 2010, groundfish prices declined as a result of good supply and strong competition from other whitefish species, such as pangasius. Supply was very good for Alaska pollock from Russia, but also for cod from the Barents Sea, a noteworthy return for a well managed species. p.13 Better demand in cephalopods market is thwarted by low supply The economic crisis, which impacted the world cephalopod market in 2009, seems to be declining and demand for cephalopods is going up. However, traders are still quite cautious, and are trying to buy smaller specimens at discounted prices. p. 16 Smaller quantities of tilapia in the market Supply of tilapia from China, the world s main producing country will be down by 20% in This decline was primarily caused by the extremely cold winter in early 2010 in China, wiping out whole production areas. In addition, the production will enter the market two months later, as growing out was much slower in the early months of the year. p. 20 Pangasius is an important commodity in world trade Growing exports expected from Viet Nam this year. EU imports grew 10% in first quarter but pangasius is making inroad also in new markets such as Mexico and Brazil. p. 22 Weaker bream prices as demand is slacking Demand in the large European cities is declining as schools close for the holidays and consumers start spending more time out-of-town. The seasonal contraction in demand is putting downward pressure on bream prices for which supplies are ample, also helped by new generation fish reaching market size. p. 24 Tight supply is driving price increases The Atlantic salmon market continues to be undersupplied as Chile s production in 2010 is reaching rock bottom. As a result prices are at their highest levels for many years although sluggish demand over the summer should ease prices somewhat. Higher water temperatures will also boost growth levels with additional volumes coming to market over the next few months. p. 27 Fishmeal prices already 20% lower Fishmeal prices reached a peak of USD 2 140/tonne in April This price hike was caused by several factors, including low production in Peru, disruption in the aftermath of the Chilean earthquake leading to closure of several factories, and strong demand from China. p. 32 Fish oil important part of aquaculture feed composition, 2010 prices rising Fish oil production is currently around 1 million tonnes per year. From this production, about tonnes is destined for human consumption, mainly as fish oil capsules, while the use as margarine hardener has now practically disappeared. p. 34

2 About GLOBEFISH GLOBEFISH forms part of the Products, Trade and Marketing Service of the FAO Fisheries and Aquaculture Department and is part of the FISH INFOnetwork (see below). It collects information from the main market areas in developed countries. Part of its services is an electronic databank and the distribution of information through the GLOBEFISH European Fish Price Report, the GLOBEFISH Highlights, the GLOBEFISH Research Programme and the GLOBEFISH Commodity Updates. The GLOBEFISH Highlights are based on information available in the databank, supplemented by market information from six regional services which form the FISH INFOnetwork: INFOFISH (Asia and the Pacific), INFOPESCA (Latin America and the Caribbean), INFOPECHE (Africa), INFOSAMAK (Arab countries), EUROFISH (Central and Eastern Europe) and INFOYU (China). GLOBEFISH Highlights are distributed to the subscribers of: INFOFISH Trade News, INFOPESCA Noticias Comerciales, INFOPECHE Nouvelles Commerciales, through EUROFISH and INFOYU. GLOBEFISH Highlights are also available in electronic form. For subscription details please contact: GLOBEFISH, FIPM/FAO Tel: (39-06) Viale delle Terme di Caracalla Fax: (39-06) Rome, Italy Web: All rights reserved. Reproduction and dissemination of material in this information product for educational or other non-commercial purposes are authorized without any prior written permission from the copyright holders provided the source is fully acknowledged. Reproduction of material in this information product for resale or other commercial purposes is prohibited without written permission of the copyright holders. Applications for such permission should be addressed to the Chief, Electronic Publishing Policy and Support Branch, Communication Division, FAO, Viale delle Terme di Caracalla, Rome, Italy or by to FAO GLOBEFISH 2010 Bibliographic reference: GLOBEFISH Highlights 2010 FAO/GLOBEFISH Highlights (3/2010): p. 35 A quarterly update based on the GLOBEFISH databank

3 GLOBAL FISH ECONOMY Confronted with sluggish consumer demand and a series of supply constraints, world production of fish products is estimated to have increased marginally (by less than 1%) to million tonnes in The dynamic aquaculture sector is expected to be responsible for all of the limited gain, despite severe setbacks incurred by the industry, including salmon diseases, which halved 2009 Atlantic salmon output in Chile. Supply from world capture fisheries, on the other hand, has stagnated, constrained by the application of fishing quotas and falling profitability. Accordingly, aquaculture is estimated to have increased its share of world fish production from 36.9% in 2008 to 37.5% in Further production inroads are expected from the sub-sector in As consumer confidence and discretionary spending improve, world demand for most fish products is slowly returning to normal. As in 2009, aggregate food consumption of fish in 2010 is expected to grow barely in line with population, keeping average per capita fish intake virtually unchanged. The economic downturns are estimated to have had a marginal negative effect on the volume of fish traded internationally in 2009, now assessed at around 52.5 million tonnes (live weight). However, the contraction was far more pronounced in value terms, in the order of 8%, to an estimated USD 94.5 billion, as prices declined and import demand shifted towards less expensive species. With the exception of Viet Nam, most exporters suffered a contraction in fish export earnings in 2009, in particular, Canada, Chile, Ecuador, India, the Russian Federation and the United States. The value of fish imports, on the other hand, was down in 2009 in the EU, Japan, Mexico, the Russian Federation and the United States. Under current prospects for a slow recovery of world demand, fish trade is expected to grow somewhat to 52.8 million tonnes in 2010, while, in value terms, it may bounce back by 7% and again surpass the USD 100 billion mark, albeit remaining short of the record achieved in Based on the FAO Fish Price Index, prices weakened in late 2008 and early 2009, reaching their lows in March However, some increases in prices have taken place in recent months, for instance for shrimp, tuna and salmon. The fisheries sector remains heterogeneous with quite diverse price patterns for different species and origins, despite the high degree of substitution in processed products. A strengthening of prices of some aquaculture products, such as shrimp in early 2010 mostly reflected shrinking supplies, as producers adjusted to weak demand in 2008 and 2009 by cutting production. In the case of Atlantic salmon, disease problems have constrained supply, also leading to price rises. World fish markets at a glance Change estim. f cast 2010 over 2009 million tonnes % WORLD BALANCE Production Capture fisheries Aquaculture Trade value (exports USD billion) Trade volume (live weight) Total utilization Food Feed Other uses SUPPLY AND DEMAND INDICATORS Per caput food consumption Food fish (kg/year) From capture fisheries (kg/year) From aquaculture (kg/year) Totals may not match due to rounding. Globefish Highlights July

4 SHRIMP Shrimp prices recovered strongly The general economic recovery led to brisk shrimp trading in the first half of Generally demand exceeded supply, and prices moved up sharply. Shrimp importers and traders in the main markets were unable to build up inventories, as the product moved quickly. All main markets reported increased imports in the first quarter of The weakening of the EUR impacted the world shrimp market in the second quarter, and more shrimp was aimed at the US and the Japanese market instead. The Gulf of Mexico oil spill resulted in very low US shrimp production, leading to more demand for imported shrimp. The news on lower supplies from Viet Nam, Indonesia and Bangladesh also made prices move upwards. Prices are likely to increase to some extent in the coming months to stabilize at a high level during the last part of the year. Supply situation continues tight Some major cultured shrimp producers reported declining production in 2010, following the negative trend experienced in Viet Nam, Bangladesh and Indonesia will again have lower outputs. The cold winter delayed Chinese shrimp farming significantly in the opening months of In the overall climate of low aquaculture production, Thailand seems to be the only main player with a good production outlook. This country will thus be able to expand its dominant position in the US market and become the main supplier also to the Japanese market. Viet Nam reported lower shrimp production in Strong offer prices from packers in the Mekong Delta indicate persistently reduced supply of black tiger shrimp in that country. Vannamei farms in central provinces and black tiger shrimp farms in southern provinces were hit Wholesale prices Shrimp*: Japan by the extremely hot weather (38 C), which has affected growth rates and caused disease problems. Bangladesh will probably produce less shrimp in 2010 then in 2009, as supply shortage for black tiger shrimp is reported. Farms in several areas are affected by mass mortality of shrimp linked with inadequate pond preparation prior to pond stocking. Indonesia s vannamei farming sector is yet to recover fully from the disease crisis experienced in 2009; hence supplies remain low from this source. Supplies of black tiger shrimp are also lower than expected keeping raw material prices high in the place of origin. Shrimp farms in Honduras were seriously affected by a tropical storm and subsequent heavy rains. The crop losses are estimated to have exceeded USD 1.5 million. Serious damage to roads is affecting access to the farms. Low salinity of the water, caused by heavy rainfall is another cause for concern for future crops. In Peru shrimp supply is estimated to be 15% lower than in 2009 as many farmers did not stock their ponds because of low prices last year. 17 USD/kg Japanese demand for shrimp is strong /20 This year, supermarkets in Japan were the major buyers of head-on black tiger shrimp during Spring sales. Demand was basically focused on two sizes: 30 and 35 pieces/kg. Japanese consumers preferred to eat at home rather than expensive dining out, thus restaurant demand was very limited. 7 31/40 5 Jun-03 Jun-04 Jun-05 Jun-06 Jun-07 Jun-08 Jun-09 Jun-10 * Black tiger, headless, shell-on, origin: Indonesia Source: INFOFISH Trade News; GLOBEFISH AN during January-March 2010 increased by 1.7% compared with the corresponding period of last year. Figures obtained from the total Custom s cleared quantity showed that the share of prepared and processed shrimp dropped to 25.4% from 26.5% in 2009, although imports 2 Globefish Highlights July 2010

5 SHRIMP Shrimp (frozen raw): Japan...Jan-Dec......Jan-Mar (1000 tonnes) (1000 tonnes) Thailand Indonesia Viet Nam India China Russia Malaysia Canada Myanmar Greenland Argentina Bangladesh Philippines Others Total Shrimp: USA...Jan-Mar Thailand Indonesia Ecuador China Viet Nam Malaysia Mexico India Bangladesh Guyana Venezuela Peru Others Total Source: NMFS Source: GLOBEFISH AN of sushi shrimp on rice, mostly supplied by Thailand, surged significantly. With a 68% market share, Thailand, Viet Nam, Indonesia and China were the top shrimp suppliers to the Japanese market. Compared with the same period in last year, overall supply from Thailand also increased significantly to tonnes (+31.5%) followed by Viet Nam at tonnes (+7.4%). from Indonesia and China fell. Wholesale prices Shrimp*: USA, Japan USD/lb Indian white, Tokyo Gulf brown, New York 3 Jun-03 Jun-04 Jun-05 Jun-06 Jun-07 Jun-08 Jun-09 Jun-10 * Frozen, headless, shell-on, count Source: INFOFISH Trade News; GLOBEFISH AN 10205, The inventory situation in Japan was very tight for large sized shrimp in the second quarter of the year. The strong yen also supported the market. Import prices softened temporarily in April but firmed up from May onwards following the oil spill incident in the USA. Prices increased by USD 0.60/kg in June for all origins. US shrimp prices soar due to oil spill The Gulf of Mexico oil spill problem is overshadowing the US shrimp market. In normal years, US domestic shrimp production is relatively limited with regard to total US shrimp consumption, contributing about 10% of total supply. The area affected by the oil spill represents some 6% of total US shrimp consumption. However, domestic US shrimp production normally influences the price level in summer months, the main production period for US shrimp from the Gulf of Mexico. As a result of the oil spill, important fishing areas for shrimp have been closed, which means longer fishing trips for shrimp trawlers to reach areas where shrimp catching is permitted. Production will probably decline sharply. As a result, traders are very cautious with existing inventories. In addition to lower domestic production, imports are also lower than in As a result of limited supply, prices are going up very quickly, as shown in the graph. Black tiger shrimp reported USD 1.10/lb higher prices in just two weeks in June These price hikes are based on limited supply and fear of the impact of the oil spill, rather than actual consumer demand. The Globefish Highlights July

6 SHRIMP Shrimp: USA Product tonnes 1000 USD tonnes 1000 USD Peeled frozen Other frozen Breaded Other preparations Headless shell-on frozen All sizes < / / / / / / / > Other products Total Source: NMFS US stock market is quite weak at the moment and the unemployment rate is increasing, resulting in overall poor consumer confidence. US shrimp imports declined by 4% in the first quarter of 2010, mainly owing to limited production in the main supplying countries, as mentioned above. Thus Thailand managed to expand its exports to the US market by 7%, now representing 35% of total US shrimp imports. In contrast, Indonesian shrimp exports declined by 30% as a result of the disease problems experienced in this country. Growth in all European markets All EU markets reported strong trade in the first half of 2010, with imports increasing in all main markets. The economic crisis seems to be declining, and all indicators show an improved shrimp trade, both for supermarkets and restaurant sales. In the last two months, however, the decline in the value of the EUR has slowed the overall positive development. Price hikes have dominated the market, and some consumer resistance is expected to materialize. Spain continues to be the main importer of shrimp in the EU. Despite the economic crisis last year, imports Shrimp: Spain...Jan-Mar China Argentina Ecuador Colombia Thailand Morocco Belgium Nicaragua Netherlands Others Total Source: GLOBEFISH AN were strong and continued to increase during the first half of 2010 by 10%. Main suppliers to the Spanish market continued to be China and Argentina, while Thailand is increasing supply to this market, from a mere 200 tonnes to tonnes. Further increases in shrimp imports are likely, even though prices are expected to go up further. Spanish traders of shrimp source the comodity worldwide, and are able to change quickly from one supplier to another. Prices offered by Spanish traders are generally competitive, making this country a good market for all shrimp producers world-wide. It is surprising, however, that coldwater shrimp is not playing any important role in this market. Shrimp: Germany...Jan-Dec......Jan-Mar Thailand Viet Nam Netherlands India Bangladesh Belgium UK Denmark Others Total Source: GLOBEFISH AN Globefish Highlights July 2010

7 SHRIMP Shrimp: UK...Jan-Dec......Jan-Mar Shell-on Coldwater Denmark Others Total Shell-on Warmwater India Indonesia Thailand Bangladesh Viet Nam Honduras Ecuador Denmark Others Total Cooked & Peeled Iceland Denmark Thailand Indonesia Canada Others Total Gr. Total Source: GLOBEFISH AN Shrimp: France...Jan-Mar Ecuador India Thailand Colombia Madagascar Netherlands Bangladesh Spain na na Vietnam Belgium Brazil Indonesia Others Total Source: GLOBEFISH kg, or GBP /kg higher than coldwater shrimp prices. This shows that there is a margin for higher prices for the Pandalus borealis product as well. However, the exchange rate of the British currency in 2009 was, on average, lower than in The German shrimp market grew substantially in Total imports reached a record high of tonnes in 2009, tonnes more than in The UK shrimp imports grew by 5% in 2009, with the cooked and peeled sector (C&P) being mainly responsible for the increase. In the first quarter of 2010, generally an off season for shrimp trade, UK shrimp imports grew further by a significant 10%. In the C&P tropical sector suppliers increased their presence, while the traditional coldwater shrimp suppliers lost ground. The product split in UK imports seems to be in the process of changing, as processed shrimp (mainly C&P) now accounts for more than 52% of total imports, a trend which is continuing. Tropical shrimp is now entering the UK market in C&P form, a development which has mainly favoured Thai exporters. With regard to price developments during 2009, it is significant that the value of C&P products went up, after years of continuous decline. It is also important to note that Thailand s unit value of C&P shrimp is GBP 5.20/ Shrimp: Italy...Jan-Mar Ecuador India Argentina Spain Denmark Netherlands France Viet Nam Thailand Others Total Source: GLOBEFISH AN Globefish Highlights July

8 SHRIMP Shrimp: Denmark...Jan-Mar Greenland Canada UK Faroe Isl Thailand Others Total Source: GLOBEFISH Exports Shrimp: Denmark Russia Sweden China UK Norway Germany Italy Netherlands Others Total Source: GLOBEFISH increase in shrimp imports by Germany is not surprising as the big supermarket chains are all now offering shrimp products, and the discount chains have also recently included shrimp in their product range. The upward trend continued in the first quarter of 2010, when imports increased by 17%. Thailand is the main supplier to the German market with tonnes in 2009, followed by Viet Nam with tonnes. Both countries expanded their exports considerably. Bangladesh managed to almost double its exports during 2009 to reach tonnes. This country is exporting more value added frozen shrimp products such as easy peel shrimp and with sauces added to their shrimp products. Shrimp Volume Imported by EU-27, USA and Japan - January-March (in tonnes) Comparison to 2009 in % Tonnes JAPAN EU 25 (intra) EU 25 (extra) JAPAN EU 25 (intra) EU 25 (extra) JAPAN EU 25 (intra) EU 25 (extra) JAPAN EU 25 (intra) EU 25 (extra) JAPAN EU 25 (intra) EU 25 (extra) JAPAN EU 25 (intra) EU 25 (extra) +2% 0% USA USA USA USA USA USA -5% Globefish Highlights July 2010

9 SHRIMP Shrimp production by main species Others 28% Penaeus vannamei 38% Northern praw n 7% Source: FAO Akiami paste shrimp 10% Giant tiger praw n 17% French shrimp imports were stable during the past 7 years at between to tonnes. Frozen shimp are by far the main form of imports and in this category, frozen warmwater shrimp are most popular. The supply comes from Latin America (Ecuador is the main supplier of shrimp to the French market), India (strong growth in 2009) and Madagascar (some decline last year). The French market pays a premium for high quality shrimp, for example Madagascan shrimp is priced at EUR 8.28/kg, while the Indian shrimp price is around EUR 4.69/kg. Overall, the unit value of shrimp imports by France declined from EUR 5.09/kg in 2008 to EUR 4.84/kg in During the present year, however, prices have started to move up quite substantially. Further price increases likely In June, the appreciation of the yen helped Japanese importers to conclude some solid deals even at higher prices. Price increases in the international market, however, are not positive for Japanese traders as they are afraid to pass on the higher price to end consumers. Under the tight supply situation, Japanese importers are not in a position to dictate market prices either. Therefore, depending on the strength of the yen, sporadic import deals are expected to replenish stocks, at least for summer holiday sales. The US shrimp market, which for such a long time had been driven by buyers interest, has now become a sellers market. Larger sizes of shrimp are in very short supply, with prices reaching the highest levels in two years. Importers and sellers of domestic shrimp, holding larger sizes, are expecting a further rise in price. Countries of the EUR zone will have problems to stay competitive in the world market, in view of the declining value of the EUR with regard to the USD and the yen. The impact might be strongest in the Spanish market, where the economic crisis is declining, but unemployment levels are extremely high now, and shrimp consumption is likely to be impacted. In addition, fewer tourists going to the Spanish resorts will result in lower demand for shrimp products. On the other hand, the outlook for the UK shrimp market is quite positive this year. Higher prices are likely, and have materialized already during the opening months of The EUR crisis led to a stronger GBP, which should attract some additional supply, at least from Asian production. The promotion of coldwater shrimp products, tailored to meet customer demand, should encourage continued momentum in this important market. Globefish Highlights July

10 TUNA Sky high tuna prices impact world market Tuna catches in the Western Pacific have been very low this year. The biologists blame the decline in catches on high water temperatures and the resulting thick warm water layers which skipjack schools try to avoid. This dispersion of the tuna schools makes fishing less efficient. In addition, fuel prices are going up again and, as in 2008, tuna operators are fishing less frequently. Prices are up in all markets and for all tuna species. Some consumer resistance is expected, once the raw material price hikes are passed on to retailers. C&F Prices Frozen Skipjack: Thailand and Africa USD/tonne Africa Thailand Golden Week (early May) is the longest holiday period for the working class in Japan and many workers have taken time off for a longer vacation. This period of the year sets the tone for tuna trading. This year fewer Japanese travelled overseas with more internal flights reported. The impact of this on the sashimi market is noteworthy. More Japanese went to restaurants during Golden week, and sashimi sales were brisk, generally at much higher prices. As usual, demand for sashimi declined sharply soon after the holiday period. Summer months are low consumption periods, as the hot weather makes the tuna spoil quickly mar-03 mar-04 mar-05 mar-06 mar-07 mar-08 mar-09 mar lbs: Source: GLOBEFISH AN Tuna catches very low in second quarter Slow catches, rising raw material prices and reluctance from canned tuna buyers characterize the market both in Europe and globally. The 30% jump in the Bangkok skipjack market price during May 2010 was followed by another substantial increase in June. Skipjack kg now sells for at least USD 1 700/tonne in Thailand, up from USD 1 500/tonne in May. Inventories of raw material declined in Bangkok as canneries were either unwilling or unable to replace them with new stock. Canneries are reducing daily production volumes in reaction to a decline in orders from the market. The three month closure of the FAD fishery in the Western and Central Pacific commencing 1 July has added to expectations that catches will not improve. Slow landings also impacted the price of tuna in Latin America where the price increased to USD 1 700/tonne and is expected to continue going up to a level high enough to compete with Thailand. Tuna transhipped in the Western and Central Pacific to reefer carriers is shipped to Latin American only when the South American buyers are willing to pay for the additional freight expense associated with delivering to that market. Frozen tuna: Japan...Jan-Dec......Jan-Mar... Yellowfin Bigeye Skipjack S. bluefin Albacore N. Bluefin Total Source: INFOFISH However, unlike the previous years the market showed some positive trends in June. Improved demand and prices were observed for bluefin and yellowfin, which could be linked to poor catches of summer skipjack from Japanese domestic waters. Unlike previous years, supermarkets are less active in the promotion of skipjack owing to high prices; they are focusing more on redmeat quality tuna, the quality of which is not as good as last year. Another interesting trend is influencing the Japanese tuna market. Japanese consumers, with lower food budgets, are preparing more food at home 8 Globefish Highlights July 2010

11 TUNA rather than purchasing ready-prepared take-away meals. Thus the cheaper skipjack tataki (skin-roasted skipjack) is enjoying better household demand compared with yellowfin and bigeye tuna. Sales of tataki in supermarkets increased during spring Reportedly, per capita consumption of skipjack is increasing in Japan whereas it is going down for other tuna species. Fresh/chilled tuna: Japan...Jan-Dec......Jan-Mar... Yellowfin Bigeye Bluefin S. bluefin Albacore Skipjack Total Source: National Statistics The strong demand for skipjack is also reflected in Japanese import statistics. In fact skipjack imports increased by a 40% in the first quarter of 2010, compared with the same period of As a result, fresh and frozen tuna imports were 5% higher. Tuna pouches: USA...Jan-Dec......Jan-Mar... Thailand Ecuador Others Total Source: NFMS: GLOBEFISH AN US market well covered The US market for canned tuna was very strong in the first quarter of the year, with imports increasing by 34% to reach more than tonnes. Thailand was the main supplier, with more than 60% of the market. These huge imports are in part explained by the low tariffs at the beginning of the year, but also by the relatively low canned tuna prices in the opening months of Traders were replenishing their inventories, as higher tuna prices were already forecast during the first quarter of the year. Higher exports from Thailand During the first quarter of 2010, Thai canned tuna exports grew significantly driven mainly by increasing sales to the US and Middle Eastern markets. Compared with the same period of the previous year, exports went up 25% in quantity and 7.8% in value. The Thai canners thus took advantage of the lower raw material prices at the beginning of the year to reopen previously lost markets in the Near East, selling at highly discounted prices there. Meanwhile, Thai Union Frozen Products (TUF), the country s largest tuna producer and exporter, reported a 27% increase in its net profits during the first quarter of this year. Exports Canned tuna: Thailand...Jan-Dec......Jan-Mar... USA Egypt Australia Canada Libya S. Arabia Japan UK S. Africa Germany Others Total Source: GLOBEFISH AN Challenges for European tuna canners European canners face severe problems in Apart from high labour costs, which are a permanent challenge for European tuna canners, the lower value of the EUR led to over-priced tuna raw material. The price of skipjack in the Seychelles increased to EUR 1 150/tonne with Indian Ocean tuna processors having to raise prices to prevent fish from being shipped out to the Bangkok market. The decreasing value of the EUR coupled with limited supply resulted in an increase in the value of yellowfin to EUR 1 800/tonne CIF Italy. Meanwhile, more Globefish Highlights July

12 TUNA Canned tuna (excl. pouches): USA...Jan-Dec......Jan-Mar... Thailand Philippines Indonesia Ecuador Others Total Source: NFMS: GLOBEFISH AN Fresh Tuna : USA...Jan-Dec......Jan-Mar Albacore Yellowfin Bigeye Bluefin Skipjack Others Total Source: ITN Tuna loins: USA...Jan-Dec......Jan-Mar... Thailand Fiji Trin & Tob Ecuador Others Total Source: NFMS: GLOBEFISH AN sellers are demanding pricing in USD to minimize foreign exchange risks. Following the increase in the cost of raw material, prices for cooked loins increased in Europe. The IUU regulations have had an impact on the European market, further reducing the competitiveness of European canners. A good example to illustrate this is the Bangkok market. The EU s catch documentation regulation has created two different market prices in Bangkok for yellowfin 10 kg/up. Sellers able to provide properly endorsed catch documentation for fish caught by fishing boats with EU sanitary numbers and IUU certificates were able to sell yellowfin 10 kg/up for USD 350/tonne higher than the same fish without a valid catch certificate and an EU sanitary number. Some Thai canners are not even giving quotes on enquiries from European buyers, as fish having both a valid catch certificate and an EU health certificate are in very short supply. Canned tuna: France...Jan-Dec......Jan-Mar... Spain C. d Ivoire Seychelles Madagascar Senegal Italy Others Total Source: GLOBEFISH AN French canned tuna imports declined in the first quarter of the year. This was mainly because of a 50% drop in shipments from Côte d Ivoire. This country is normally the top supplier to the French market, but this year is only the number two supplier. Some Ivorian plants closed temporarily in 2010, as a result of limited and expensive raw material supply. Canned tuna: Germany...Jan-Dec......Jan-Mar... Philippines Ecuador Papua NG Indonesia Seychelles Thailand France Others Total Source: GLOBEFISH 10 Globefish Highlights July 2010

13 TUNA Canned tuna: UK...Jan-Dec......Jan-Mar... Mauritius Ghana Philippines Thailand Seychelles Ecuador France Maldives Indonesia Others Total Source: GLOBEFISH AN known whether the consumer will accept this price hike or not, as the economic recovery is not guaranteed. However, even today demand for canned tuna is higher than the amount that is available, so tuna prices are still likely to have some room for increase. It is likely that the present high prices, if they persist, could largely affect canned tuna consumption around the globe. Already, canned tuna prices are higher than in 2009, though not yet back to the record 2008 Tuna loins: Italy...Jan-Dec......Jan-Mar... Thailand Ecuador Colombia Kenya German canned tuna traders, always very attentive to the price situation, expanded their imports in the first quarter of 2010, when prices were still quite low. It is interesting to watch the strong performance of Papua New Guinea in this market. Total German imports of canned tuna from this country in the first three months of 2010 were tonnes, a 66% increase over the same period of There is considerable unease among EU canners at the decision to grant zero duty to canned tuna from PNG, even if the raw material suppliers are not from EU or ACP countries. However, this decision has resulted in heavy investment in new canneries in the island state, mainly with Filipino capital. Further price increases likely High raw material costs have already resulted in higher canned tuna prices on the market, but it is not Canned tuna: Italy...Jan-Dec......Jan-Mar... Others Total Source: GLOBEFISH AN level. Further increase in raw material prices will result in additional price hikes for canned tuna products, and the market seems to be unwilling to accept this. There are many substitute products available at relatively competitive prices. One way to alleviate this situation is to develop and introduce new value-added products, where expensive tuna is mixed with other raw material of lower cost. Alternatively, higher value products, such as tuna fillets in glass jars could be promoted. These usually sell at three times the price of normal canned tuna. Coldstorage holdings Tuna: Japan tonnes Others Spain Colombia Seychelles Skipjack Cote d Ivoire Portugal France Others Total Source: GLOBEFISH 40 Albacore Bigeye 20 Yellowfin Source: INFOFISH Trade News, GLOBEFISH AN Globefish Highlights July

14 TUNA Tuna loins: Spain...Jan-Dec......Jan-Mar... Ecuador C&F prices Canned tuna*: USA, EUROPE USD/carton Europe Thailand El Salvador Guatemala Portugal Colombia Others USA Total Source: GLOBEFISH 0 Jun-04 Jun-05 Jun-06 Jun-07 Jun-08 Jun-09 Jun-10 * 48x6.5 oz Europe, 48x6 oz USA, chunk, origin Thailand Source: GLOBEFISH AN 11101, TUNA NEWS SPAIN: MORE INSPECTIONS, MONITORING FOR BLUEFIN TUNA The Ministry of Environment, Rural and Marine Affairs (MARM) put at the disposal of the Community Fisheries Control Agency a large number of inspection and monitoring resources for 2010 s bluefin tuna season. Within the framework of the EU s Tuna Joint Deployment Plan for the recovery of bluefin tuna in the Eastern Atlantic and the Mediterranean Sea, and following the stipulations of the International Commission for the Conservation of Atlantic Tunas (ICCAT), Spain will furnish fishing inspectors, inspection aid and observers. The legislation in force sets forth the monitoring and inspection of 100% of the bluefin tuna landings in Spanish ports authorised for such activity. In order to fulfil this objective, 68 days of monitoring in Spanish territorial waters, 28 days of aerial surveillance and 17 inland campaigns will be carried out in The agreement implies that all Community countries will have to supervise and obligatorily certify all the steps of the productive chain of the resource, that is, from catch and placement in cages to landing or commercialisation. According to the new agreement, the corresponding authorities will have to issue an accreditation of bluefin tuna transfers, to prevent illegal practises and confusion in overseas shipments. Source: fis.com Tuna Production By Species C&F prices Loins: Italy EUR/kg 0.00 May-03 May-04 May-05 May-06 May-07 May-08 May-09 May-10 Source: GLOBEFISH AN C&F prices Frozen Yellowfin, Italy 2.30 euro/kg Yellowfin Skipjack Pacific bluefin tuna 0% Others 14% 2.00 Atlantic bluefin tuna 1% 1.70 Albacore 4% Bigeye tuna 8% Skipjack tuna 50% Yellowfin tuna 23% 0.80 Jul-03 Jul-04 Jul-05 Jul-06 Jul-07 Jul-08 Jul-09 Jul-10 Source: FAO Source: EPR 12 Globefish Highlights July 2010

15 GROUNDFISH Groundfish species face strong competition During all of 2009 and early 2010, groundfish prices declined as a result of good supply and strong competition from other whitefish species, such as pangasius. Supply was very good for Alaska pollock from Russia, but also for cod from the Barents Sea, a noteworthy return for a well managed species. In 2010, the new EU regulations attempting to curb IUU fishing created some supply difficulties for the groundfish market as not all the main supplying countries were immediately able to comply with the new regulations. Russia was one of these but has now been able to supply the EU with the list of competent authorities for IUU catch certification and is therefore once again able to export to the EU without delays. China also had some problems, as processors were not aware of the documentation necessary to comply with the new EU regulation. In fact, reprocessors also need to provide evidence of the legitimacy of the original catch. Argentine and Chilean groundfish products were on offer at very low prices in the first months of 2010 and these were in competition with Alaska pollock coming from China. The South American countries were well prepared to comply with the new EU regulation and managed to provide all the necessary paper work well in time for the end of December 2009 deadline. Pangasius replacing cod in UK In the UK, the main groundfish market in Europe, the increased supply of pangasius from Viet Nam has had a marked effect on the market. Demand for this species grew in 2009 in spite of the adverse economic situation, and imports of frozen pangasius fillets by the UK market Frozen cod: UK...Jan-Dec......Jan-Mar... ( tonnes) Iceland China Norway Denmark Russian Fed Germany Faroe Is Poland Others Total Source: Seafish/national trade statistics Globefish Highlights July 2010 C&F prices Groundfish blocks: USA USD/lb 0.5 Jun-02 Jun-03 Jun-04 Jun-05 Jun-06 Jun-07 Jun-08 Jun-09 Jun-10 Source: GLOBEFISH AN , , rose by 60%, even though the quantity is still quite limited. Increasing quantities of pangasius are used in traditional fish and chips restaurants, as this fish is available at very competitive prices and works well in the frying process. In contrast, sales of cod in the UK fell by 17% over the past year and plaice by 13%. However, sales of haddock have increased by 2%. At present price is the main factor in groundfish sales in the UK market. Russia is currently the main provider of Alaska pollock to the European market. This country reported abundant groundfish catches in the first half of the year. In fact in the first five months of 2010, Russia caught 1 million tonnes of Alaska pollock, a 25% increase compared with the same period of McDonald s Europe is using haddock to replace Alaska pollock as one of the key raw materials for its Filet-0- Fish. With the 18.5% cut in the US Alaska pollock quota to tonnes at the start of this year, McDonald s made a decision to reduce the quantities of pollock used in Europe because of the species importance to its US operation, as a part of their sustainable sourcing policy. As far as surimi is concerned, production is slow with a limited supply of raw material supply and with the USD-EUR exchange rate in favour of the dollar. This situation has resulted in a grim market situation for frozen products, although prices are stable, despite the low supply rate to the market. On the one hand Russia is Cod Alaska pollack Hake 13

16 GROUNDFISH able to export to the EU again, but on the other demand for groundfish in Europe is very low at the moment (it has been declining since the beginning of the year), and supply is more than sufficient. This situation will probably lead to decreasing prices. Cod-like groundfish: USA...Jan-Dec......Jan-Mar... ( tonnes) Fillets China Iceland Canada Norway Others Total Blocks/Slabs China Russian F Argentina Iceland Norway Canada Others Total Gr. Total Source: NMFS Frozen Alaska pollock fillets: Germany...Jan-Dec......Jan-Mar... ( tonnes) China USA Russian.F Others Total Source: Statistisches Bundesamt Frozen cod fillets: Germany...Jan-Dec......Jan-Mar... ( tonnes) Poland China Denmark Russia Iceland Norway Others Total Source: Statistisches Bundesamt In February, the earthquake in Chile and the strength of the US dollar affected seafood purchases in Europe. Lower quantities of hake from Chile were available, while other Latin American countries are rerouting supplies to the US market. This resulted in higher prices in Europe. However, as mentioned earlier, demand is now very slow and consumption in Europe has been declining since the beginning of the year. The producers of value added groundfish products in Germany and the UK are focusing on Alaska pollock supply. Taking an overall look at the groundfish market, the USA shows stable imports for cod, and Alaska pollock prices tending downwards while hake fillets are moving upwards. An overview of the EU market shows Alaska pollock imports and prices declining while cod and hake imports are increasing. Earlier in the year cod prices declined and hake remained stable but both picked up in June. Frozen hake fillets: Germany...Jan-Dec......Jan-Mar... ( tonnes) USA Peru Argentina Chile Russian Fed Others Total Source: Statistisches Bundesamt 14 Globefish Highlights July 2010

17 GROUNDFISH Demand will continue to be depressed Summer months are generally not a good sales period for groundfish species in Europe, thus the overall downward trend in prices is unlikely to improve. Much the same is true for the US market. Only in September/ October will some changes to the present slow market situation be seen. Generally winter months are more positive for groundfish demand. Groundfish catches are expected to increase on a worldwide level, as a result of good resource recoveries in many fishing areas. Groundfish Production By Species Whiting 17% Source: FAO Others 16% Cod 14% Frozen hake: Italy Saithe 5% Haddock 4% Hake 13% Alaska 31%...Jan-Dec......Jan-Mar... ( tonnes) Argentina S. Africa Spain Uruguay Namibia Peru Chile Others Total Source: National Trade Statistics Frozen Alaska pollock fillets: France...Jan-Dec......Jan-Mar... ( tonnes) China Russian Fed USA Germany Others Total Source: National Trade Statistics GROUNDFISH NEWS UK: NORTH SEA COD SUSTAINABLE AGAIN SAYS WWF AS STOCKS REBOUND North Sea cod, once on the brink as a result of decades of overfishing, has now recovered to an extent that the public should start eating it again with enthusiasm, one of the world s biggest wildlife charities has said. In a rare wildlife conservation success story, the charity WWF said the fish renowned for its flaky white chunks was being caught sustainably in the shallow, cold waters off the coast of northern and eastern Britain for the first time in a decade. Stocks of the fish have risen by 52% from their historic low four years ago because of a combination of cuts in landing quotas and conservation techniques that have reduced the number tossed back dead into the sea. As a result, the EU has increased the British quota for North Sea cod by 16% in 2010, from tonnes to Although stocks are still low by historic standards, the recovery could prompt British supermarkets to start stocking North Sea cod again. Most cod in grocery chains and fish and chip shops at present comes from Iceland and the Barents Sea. Marine scientists said the recovery was evident and welcome, but cautioned the fish was present at only a fraction of its natural level. In a study published in the journal Nature earlier in May, a team from York University estimated that, in 1889, Britain s fishing fleet was landing twice as much fish as today. Stocks of cod fished by English and Welsh boats have declined by 86% in the past 100 years. North Sea cod has risen from tonnes in 2007 to tonnes this year. The International Council for the Exploration of the Sea, which advises the EU, estimates the amount required for a recovery is between and tonnes. Source: THE INDEPENDENT RUSSIA RAMPS UP US POLLOCK FILLET EXPORTS Russian companies say they expect increased sales of pollock fillets to the USA in 2010, following a fourfold increase in Sales of Russian pollock fillets to the US increased 330%, from tonnes in 2008 to tonnes last year. For the first quarter, sales of frozen fillets went up 66%, from tonnes to tonnes. In 2009, the supply of Alaska pollock fillets from Russia to the United States rose sharply. Supply to the US market increased by 4.3 times, to tonnes, said German Zverev, president of the Russian Pollock Catchers Association (RPCA). This year, we are expecting that export of Russian pollock fillets to the US market will grow more, he told IntraFish. The Russian pollock fleet produced less fillets during the 2010 A season, which started 1 January and ended in March, he said. The producers had to limit fillet output because of the EU ban on Russian fishery product imports during the first two months of the year, said Zverev. The total amount of pollock fillets produced for the A season was tonnes. While fillet production is down, the companies produced tonnes more headed-and-gutted (HEG) pollock, up 45% on the same period of Prices dipped, but will rise again, said Zverev. Source: INTRAFISH Globefish Highlights July

18 CEPHALOPODS Better demand in cephalopod market is thwarted by low supply The economic crisis, which impacted the world cephalopod market in 2009, seems to be declining and demand for cephalopods is going up. However, traders are still quite cautious, and are trying to buy smaller specimens at discounted prices. Overall cephalopods are selling at higher prices this year than in 2009, and further price increases are likely. For both squid and octopus this is caused by very limited supply, in an overall climate of better demand. Disaster in Argentina Illex fisheries As already reported, the 2010 squid season in Argentine waters has been a disaster. In the first half of the year, some tonnes of Illex argentinus were landed on the Argentina mainland, representing a fall of 47% compared with the same period of However, the previous season had also been a difficult one. A similar situation occurred in the Falklands/Malvinas where the catch was only tonnes, the fourth lowest catch of squid since the beginning of the island s fishery in This is comparable with the circumstances in 2002 when the abundance of the South Patagonian Illex stock was low and migration to the southern parts of the ocean was limited by low water temperatures. Exports Argentina: Squid Jan-Dec Jan-Mar (1000 tonnes) Spain China Brazil Japan Italy Korea, Rep Others Total Source: Redes Wholesale prices Cuttlefish, squid: Japan US$/kg Squid ** Cuttlefish * 0.0 Jun-03 Jun-04 Jun-05 Jun-06 Jun-07 Jun-08 Jun-09 Jun-10 * whole 10 kg/block, kg/pc; ** whole 7.5 kg/block, pc/kg; Source: INFOFISH Trade News, GLOBEFISH AN 10501, 09 In the past, Illex stocks were monitored during their migrations in Argentinean and Falkland waters by the bilateral Argentine-UK South Atlantic Fisheries Commission (SAFC). Unfortunately, the SAFC has been largely dormant in recent years, which has increased the vulnerability of Illex squid stocks as no estimates of spawning stock biomass have been made. If this fell below tonnes, the early closure of the fishery would be recommended. After two years of poor catches, there are some signs of hope for Larger sizes of squid observed in 2010 could result in a higher spawning biomass that could result in a partial recovery of the South Patagonian stock next year. Low catches in the South West Atlantic are impacting the world squid market and Illex prices are now well above EUR 2 000/tonne. South African catches of squid have fallen to low levels, which is normal in this period of the year. Despite this drop in catches, the price of South African Loligo vulgaris has only risen marginally. The Spanish and Italian markets are unwilling to pay more, and are trading down to smaller sizes and squid from cheaper suppliers. The buying interest for products from low price suppliers has become apparent in Spanish squid imports. China has become the main supplier of squid to this market, by tripling its exports to tonnes. Similarly, Indian squid exports to the Spanish market have doubled 16 Globefish Highlights July 2010

19 CEPHALOPODS Squid: Japan...Jan-Dec......Jan-Mar... China Thailand USA Viet Nam India Korea Rep Peru Morocco Argentina N. Zealand Taiwan PC Others Total Source: GLOBEFISH AN 10437, *) included under others Squid: Spain...Jan-Dec......Jan-Mar... China India Argentina Falkland/ Malv Morocco Peru S. Africa USA Korea Rep N. Zealand Others Total Source: GLOBEFISH AN to reach tonnes. In contrast, the higher price squid exporters reported sharp declines, particularly for squid coming from the South West Atlantic. Even if catches improve in 2011, it will be difficult for Argentina to recover its former top position. The only alternative would be to accept deeply discounted prices. The same trend, though less pronounced, is true for Italy and Japan. Squid: Italy...Jan-Dec......Jan-Mar... Spain Thailand India S. Africa Peru Argentina N. Zealand Others Total Source: GLOBEFISH AN Squid: USA...Jan-Dec......Jan-Mar... China Korea Rep Taiwan PC Thailand India Peru N. Zealand Others Total Source: GLOBEFISH AN Low octopus catches in Mauritania and Morocco Mauritania reported very limited octopus catches prior to the seasonal ban from April to June Fleet operators did not expect much improvement after the opening of the season for the artisanal fleet on 16 June; however, catches were above expectations. In July 2010, the industrial fleet will also become operational, and then price negotiations will become interesting. The Moroccan authorities also lifted their fishing ban, ten days earlier than last year. The total fishing period will thus be longer than last year but the fishing Globefish Highlights July

20 CEPHALOPODS Octopus: Japan...Jan-Dec......Jan-Mar... Mauritanian waters. Unfortunately, the biomass of octopus does not seem to have improved, in spite of the drastic restrictions on catches. Mauritania Wholesale prices Octopus: Japan Morocco China USD/kg Viet Nam Spain Thailand Others Total kg/pc kg/pc Source: GLOBEFISH AN season will end on 30 August as in the past. The fishing quota is lower than in 2009: tonnes is for freezing vessels, down from tonnes in 2009, factory vessels will receive 20% less (1 100 tonnes), and artisanal fishermen will be allowed tonnes, down from tonnes in The volume allocated to each vessel is also very low. Fishing in the opening months of the year had been quite good, leading to higher octopus exports from Morocco. Octopus: Italy...Jan-Dec......Jan-Mar... Morocco Spain Viet Nam Jun-04 Jun-05 Jun-06 Jun-07 Jun-08 Jun-09 Jun-10 Source: INFOFISH Trade News, GLOBEFISH AN Mauritanian exports of octopus declined in 2010, from heavy sales in This country is now limiting supply, with the hope not only of protecting the resource, but also of increasing the value. The opening months of the year are not a good period for Japanese octopus consumption, generally highest during festive seasons. were low, at tonnes, one of the lowest in recent history. Mauritanian exports declined sharply because of limited fishing. Morocco, on the contrary, managed to sell more octopus to the Japanese market. Spain imports mainly from Morocco. The country managed to increase its imports in the first three months of 2010, in line with the higher production in Morocco. Spanish octopus imports from Mauritania declined sharply, reflecting the low catch rates in Mauritanian waters. Indonesia Mauritania Mexico Tunisia Senegal Thailand Others Total Source: GLOBEFISH AN Octopus: Spain...Jan-Dec......Jan-Mar... Morocco Mauritania China Viet Nam This reduction in catch quota will result in higher prices of octopus, up from levels reached in The trend of octopus prices has been upward for several years now, reflecting the limited availability on the market, a result of strict management efforts in Moroccan and Portugal Senegal Others Total Source: GLOBEFISH AN Globefish Highlights July 2010

21 CEPHALOPODS Italian octopus imports declined in the first quarter of the year. Again demand was very weak, and higher prices were met with consumer resistance. Lower quantities of octopus were imported from Morocco and Mauritania. Further declines in octopus imports into Italy are likely. Cephalopods producion by Species Octopus 8% Cuttlefish 7% Source: FAO Cuttlefish: Spain Cephalopods nei 8% Squid 77%...Jan-Dec......Jan-Mar... India Morocco China Mauritania Ghana France Others Total Source: GLOBEFISH AN Monthly prices Octopus whole frozen: Spain origin Morocco Jan-05 /kg Jul-05 T2 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 T8 Jan-09 Jul-09 Jan-10 Cuttlefish: Japan...Jan-Dec......Jan-Mar... Thailand Viet Nam Morocco Malaysia Korea Rep China Ghana Mauritania Others Total Source: GLOBEFISH AN Cuttlefish: Italy...Jan-Dec......Jan-Mar... Tunisia France Spain Senegal Morocco India Viet Nam China Thailand Others Total Source: GLOBEFISH AN High squid prices likely to continue Squid prices are expected to stay at the present high levels. The preference of traders is for smaller sizes and diversification in the exporters mix. The hope is for a better supply of Illex from the South West Atlantic in the 2011 season, which might normalise the world squid market. The outlook for octopus points towards lower supply, especially from Morocco. As demand is expected to pick up in the summer months, higher prices are likely in all major markets. European traders will have difficulty in competing with Japanese traders because of the weaker EUR. Globefish Highlights July

22 TILAPIA Smaller quantities of tilapia in the market Supply of tilapia from China, the world s main producing country will be down by 20% in This decline was primarily caused by the extremely cold winter in early 2010 in China, wiping out whole production areas. In addition, the production will enter the market two months later, as growing out was much slower in the early months of the year. The spring chill in early 2010 lowered the survival rate of tilapia fry, which was only 50% in some areas with a few even dropping to zero, causing a delay in time for tilapia to reach market size. In addition, low prices in 2009 caused by the economic crisis brought losses to some farmers and eroded their confidence in tilapia farming. To avoid future risk, many farmers reduced pond storage in late 2009, by lowering stocking density or moving to mixed-culture with other species. Traditional species such as snakehead or mandarin fish have more stable prices and better survival rates. Less tilapia in US market The US tilapia market will be overshadowed by the production problems experienced by China in coming months. For the time being, however, the market is still well supplied with the Chinese tilapia production from In fact, total imports of tilapia into the USA during the first three months of the year were tonnes, some tonnes more than in the same period of The main product in the market was frozen fillets. Chinese exports of tilapia to the US market in the first three months of the year reached tonnes, TILAPIA NEWS USA: TILAPIA PRODUCER BOOSTS PROFIT 27% Net income for the first quarter 2010 at HQ Sustainable Maritime Industries (HQS) was USD 1.5 million, up 26.7% from USD 1.1 million in the year-earlier period. Net income during the first quarter was positively impacted by the net recovery in doubtful accounts of approximately USD and a decrease in marketing and advertising expenses of approximately USD from the health and bio-product segment, the company said. Gross profit for the quarter decreased 2.2%, to USD 4.4 million, down from USD 4.5 million last year. Gross profit margin decreased to 30.5%, versus 41.5% in the first quarter of 2009, said Seattle-based HQS. Sales increased 25% to USD 14.4 million, up from USD 10.8 million, and was was primarily the result of strength across each segment including aquaculture products, health and bio-products, as well as the new feed products added in late 2009, the company said. Aquaculture product segment sales increased 5.2% to USD 7.7 million, compared with USD 7.3 million in the first quarter of The aquaculture product segment sales increase is primarily related to an increase in volume and the price of processed ocean-caught fish, the company said. Aquaculture product segment sales were partially offset by fluctuations in the market price of tilapia fillets, resulting in a 16.2% decrease in the average selling price of tilapia in the first quarter of Source: INTRAFISH Fresh Tilapia Fillets: USA...Jan-Dec......Jan-Mar... Ecuador Costa Rica Honduras El Salvador China Taiwan PC Brazil Panama Others Total Whole Frozen Tilapia: USA...Jan-Dec......Jan-Mar... China Taiwan PC Thailand Ecuador Hong Kong Panama Indonesia Others Total Source: GLOBEFISH, *) included under others some 19% more than in the same period of last year, while other producers such as Indonesia and Thailand reported lower exports to the US market. Total US imports of frozen tilapia fillets increased by 18% during the first three months of 2010 when compared with China was responsible for this entire increase, dominating this market segment. Its share in the US 20 Globefish Highlights July 2010

23 TILAPIA Frozen Tilapia Fillets: USA...Jan-Dec... Wholesale price Tilapia fillets: USA *) origin South America; **) origin China Source: Oil World, GLOBEFISH AN 11702, Jan-Mar... China Indonesia Taiwan PC Thailand Ecuador Viet Nam Panama Brazil Others Total Source: GLOBEFISH US$/lb fresh* frozen** 1.0 Jun-03 Jun-04 Jun-05 Jun-06 Jun-07 Jun-08 Jun-09 Jun-10 In the first three months of 2010 fresh tilapia fillet imports into the USA reached tonnes, a slight increase over the corresponding period of Ecuador is the main supplier to this market segment, with Costa Rica and Honduras as second and third. Fresh tilapia fillet prices were very low in the opening months of 2010, but have increased since then. At present they are back to the mid 2009 levels, and are likely to increase further in coming months, as the shortage of Chinese tilapia will also impact Latin American tilapia production. The EU is at last identifying tilapia in their import statistics. of frozen tilapia fillets were tonnes in the first quarter of 2010, with China supplying tonnes and Indonesia 500 tonnes. Comparison with 2009 is not possible as prior to this year all freshwater fillets were grouped in the same category. However, as Chinese frozen freshwater fillets exports to the EU in the first quarter of 2009 were tonnes, a substantial increase of at least tonnes must have been received for the present year. However, compared with the US market, the EU market is still in its infancy. The main countries importing tilapia fillets in the EU are Poland and Germany. Production in China down in 2010 Chinese tilapia production is forecast to be substantially lower in 2010, but some recovery is forecast for Price trends are thus relatively easy to forecast for this year, with price increases of some 20% likely towards the end of the year. It is also forecast that exports to the USA will decline strongly in the course of On the other hand, the EU will expand their tilapia imports, and might reach tonnes by the end of the year, still relatively small when compared with pangasius imports. Unit value Tilapia exports: China frozen tilapia fillet market increased from 87% to 90%. Indonesia is a distant second for this product form. Frozen whole tilapia exports to the US market have contracted further. This product is not very attractive to the market, as filleting provides a far more appropriate product for the processing sector in the USA USD/Kg Fresh tilapia fillets are in a different market segment altogether. Their price is almost double that of frozen fillets. Fresh tilapia is aimed at the restaurant trade, while frozen tilapia fillets are processed before entering the retail trade at the lower end of the price scale. Latin American countries dominate this market, taking advantage of their relative proximity to the US market, which reduces shipment costs other tilapia Average 0.5 frozen whole Source: elaborated from National Trade Statistics Globefish Highlights July

24 PANGASIUS Pangasius is an important commodity in world trade From almost nothing some five years ago, total pangasius production in Viet Nam is estimated to be 1.5 million tonnes in Most of this production enters the market as frozen fillets. This species has thus created substantial employment in the Vietnamese processing industry. However, on occasion this species has come under investigation and its sanitary and environmental qualities have been questioned. Up to the present time investigations initiated by the main importing countries have proved negative, showing that pangasius products fulfil all export/import requirements with regard to safety. Pangasius can be accepted as a good source of protein by consumers. Russia back in the game Vietnamese exports of pangasius to Russia earned over USD 27 million in the first six months in 2010, over twice the amount compared with the same period in This is in contrast to the situation early last year when the Russian market was completely closed to Vietnamese pangasius. However, the price of tra and basa fish to this market still stands at around USD 2.05/kg, which is very low compared with other markets. Once summer has ended consumption is likely to rise and, by the end of the year, Viet Nam s pangasius exports to this market will have earned the country almost USD 100 million. Mexico is also a significant importer of Vietnamese fish and seafood. In 2009, while most of the key importing countries saw reductions, exports to Mexico expanded. The value of pangasius imports in 2009 reached USD 72 million, making the country the fourth largest importing country, representing 5% of total exports. This positive trend also continued in the first three months of The local fishermen are very much concerned with the impact of continually expanding imports on their own local production and sales. Locally produced fish is about 20% more expensive than the imported pangasius. Viet Nam is very successful in Mexico because of good market promotions. Potential products are presented to buyers, who can taste the products before the purchase. The Vietnamese traders thus establish confidence and credibility in the market. The amount of glaze on seafood products is an issue that is causing some concern with regard to pangasius Pangasius exports from Viet Nam - in quantity terms Russia 7% Ukraine 7% Asean 7% China & HK 3% USA 7% Mexico 5% Egypt 4% Others Altro 31% Others 22% EU 38% 22 Globefish Highlights July 2010

25 PANGASIUS Exports Pangasius: Viet Nam...Jan-Dec......Jan-Mar (1000 tonnes) EU Russia * Ukraine na Asean China & HK USA Mexico Egypt na na na Monthly prices Pangasius: Spain EUR/Kg skinless, boneless 1.5 Jun-07 Dec-07 Jun-08 Dec-08 Jun-09 Dec-09 Jun-10 IQF Others Total Source: Vietfish, 8) estimate products. Brazil has taken action by setting the upper limit of glazing at 20%. Pangasius is in strong competition with domestically produced tilapia and Brazil aims to reduce imports of glazed pangasius by the country. The EU continues to be the main market for pangasius. Total imports in the first quarter of 2010 were tonnes, a 10% increase over The economic situation in Spain and Germany has had the effect of lowering demand and thus imports of pangasius in the first months of Nevertheless these two countries continue to be the main markets for pangasius in the EU. Poland returned as an important market for Vietnamese pangasius with tonnes in the first three months of the year. This market had been extremely strong in 2008, with a per capita consumption of 2 kg per year, probably Frozen Catfish: USA Jan-Mar Viet Nam China Thailand the highest in the world. However, for various reasons, including the ban by Russia on the import of pangasius at the beginning of 2009, the Polish market was disrupted as well. Viet Nam is now also dominating the US market for catfish and pangasius. Total imports of these species in fillet form reached tonnes in the first three months of the year, a 30% increase. Vietnamese pangasius accounts for about 60% of this segment, while China makes up for most of the remainder. Exports from Thailand to the US market have fallen, as the country seems to have found other outlets, including the domestic market as well as the Malaysian market. Positive outlook for the future Vietnamese pangasius producers are also concerned with environmental aspects and have involved Friend of the Sea in the certification process. WWF is also working with Vietnamese pangasius producers on sustainable aquaculture processes. Vietnamese exports of pangasius are again hoping for a bumper year. The price level that Viet Nam is able to maintain at about USD 2.00/kg for exported fillets cannot be beaten. In view of the increasing demand for good protein from fish, the country has a very positive future, especially in supplying developing countries with an expanding middle class. This class of consumers is most likely to prefer pangasius to other protein products. New value-added pangasius products will ensure a positive outlook for the future of this species in the world market. Malaysia Indonesia Others Total Source: GLOBEFISH Globefish Highlights July

26 EUROPEAN SEABASS AND GILTHEAD SEABREAM Weaker bream prices as demand is slacking Demand in the large European cities is declining as schools close for the holidays and consumers start spending more time out-of-town. The seasonal contraction in demand is putting downward pressure on bream prices for which supplies are ample, also helped by new generation fish reaching market size. In contrast, bass prices are slightly up, but remain somewhat lower than for bream, a rather unusual phenomenon. In this respect, the large volumes of small-size fish around 300 grams now reaching the Italian market from Greece, is certainly a signal of caution as the lower yields will severely hurt producers margins. The outlook for demand is mixed with softening of consumption expected over the summer period. Supplies will increase in the next couple of months and, although domestic demand is increasing in Greece and Turkey helped by tourism, the overall increase in net supply will lead prices to weaken over the next few months. Seabass and Seabream - In Italy, origin: Greece EUR/kg Jul-06 Nov-06 Mar-07 Jul-07 Nov-07 Prices and Markets Mar-08 Seabass fresh whole gr/pc Seabream fresh whole gr/pc In general, the market situation in Europe is mixed. Italy, the largest consuming and importing country, reported 10% higher import volumes in the first quarter of 2010 with values up 16%. Spain on the other hand, saw a sharp drop in imports with volumes down 17% and values declining by 13%. UK, albeit a small market for the two species, was also down in the first quarter with combined volumes falling by 12%. Jul-08 Nov-08 Mar-09 Jul-09 Nov-09 Mar Jul-10 Production Seabass (Dicentrarchus labrax): World * 2010* Greece Turkey Italy France Spain Egypt Croatia Portugal Tunisia Others Total Production Seabream (Sparus aurata): World * 2010* The French market was basically flat in the first quarter with imports unchanged from last year. Values were slightly up reflecting the somewhat higher prices this year. Production Greece Turkey Spain Italy Egypt Israel Portugal Most producing countries expect lower production Croatia volumes in 2010 and possibly also in This includes France both the largest suppliers, Greece and Turkey, but also Others Spain as well. The result should be a tighter market over the coming months, especially from September onwards Total Source: FAO/AQUAMEDIA (for ), (*) Provisional 24 Globefish Highlights July 2010

27 EUROPEAN SEABASS AND GILTHEAD SEABREAM when demand is back to normal after the summer months. The reduction in volumes will be made more severe by the large volumes of small fish now being brought to market. Prices should therefore strengthen during the autumn months possibly until the summer of Fresh Seabream and Seabass: Italy (value)...jan-dec......jan-mar... (million Euro) Seabream (dentex/pagellus) Greece Total Seabream (gilthead) Greece Turkey Seabream and Seabass: Spain (value)...jan-dec......jan-mar... (million Euro) Seabream (all species) France Greece Morocco Total Seabass France Greece Morocco Turkey Total Gr. Total Source: Spanish national statistics Total Seabass Greece Turkey Total Gr.Total Source: ISTAT Fresh Seabream and Seabass: Italy (quantity)...jan-dec......jan-mar... ( 1000 tonnes) Seabream (dentex/pagellus) Greece Total Seabream (gilthead) Greece Turkey Total Seabass Greece Turkey Total Gr.Total Source: ISTAT Globefish Highlights July 2010 Seabream and Seabass: Spain (quantity)...jan-dec......jan-mar... ( 1000 tonnes) Seabream (all species) France Greece Morocco Total Seabass France Greece Morocco Turkey Total Gr. Total Source: Spanish national statistics Russia: a growing market One of the most promising and upcoming markets for bass and bream is Russia. According to La Maree, a leading Moscow based importer of fresh fish and fishery products, while only a few years ago the species were regarded as exotic, they are now seen as a commodity 25

28 EUROPEAN SEABASS AND GILTHEAD SEABREAM Seabream and Seabass: France (value)...jan-dec......jan-mar... (million Euro) Seabream (dentex/pagellus) Greece Total Seabream (gilthead) Greece Spain Total Seabass Greece UK Total Gr. Total Source: French national statistics fish species. There are several reasons for this change in attitudes. The most important is improved logistics and distribution. In the past, fresh seabass and seabream were delivered to Russia only by plane. Beginning about a year and a half ago, the species are now transported by truck. In this way, transport costs have decreased significantly by about 1 EUR per kg, making seabass and seabream more attractive for Russian consumers. Secondly, as a result of the difficulties facing many companies in Turkey and Greece, Russian importers source seabass and seabream at very attractive prices. In Moscow at the moment, fresh seabass and seabream costs less then local freshwater trout from Karelia. La Maree reports that whereas 18 months ago, the company imported weekly about 15 tonnes of seabass and seabream, today s volumes are a minimum of 70 tonnes per week. The third factor is the diversification of supply. At the beginning, Cyprus and Greece were the main suppliers but today large volumes of seabass and seabream arrive from Turkey, Spain and Italy in addition to Greece and Cyprus. It is also interesting to note that the economic crisis in Russia has not had any impact on seabass and seabream sales in general. In the past it was an exotic product for the well-off, but now it has become affordable to almost all consumers. Seabream and Seabass: France (quantity)...jan-dec......jan-mar... ( 1000 tonnes) Seabream (dentex/pagellus) Greece Total Seabream (gilthead) Greece Spain Total Seabass Greece UK Total Gr. Total Source: French national statistics Seabream: UK SEABASS AND SEABREAM NEWS Seabass: UK Greece Greece Netherlands Netherlands France Italy Italy France Morocco Ireland Others Others Total Total FIRST TUNISIAN SEABREAM AND SEA BASS AQUACULTURE CER- TIFIED SUSTAINABLE. FRIEND OF THE SEA STRENGTHENS ITS PRESENCE IN AFRICA. Friend of the Sea announces the certification of Sea-bass and Seabream from Aquaculture Tunisienne. Aquaculture Tunisienne is the first aquatic farm in Tunisia specialized in the reproduction, rearing and marketing of Sea bass (Dicenthrarchus-Labrax) and Sea bream (Sparus-auratus). It is located in the open bay of Hergla, leading from the Mediterranean Sea, an ideal environment for its activity. Aquaculture Tunisienne certified both ISO 9001/2000 and ISO 22000/2005, have scientists working closely with the Tunisian government to monitor all activities ensuring the preservation and respect of the stock and its pristine environment. During the 24-month growth cycle from hatching through final production, the fish are fed with Friend of the Sea certified fish feed; Le Gouessant Grower and Neo Supra. FCR levels are closely monitored to ensure that the fish are not over or under fed. Source: Friend of the Sea 26 Globefish Highlights July 2010

29 SALMON Tight supply is driving price increases The Atlantic salmon market continues to be undersupplied as Chile s production in 2010 is reaching rock bottom. As a result prices are at their highest levels for many years although sluggish demand over the summer should ease prices somewhat. Higher water temperatures will also boost growth levels with additional volumes coming to market over the next few months. Farmed salmon prices, therefore, are expected to ease over the next months. Norway is benefiting from tight supply Norway s export statistics for salmon in the first six months of 2010 show record exports at NOK 13.9 billion (+ 31%) and a more modest growth in volumes (16%) to tonnes (round weight equivalents). Most markets show growing import volumes of Norwegian salmon as the lack of Chilean product keeps supply limited with rising prices as a result. Most of Norway s export markets show volume growth, including the EU (+8%) which takes a total of 67% of Norway s exports. The US market in particular has been strong for Norway s exporters with an 80% volume growth during the first six months. Russia has also shown remarkable increases this year, of + 38%, as have most other Central and Eastern European markets. A few Production Farmed salmon: World * 2010* ATLANTIC SALMON Norway Chile UK Canada Faeroe Is Australia Ireland USA Others Total PACIFIC SALMON Japan Chile Canada New Zealand Total Gr. Total Source: GLOBEFISH AN * estimate Globefish Highlights July 2010 destinations saw a decline in import volumes even though the value of their imports was still up, given the higher prices in 2010 compared with These include the UK, Italy and Japan. Of note are the continuing positive trends in importing countries with strong reprocessing and export industries such as China, Viet Nam and Thailand. Markets generally strong despite consumer worries about economy EU: still growing The EU, the largest salmon market in the world is still showing increasing consumption. France in particular is demanding more salmon than ever with new volume growth registered in the first quarter of German imports were also up in the first quarter. Exports (value) Salmon and Trout: Norway Jan-Dec Jan-Mar (bill. NOK) Salmon Fresh Frozen Fresh fill Froz. fill Trout Source: Norwegian Seafood Export Council Exports (quantity) Salmon and Trout: Norway Jan-Dec Jan-Mar Salmon Fresh Frozen Fresh fill Froz. fill Trout Source: Norwegian Seafood Export Council 27

30 SALMON Salmon: France Jan-Dec Jan-Mar Fresh whole Norway UK Frozen Pac USA Frozen Atl Smoked UK Fresh fillets Norway Frozen fillets Chile China Grand Total Source National Statistics Salmon: Germany (by origin) Jan-Dec Jan-Mar Norway Poland Chile China Denmark Others Total Source: Statistisches Bundesamt Japan: a modest increase from last year Japan was traditionally the world s largest salmon import market but has been overtaken by both the EU and the US. Fish consumption in general is stagnant and salmon is no exception, although 2010 imports during the first quarter were slightly up from last year. Salmon: Japan Jan-Dec Jan-Mar Fresh Atlantic Norway UK Australia Pacific Total Frozen Atlantic Norway Pacific Canada USA N. Zealand Chile Russia Total Grand Total Source: Japanese national import statistics Salmon Production by Species Salmon: Germany (by product) Jan-Dec Jan-Mar Fresh salm Frozen salm Smoked salm Fresh fillets Frozen fillets Salted salm Total Source: Statistisches Bundesamt Coho(=Silver)salmo n 6% Sockeye(=Red)salm on 6% Pacific salmons nei 7% Pink(=Humpback)sa lmon 12% Source: FAO Chum(=Keta=Dog)s almon 5% Atlantic salmon 64% 28 Globefish Highlights July 2010

31 SALMON SALMON - US MARKET Lower supplies and higher prices lead to a rare market undertone US Atlantic salmon imports in the first quarter of 2010 fell 9% in terms of volume, totaling tonnes. However, in terms of value imports showed a slight increase (+1%), reflecting the upward trend in prices. The drop in purchases of Atlantic salmon is fully explained by the shortage in supply from Chile, which fell by 70% in terms of volume. Chile fell from the top position as supplier of Atlantic salmon to the US market in the first quarter of 2009 to third place in the same period in The gap left by Chilean exporters resulting from the spread of ISA virus was seized upon by Norwegian producers, who saw sales jump by 181% in terms of volume, reaching the second position as main player in the salmon market. Canada is placed as the top supplier in the period reviewed with almost tonnes (a 45% share of total supply of Atlantic salmon, both wild and farmed). Norway accounts for 43% of total supply of fresh fillets of farmed Atlantic salmon, which in the first quarter of 2010 amounted tonnes worth USD 157 million. This market segment was previously clearly dominated by Chilean products, but with the drop in production from this country, Norwegian exports almost doubled. Nevertheless, the fresh fillets supply is still highly concentrated, with Norway and Chile accounting for 76% of total volumes. Norway, however, still has a small share in the fresh whole market, as the US Department of Commerce has maintained anti-dumping duties on fresh whole salmon from Norway since Recently, the DoC ruled that the company Nordic Group AS would be allowed to access the US market with a zero rate. This barrier may prevent some Norwegian companies from applying a strategy similar to the one used by Marine Harvest in Japan, where it opened a processing plant and imports whole fish for further filleting. As for the frozen fillets segment, it is worth noting that the drop in purchases from Chile led to China becoming the top exporter, followed by Norway, with a share of 37% and 36% each in the total supply of this product (6 540 tonnes). The lower supply from Chile has pushed prices higher and, although by late June they were at a lower lever than the peaks reached in May, the market remains unsettled, given that lower supplies are adequate for the level of demand. Overall prices showed a slight downward trend, although prices for some cuts were higher. A position may have been reached where consumers begin to react to higher prices by reducing their interest, which in turn means that, although total supply is lower, demand remains adequate. Reduced supply of wild salmon from Alaska As for domestic wild salmon, the market undertone is similar, with supplies adjusted to current demand. Prices for sockeye and king salmon showed a reduction by mid June but started recovering at the beginning of July. At the opening of the capture season in Alaska, forecasts were for a lower level of catches for king and pink salmon, while sockeye catches were expected to remain stable. Forecast captures in Alaska are Chinook, 45 million sockeye, 18 million chum salmon, 69 million pinks and 4 million coho salmon. Total production of salmon in Alaska for the spring season is forecast at about 137 million fish, while in 2009 it reached 163 million fish worth USD 370 million at docks. A trend that was reported by some operators in the Alaskan salmon industry is that more products are destined for the production of fresh and frozen fillets rather than the canning industry, as this market segment has become more profitable given the higher prices for these products. On another matter, the Marine Stewardship Council announced that it would begin the certification for some sections of the Canadian salmon fisheries in British Columbia. The MSC has already certified three fisheries, while it has announced that some others are not sustainable. The announcement has caught the attention of several NGOs as it is a signal for other fisheries to preserve resources, and it also implies participation of some organizations in the follow up of the recommendations of the MSC. Canada is the top supplier of fresh and frozen salmon (not Atlantic), while China has a leading position in supplies of non-specific products. Salmon: USA Jan-Dec Jan-Mar Fresh fillets Chile Canada Norway Other Total All salmon Source: GLOBEFISH AN Globefish Highlights July

32 SALMON Chilean production of salmon and trout fell in the first quarter Chilean harvests of salmon and trout fell by 67% in the first quarter of 2010, totaling tonnes. The reduction in harvests was registered in all species, although Atlantic salmon showed the most significant drop, -77% ( tonnes below that of the same period in 2009). In the period reviewed, Rainbow trout was the main species harvested, with tonnes (40% less than in 2009). Output of Coho salmon also fell by 75%, totaling tonnes between January and March The fall in overall supply of salmonids reflects the impact of ISA virus, not only on existing fish, but in the halt in stocking because of sanitary control measures and the restructuring of the productive legal framework, which resulted in the new Fisheries and Aquaculture Law. The sanitary situation seems to be under control, and at the beginning of June 2010, there were no production centers with ISA virus outbreaks. The stabilization of the disease has allowed companies to resume stocking. According to representatives of the Chilean Salmon Association (SalmonChile), in the first quarter of 2010 there was an increase of fish put into the sea over the same period in Although this is a positive sign, Exports (quantity) Salmon and Trout: Chile Jan-Dec Jan-Mar (1000 tonnes) Japan USA EU (25) Lat.America Others Total Source: Boletín de Exportaciones del IFOP Exports (value) Salmon and Trout: Chile Jan-Dec Jan-Mar (million USD) Japan USA EU (25) Lat.America Others Total Source: Boletín de Exportaciones del IFOP Exports (value) Salmon and Trout: Chile Jan-Dec Jan-Mar (million USD) Salmon Frozen Fresh Canned Salted Smoked Trout Frozen Fresh Canned Salted Smoked Total Source: Boletín de Exportaciones del IFOP Exports (unit value) Salmon and Trout: Chile Jan-Dec Jan-Mar (in USD/kg) Salmon Frozen Fresh Canned Salted Smoked Trout Frozen Fresh Canned Salted Smoked Average Source: Boletín de Exportaciones del IFOP it also indicates that a booming recovery should not be expected. While it is forecast that production bottoms out in 2010, expectations are that this marks a change in the trend and that a recovery will be seen in 2011, with outputs reaching a 70 % level compared with the situation prior to the ISA virus outbreak by Globefish Highlights July 2010

33 SALMON Exports (quantity) Salmon and Trout: Chile Jan-Dec Jan-Mar Salmon Frozen Fresh Canned Salted Smoked Trout Frozen Fresh Canned Salted Smoked Total Source: Boletín de Exportaciones del IFOP The crisis caused by the ISA virus reshaped Chilean salmon industry During 2009 the salmon sector renegotiated its debts (with liabilities of about USD million) with the financial systems, which allowed the industry to regain confidence. The positive outlook for salmon production has already caught the attention of investors. This is a positive sign when considering that estimations are that the industry will need about USD 600 million of working capital to regain production levels that approximate those prior to the outbreak of the ISA virus. Industry operators estimate that the needs for financing, considering working and investment capital, could reach USD million. Many players foresee that the Chilean salmon industry will go through a consolidation process, with several mergers and acquisitions, and the entrance of new players, seizing the opportunities given by the lower equity of firms. Another significant issue is that the reorganization of production under the new legal framework will require companies to coordinate actions, given that now the production and rest cycles will be organized by zones, with several firms producing in the same zone. Lower exports and consolidation of Latin America compared with the same period in However, the behavior among different markets was uneven in the period reviewed. Sales to the Japanese market in terms of volume fell by 27%, while exports to the US dropped 60% and to the EU were 72% lower. Sales to these markets were also lower in terms of value, but the reduction was of a smaller extent, given that average unit value of exports grew by 17%. In contrast, it is worth noting the performance of sales to Latin American countries. Although purchases from these countries fell by 15%, value of exports grew by 17%, reflecting a 41% increase in unit value. Brazil accounted for 74% of total exports to Latin American countries in terms of value, and is the leading country receiving Chilean exports of salmon and trout to Latin America. Atlantic salmon accounts for 84% of Brazilian imports. Chile has lost its leading position in the US in the Atlantic salmon fresh fillets segment, and currently Norway is the top supplier to the US market. The lack of supply from Chile has pushed up prices. By mid-june a downward trend was registered, although the price was still considerably higher than at the beginning of 2010 or the same period in On the contrary, Chile remains ahead in the Japanese market, owing to an increase in trout imports. The lack of supply has changed the trade patterns in the main markets. Norway has diverted production from other markets to the US to seize the gap offered by the drop in Chilean supplies. Marine Harvest has also opened a processing plant in Japan to provide this market (where Chile also had the leading place) with salmon fillets, repeating an experience that became successful in the US market. Chilean industry seems on track for recovery While 2010 will be a low point in Chilean salmon production, it is expected to mark the beginning of the recovery of the industry, with a new direction. The salmon sector will change its methods of operation and the constellation of firms is sure to change. However, another matter of concern is arising in international markets. The drop in supplies helped prices remain high despite the international crisis. But the appreciation of salmon has raised the concern about a potential weakening of salmon consumption, given that consumers might turn to cheaper products, especially in a negative economic environment. That is the case in Spain, where some operators have stated that consumers are shifting from salmon to pangasius as a result of increasing prices. In this context, the recovery of the Chilean industry would be a positive sign for the global salmon sector. Exports of salmon and trout fell significantly in the first quarter of Total sales to foreign markets totaled tonnes worth USD 573 million, a 34.5% fall in terms of volume and 24% drop in terms of value Globefish Highlights July

34 FISHMEAL Fishmeal prices already 20% lower Fishmeal prices reached a peak of USD 2 140/tonne in April This price hike was caused by several factors, including low production in Peru, disruption in the aftermath of the Chilean earthquake leading to closure of several factories, and strong demand from China. However, this price was considered to be too high by the market, and buyers refrained from purchasing fishmeal. As a result, holdings built up in Chinese ports reaching over tonnes at the end of June As a result of the lower purchase interest, prices declined sharply, to USD 1 600/tonne in early July This price is still USD 600/tonnes ahead of the corresponding price level of last year. Further declines are likely, as demand is relatively low at the moment. Lower fishmeal production Fishmeal production in the five main exporting countries went down by 32% in the first five months of While Chilean production was surprisingly stable, Peruvian production saw a 40% slide in fishmeal output. This was mainly caused by the El Niño weather anomaly experienced in the opening months of the year, combined with a decline in quota allowed by the Peruvian research institute. Surprisingly, Scandinavian fishmeal production was up, after years of continuous decline. Herring stocks are reportedly strong in Northern Europe at the moment. Peruvian fishmeal exports reflected the low production in the country. In the first three months of the year, some tonnes of fishmeal were exported, 12% less than in the same period of last year. China continues to be the main market for Peruvian fishmeal, but shipments to this market contracted by 15%. In view of the exceptionally high prices, however, the income from Peruvian fishmeal exports was higher in 2010 than in Chilean fishmeal exports in the first quarter of 2010 reflected the problems and disruption caused by the Production Fishmeal: 5 major producers Jan-Dec Jan-Mar (1000 tonnes) Peru/Chile Denmark/ Norway Iceland Total Source: GLOBEFISH earthquake in February. In fact, exports were only tonnes, tonnes less than in the same period of Chilean exports of fishmeal to China were almost halved, while the industry managed to retain its market share in the more quality conscious markets of Japan and Spain. Exports Fishmeal: Peru Jan-Dec Jan-Mar China Germany Japan Chile UK Others Total Source: GLOBEFISH AN Exports Fishmeal: Chile Jan-Dec Jan-Mar China Japan Germany Spain Rep. Korea Italy Others Total Source: GLOBEFISH AN 11625, (*) included under others 32 Globefish Highlights July 2010

35 FISHMEAL Further price declines likely In the view of the very limited demand for fishmeal in China, partly caused by lower demand from the aquaculture industry because of the extremely cold winter, prices are foreseen to decline further. It is likely that the normal price level of USD 1 000/tonne will be reached again in one to two months time. Once this level is reached, further falls are unlikely, although production is low and expected to decline further. In future analyses it will be important to look at fishmeal production from waste from the fish processing industry as well. This already accounts for about one fourth of total fishmeal production worldwide. Fishmeal: UK Jan-Dec Jan-Mar Peru Denmark Germany Norway Ireland Iceland Faroe Is Chile Others Production Fishmeal and Fish oil processed Total Source: GLOBEFISH AN 11632, (*) included under others Oil 15% Fishmeal*: USA Jan-Dec Jan-Mar Chile Mexico Canada Peru Panama Iceland Others Total Source: FAO Meal 85% Source: GLOBEFISH AN * excluding solubles Prices Fishmeal and Soymeal 1800 USD/tonne Prices Fishmeal in Chinese ports Fishmeal* USD/tonne Soymeal** May-02 May-03 May-04 May-05 May-06 May-07 May-08 May-09 May-10 * all origins, 64-65% cif Hamburg; 44% cif Rotterdam Source: Oil World, GLOBEFISH AN 11702, Jun-02 Jun-03 Jun-04 Jun-05 Jun-06 Jun-07 Jun-08 Jun-09 Jun-10 Globefish Highlights July

36 FISH OIL Fish oil important part of aquaculture feed composition, 2010 prices rising Fish oil production is currently around 1 million tonnes per year. From this production, about tonnes is destined for human consumption, mainly as fish oil capsules, while the use as margarine hardener has now practically disappeared tonnes of fish oil is used in feed for the rearing of fish or shellfish. Thus about 80% of fish oil production goes to the aquaculture sector. Over the past ten years, fish oil used for aquaculture has increased from tonnes to the present figure of about tonnes. Salmon and trout culture take up the largest share at tonnes, with marine fish at tonnes and crustaceans at tonnes. Other cultured fish such as tilapia, eel and other freshwater fish use an additional tonnes of fish oil. These numbers indicate that the salmonid culture industry still depends quite heavily on fish oil as a feed ingredient. The importance of including fish oil in the diet of aquacultured species has declined during the past ten years. In 2000, about 22% of the feed was made up of fish oil and this has since declined to below 15% at present. The change in the utilization of fish oil over the years is quite remarkable. In the 1970s, over 80% of fish oil was used in hardened edibles, mainly margarine. This share declined to 59% in 1990, while aquaculture at that time accounted for a mere 16% of total fish oil production. By 2010 the share of aquaculture in total fish oil use has risen to 80%. The production of fish oil from whole wild fish is set to continue but volumes are likely to decrease with more fish going for human consumption and as fishing quotas tighten. Volumes from fisheries by-products, including from aquaculture, will continue to grow and eco-efficiency will improve. The unique properties of fish oil will ensure continued strong demand particularly from the human health sector. This will be both as direct consumption of fish oil capsules and also indirectly as an ingredient in the feed for farmed fish, where the omega-3 content will be kept high by the use of fish oil. Fish oil prices move up Production Fish oil: World...Jan-Dec......Jan-Mar... Peru/Chile Denmark/ Norway Iceland Total Source: GLOBEFISH Exports Fish oil: USA...Jan-Dec......Jan-Mar... Menhaden In the first quarter of 2010, fish oil production increased slightly, as a result of higher fish oil production in Scandinavia. However, this positive trend is unlikely to continue in coming months. Oil yields were low in Latin America, a side effect of the El Niño phenomenon, which is expected to lead to lower fish oil production in this area. Higher production in Scandinavia will not be able to balance this. In view of the limited supply, prices of fish oil have gone up since the beginning of the year. In May 2010, the price of fish oil reached USD 1 250/ tonne, about USD 450/tonne ahead of the May 2009 price level. In June 2010, prices suddenly declined by about USD 300/tonne. However, all indicators point to higher prices in the third quarter of the year, as the fishing season in Latin America comes to an end. It is interesting to observe that the price of crude oil and that of fish oil always move into the same direction. Other Total Source: GLOBEFISH AN Prices Fish Oil and Soybean Oil 200 May-02 May-03 May-04 May-05 May-06 May-07 May-08 May-09 May Source: GLOBEFISH AN 12002, 2003 Globefish Highlights July USD/tonne Fish Oil Soybean Oil

37 Fish and fishery products statistics 1 Capture fisheries production Aquaculture fisheries production Exports estim. estim. estim. estim. Million tonnes (live weight equivalent) US$ billion ASIA China of which Hong Kong SAR & Taiwan Prov India Indonesia Japan Korea, Rep. of Philippines Thailand Viet Nam AFRICA Ghana Morocco Namibia Nigeria Senegal South Africa CENTRAL AMERICA Mexico Panama SOUTH AMERICA Argentina Brazil Chile Ecuador Peru NORTH AMERICA Canada United States of America EUROPE European Union Iceland Norway Russian Federation OCEANIA Australia New Zealand WORLD Developing countries Developed countries LIFDCs LDCs NFIDCs Production and trade data exclude whales, seals, other aquatic mammals and aquatic plants. Trade data include fish meal and fish oil. 2 Including intra-trade. Cyprus is included in Asia as well as in the European Union. 3 For capture fisheries production, the aggregate includes also tonnes in 2007 and tonnes in 2008 of not identified countries, data not included in any other aggregates. Globefish Highlights July

38 Food and Agriculture Organization of the United Nations Policy and Economics Division Viale delle Terme di Caracalla Rome, Italy Tel.: Fax: