Aquaculture Products:
Quality, Safety, Marketing and Trade¹

Introduction

At a global level, aquaculture is one of the fastest growing food production sectors (9.6 per cent/yr in the last decade), a fact that will ultimately change the way that fish is perceived as food. A key element of this observation is the change in the supply opportunities for fish and fish products from a wild source to a cultured one.

Aquaculture product expansion has placed increased requirements on quality and food safety by consumers and regulators. There are few questions about the evident nutritional benefits of consuming fish but, by the end of the 1980s, developed countries arrived at the conclusion that classic fish (and food) inspection procedures, based on the analysis of samples of the final product and on generic hygiene measures, were not enough to provide the necessary level of protection to consumers. A preventive system called HACCP (hazard analysis critical control point) was adopted, and governments started to shift their regulations to HACCP-based systems. If one word has to be chosen to explain HACCP, it is “prevention.”

An important point within the global market is the growing importance of international agreements that involve food (and fish) safety aspects. About 40 per cent of all fish produced are traded internationally, which means that there is a search for common criteria that facilitate or permit clear rules for compliance. The tendency is, therefore, to move towards the harmonization of national regulations, meaning that such regulations could assure an equivalent level of food protection to consumers. This is a relatively easy concept to understand, but very difficult to implement and validate in practice. In turn, this increases the importance of internationally accepted guidelines, recommendations and standards, such as those of the Codex Alimentarius. The provisions related to food trade of the General Agreement on Tariffs and Trade (GATT) Agreement compound this tendency, and all of these aspects are interlinked.

The extent of regional and international trade in aquaculture products is difficult to analyse because trade in many aquaculture products is not yet well documented in all of the main producing countries. Aquaculture contributes primarily to domestic consumption but, at an international level, important trade has developed for a number of aquaculture products, and this has been one of the principal driving forces for aquaculture development in many developing and developed countries.

International agreements on food safety

While there is no common agreement on food or fish safety at the international level, agreements do exist on food trade that have implications for food safety and quality matters. The important one regarding food safety is the Agreement on the Application of Sanitary and Phytosanitary and Measures (SPS) (GATT, 1994), which introduces two very important concepts. The first is that “to harmonise sanitary and phytosanitary measures on as wide a basis as possible, Members (countries) shall base their sanitary or phytosanitary measures on international standards, guidelines and recommendations, where they exist...
(Article 3)”.

The same agreement establishes that, regarding food safety, “international standards, guidelines and recommendations” to be taken as reference will be those “established by the Codex Alimentarius Commission (CAC) relating to food additives, veterinary drug and pesticide residues, contaminants, methods of analysis and sampling and guidelines of hygiene practice”.

The second important point of the SPS Agreement is the adoption of the criterion that risk assessment shall be the basis for determining the appropriate level of both sanitary and phytosanitary protection. In this case, the SPS Agreement imposes a strong condition on national regulations that have not yet accommodated this criterion. Current HACCP-based regulations include a “hazard analysis” step, but risk assessment, which should be a part, is performed only qualitatively, and regulations do not refer to risk assessment explicitly. It is clear that the future development and evolution of regulations will be in this direction.

All developed countries and a large number of developing countries have taken up regulatory HACCP-systems. These concern the safety of fish and fish products, which include products from aquaculture, and it is assessed that approximately 65 per cent of the total international fish trade is performed under such regulations. The greatest exception concerns the Japanese market, which accounts for about 24 per cent of the total fish market (demand), but which has no HACCP regulations as yet.

Fish safety in the European Community

The Member States of the European Community (EC) are subject to both European and national legislation, and considerable developments in laws affecting aquaculture have occurred in the last decade. These are separated into two clear sections that concern the final product and the aquaculture process.

The HACCP-based regulation for fish and fish products in the EC introduced the concept of “own health checks” (HACCP in terms of the EC regulation relative to fish products), and it is the Council Directive 91/493/EEC that laid down the health conditions for the production and the placing on the market of fishery products. EC aquaculture production follows Council Directive 91/67/EEC, which concerns conditions of stock health and health management and which, in practice, generated a “family” of regulations. For instance, Council Directives 93/54/EEC, 95/22/EC and 95/70/EC have successively amended Directive 91/67/EEC. This “family” of regulations is aimed basically at controlling fish diseases; they are only, in a second instance, complementary with the HACCP-based regulations aimed at preventing human diseases. The regulations related to aquaculture production do not imply accomplishment of the fish safety regulations, however. Although there are no contradictions between either regulation “family”, their complementarity and coordination will surely increase with time.

Fish safety in the United States of America

The basic regulation in the United States of America, which makes mandatory the implementation of the HACCP system in fish and fish products, is that of the United States Food and Drug Administration (FDA,5).

This regulation does not mention fish obtained from aquaculture specifically, but this source is included implicitly in the definition of “fish” (“where such animal life is intended for consumption”) and in other paragraphs of the regulation (e.g., when “drug residues” is listed as one of the possible hazards to be accounted for). However, the regulation is specifically centred on processing, and does not apply to aquaculture production in itself.

Fish and fish products from aquaculture are included, either explicitly or implicitly, in such HACCP-based regulations. However, whereas the HACCP system is well defined for processing steps or procedures once the fish has been harvested, the application of the HACCP system to the entire aquaculture production chain is not so clearly established within the regulatory environment. Developments in this area can be anticipated.

Further evolution of the fish safety regulations may be expected with the introduction of new technical, scientific and operative knowledge and, in particular, regarding mandatory quantitative risk assessment.

All matters that relate to safety, quality and trade rely on the ability to identify and trace the product, but the traceability of food remains as an enormous problem to be solved. In its broadest sense, a traceability system would provide and allow access to all information concerning a product. In the case of aquaculture, this could mean following the history of a production batch from the final point of sale back to the hatchery. This would mean assuring knowledge of the steps encountered in distribution, packaging, processing and harvest, including the growing conditions, the feeds and therapeutic agents used, the broodstock parentage and any other relevant information.

Clearly, such a huge amount of information cannot be encoded physically with the product, but needs to be accessible via coding and linking to appropriate databases. The ability to trace and isolate a problem with a product is essential to any safety system, but the concept of traceability is much more than this, since it affords assurance, generates trust and, very importantly, can allow the use of important information for marketing and sales. Information is a new measure for adding value and will increase in importance.

Aquaculture and trade

International seafood exports reached US$48 billion in 1998 (provisional FAO data), up from US$36 billion in 1990, but down slightly from the figures for 1996 and 1997. The share of developing countries in seafood exports grew from 43 per cent to 49 per cent between 1990 and 1997, giving net receipts of foreign exchange that rose from US$10.2 billion to US$15.8 billion.

The rapid growth in aquaculture production has made the sector important to the economy of many developing countries, and it has become either an important source of supply, or the main supplier, in the case of some products. For these farmed products, production fluctuations have had a significant impact on price trends. In general, however, aquaculture products have helped to stabilize traded supplies and to bring down prices over the years. Furthermore, several species that were once considered to be high-value luxury products have now become more abundant through aquaculture production, lowering prices and expanding markets.

The extent of regional and international trade in aquaculture products is difficult to analyse because trade in many aquaculture products is not yet well documented in all of the main producing countries. Furthermore, because international trade statistics do not distinguish between wild and farmed origin, the exact breakdown between fisheries and aquaculture in international trade is open to interpretation.

This situation will change gradually, as aquaculture associations emerge in the main producing countries and start to keep records, and in response to various trade regulations that distinguish between farmed and fished origin (e.g., for shrimp).

Traded aquaculture products

In 1998, the main internationally traded products from aquaculture were shrimp, salmon molluscs and seaweed. Other species showing strong growth are tilapia, seabass and seabream.

Crustaceans

Marine shrimp is the most prominent product from aquaculture in international trade, and aquaculture has been the major force behind increased shrimp trading during the past seven to eight years.

The major markets are Japan, the United States of America and, to a lesser extent, the EC, while the largest exporters of farmed shrimp are Thailand, Ecuador, Indonesia, India, Mexico, Bangladesh and Vietnam. Demand for shrimp is expected to increase in coming years, where Asian markets, such as China, the Republic of Korea, Thailand and Malaysia, will expand as local economies recover and consumers’ demand more seafood. This trend is already reducing the availability of shrimp to traditional importers and will eventually put upward pressure on prices if supplies do not increase.

Trade in crab species has also increased with growing aquaculture production (1997: 165 000 mt). Especially important have been the exports of China (19,000 mt in 1998) to Hong Kong SAR China and Japan (INFOYU, 1999).

Finfish

In terms of total aquaculture output, finfish ranks first, with 49 per cent of the total production from aquaculture, of which the major part are carp species, which are consumed locally in the producing countries (mainly China and India). As opposed to shrimp, finfish aquaculture trade appears to be split between species having a high traditional demand and a “quality” image (e.g., salmon, seabass etc.) and convenience products (mainly fillets) of “cheaper” fish species (e.g., tilapia). The following species are the main products that are seen as being important in international trade:

Salmon: International trade in farmed salmon has increased from virtually nothing to more than 600 000 mt (1999) in less than a decade. The traded species are mainly Atlantic salmon and, to a much lesser extent, coho salmon, which accounted for 87 per cent and 12 per cent of 1997 salmon production, respectively (FAO, 1999b). The growth seen in trade has mirrored that of production, reflecting the fact that this activity is concentrated in a few countries that have limited domestic markets (Norway, Chile and the United Kingdom).

As production volumes have increased, so has competition within the market and costs and prices have been driven down. At the current price levels (+/-US$4/kg CIF [Cost, Insurance and Freight) Europe), salmon has become a relatively medium-priced product in international seafood markets.

Trout: Trout is traded internationally at a much lower level than salmon, with exports reaching 135 000 mt in 1998 out of a total production of 463 000 mt. (FAO, 1999b). However, trout production is split, approximately equally, between portion-size production and large trout, and where 70 per cent of global production is in Europe. Consumption, particularly of portion-size fish, is concentrated in trout-producing countries, but Norway, Chile and Finland have been able to farm particular qualities of large-sized, heavily pigmented trout for the Japanese market, primarily as a replacement product for coho salmon. Japanese trout imports reached 60 000 mt in 1998 (Japanese Marine Products Importers Association, 1999).

Tilapia: Tilapia species have also shown a tremendous growth in output (production of 946 000 mt in 1997), and although international trade is limited, it is growing. This is observed especially between Latin America (Costa Rica, Ecuador and Colombia) and the United States, as well as between Asian producers (Taiwan Province of China, Indonesia and Thailand) and the United States and Japan. There is also modest trade between the EC and producers in Jamaica, Israel and Zimbabwe. The biggest exporter, Taiwan Province of China, supplies Japan with high-quality tilapia fillets for the sashimi market and ships frozen tilapia to the American market. Taiwan Province of China now exports about 35 per cent of its domestic tilapia production and supplies 80 per cent of the United States tilapia imports (1998). Thailand and Indonesia export less than five per cent of their production (Dey and Eknath, 1997). Vietnam has also recently entered the world tilapia market, and China exported 500 mt to the United States in 1998 (NMFS, 1999).

Seabass and seabream: In Europe, the marine fish farm industry of the Mediterranean has focused on the production of European seabass and gilthead seabream, and it intends to copy the success of salmon growers. Production reached almost 90,000 mt in 1999 (FEAP, 1999), of which nearly 90 per cent was exported from the country of origin, mainly to Italy and Spain. The principal exporter was Greece, which exported about 70 per cent of domestic production. Italy was, for a long time, almost the exclusive market for Greek production. However, as a result of market development efforts, some 15 per cent of Greek exports are now going to “new” markets (e.g., the United Kingdom, Germany, France etc.), and the share of these markets is expected to grow. It is not to be ignored that trade in live fingerlings is made from hatcheries in Italy, Spain and France to farms in Greece, Malta, Croatia and elsewhere.

As output of seabass and seabream has grown, market prices have more than halved between 1990 and 1999, dropping from US$16/kg to less than US$5/kg today. The rapid saturation of the market and the speed of the parallel decline in prices (down 50 per cent in five years, compared to the ten years for a similar drop in the case of Atlantic salmon) is attributed to several factors:

• the much smaller traditional market for these species (southern Europe), compared to Atlantic salmon;
• lack of diversified products;
• inadequate marketing and market development; and
• absence of technological advances (e.g., genetic improvement, efficient feeds and feeding strategies etc.) that could significantly improve productivity.

The substantial drop in prices should help to open new markets and expand existing ones, provided that acceptable profit margins can be sustained in production through improvements in productivity, diversification of products and intensified marketing efforts.

Seaweed

Farmed seaweed production has increased in the last decade (6.8 million mt in 1997) and is now 87 per cent of total seaweed supplies. Most of the output is used domestically for food, but there is growing international trade. China, the major producer, has started exporting seaweed as food to the Republic of Korea and Japan. The Republic of Korea, in turn, exports some quantities of Porphyra (red seaweed) and Undaria (brown seaweed) to Japan (1998 exports of 26 000 mt). Chile produces over 100 000 mt, and is responsible for some 75 per cent of global production of Gracilaria sp., which is used for agar manufacture.

Significant quantities of Eucheuma (red seaweed) are exported by the Philippines, Tanzania and Indonesia to the United States, Denmark and Japan. Total EC imports of seaweed in 1998 amounted to 58,000 mt, with the Philippines, Chile, Indonesia and Australia as the biggest suppliers.

Molluscs

International trade in molluscs is limited when compared to total output, with less than 10 per cent of production traded. The major importing markets are Japan, the United States and France, while major exporters are China and the Republic of Korea. The contribution of these farmed products to trade is uncertain.

Oysters, followed by clams, scallops and mussels, lead farmed mollusc production, but international mollusc trade concentrates on scallops and clams (fresh and frozen). Total fresh and frozen scallop imports have grown from 28 000 mt in 1985 to 65 000 mt in 1998, reaching US$510 million. Clam imports have risen from 33 000 mt to 152 000 mt in 1997, valued at US$257 million. Mussel imports have shown a downward trend after a peak of 175 000 mt in 1992, but have bounced back to 188 000 mt worth US$220 million. Oyster imports have grown from below 10 000 mt in 1985 to 28 000 mt (US$112 million) in 1998.

Live seafood

The cultural preferences and growing affluence in Asia indicate a clearly positive long-term trend of live seafood commerce. The live seafood market is largely restricted to the restaurant trade and to consumers with a relatively high disposable income. Major market expansion is anticipated due to demand in China, but is also expected in Malaysia, Singapore and Taiwan Province of China, as well as in parts of North America with large Chinese communities. The potential for aquaculture to supply the market is promising. The sector is already supplying large amounts of shellfish and limited quantities of grouper, crabs and other species. Technological developments in the culture of preferred live food species will increase the contribution of aquaculture to supplies (Riepen, 1997).

Seed supplies

There appears to be significant regional and international trade in the seed of cultured aquatic organisms, mainly from aquaculture sources, but this is poorly documented at present in most instances. Mention has been made above of the regional trade of fingerlings for Mediterranean seabass and seabream, but there is also international trade in wild glass eels (e.g., the recent development of large purchases of European eel elvers by China), “eyed” (fertilized) eggs of salmon and trout, the postlarvae of various cultured shrimps, Indian and Chinese carps, and others. There is also limited trade (in terms of quantity) in broodstock. Documentation of trade in seed and fingerlings will improve gradually as a response to concerns about the spread of pathogens and the movement of genetic material. One would anticipate that the concerns of traceability will also support such documentation.

Issues affecting future trade in aquaculture products

The long-term viability and sustainability of aquaculture development, particularly in respect of commercial aquaculture, will be market driven, taking into account not only the consumer’s requirements but also the structure and legislative demands of the target market, be it local or international. Some of the key issues that need to be addressed are mentioned in the following sections.

Externalities

Environmental and social concerns can influence markets for consumer goods and have already influenced farmed shrimp exports to North America and Europe in recent years. There is a growing desire for knowledge of what is being consumed, a position that, in some cases, is accompanied by accountability for consumption.

The importance of attaining sustainable aquaculture with no or limited negative externalities will force many exporting countries to adopt more sustainable production practices. The introduction of eco-labelling schemes will further accentuate this trend. Where aquaculture is perceived as a non-traditional food-producing sector, it will have to further establish its credentials for sustainability, particularly when compared to fisheries and crop agriculture. This consideration requires to be extended to safety assessments, based on risk assessment and the precautionary approach, before entry into production of new or exotic species, including the potential use of the products from modern biotechnology.

Awareness of environmental and welfare issues is increasing, particularly in the developed countries, where purchase decisions can be influenced by adverse publicity or a lack of information. As livestock farmers, aquaculture producers are increasingly required to act responsibly and in line with standards expected of the activity. While such topics are partially addressed by the Food and Agriculture Organization’s Code of Conduct for Responsible Fisheries (CCRF), it is increasingly recognized that standards applicable to international trade in aquaculture require harmonization. At national levels, safety and quality management systems including Good Agricultural Practice (GAP) and Good Manufacturing Practice (GMP) should be developed and put in place in order to assure the production, distribution and sale of aquaculture products that are safe to consume and of high quality. Such measures require active and competent professional associations, working hand in hand with government, in order to be successful.

The collection, analysis and dissemination of relevant information should be facilitated in order to enable producers and industry operators to make informed decisions and to ensure consumer confidence in aquaculture products.

Quality and safety

With growing concern about food safety, increasing efforts have been undertaken to improve the quality of food that is placed in the market, which evidently includes aquaculture. International codex standards cover aquaculture products, and the introduction of mandatory HACCP requirements for exports to the United States of America and the EC in 1997 has already had a great impact on trade in several aquaculture products.

Some countries have developed comprehensive HACCP plans for selected aquaculture products; for example, the United States now has plans for catfish, crayfish and molluscs. In other countries, individual aquaculture producers have undertaken voluntary certification (ISO 9000) for control as well as marketing purposes. Such certification appears to be increasingly required for entry into markets such as multiple retail stores.

Alternative efforts include the development of industry-led quality schemes, which require government approval, to which individual producers can adhere. These schemes have controllers and strict operating procedures and conditions, serving to provide products of high quality and known origin.

In the field of HACCP, focus is increasingly on risk assessment by the operator, and this issue will put further institutional demands on exporting countries.

The effects of bovine spongiform encephalitis (BSE - mad cow disease) in cattle, the debate over genetically modified organisms (GMOs) and the increased awareness of toxin presence in the environment and food have contributed to a higher consciousness of the consumer to the quality and content of food in general, especially in the developed countries. Actions to assure best practice, including traceability throughout the entire supply chain, are seen as being inevitable for assuring both the credibility and the sustainability of the aquaculture sector. This should not just apply to the aquaculture production process, but also include the feed content, particularly where additives and the potential use of GMO components are concerned.

Sales and marketing

Attaining and maintaining consumer confidence requires considerable effort. It is no longer satisfactory to believe that production of a “high value” aquaculture product is a guarantee for the producer’s long-term success.

The long time required between investment in stocks and financial returns from sales can force producers to sell too early or at low prices, simply because of current cash needs, a circumstance that is punctual and rarely accompanied by marketing efforts. Such situations lead to market surpluses and price crashes in circumstances where better financial and production planning could assist.

The geographic dispersion of the activity and the relatively small amount of production per unit mean that there are a high number of sellers to markets that have few buyers (in number), a situation that gives keen competition and an advantage to the buyer. In addition, the aquaculture sector is relatively young and spends little money on marketing and promotion, particularly at the producer end of the scale.

Aquaculture produces perishable products with a short shelflife, particularly where products are sold fresh, meaning that distribution skills and production planning (to avoid surplus supplies to markets at specific times of the year) have to be honed to meet market demands.

The need for improved marketing and distribution skills is evident in many individual cases, where the grouping of producers under cooperative structures or as producer organizations is seen as being a response to such criticism.

The creation of efficient marketing systems, in which prices and costs are determined by supply and demand, moving to assure economic efficiency and sustainability, should be facilitated. The use of economic incentives and disincentives should be used to rectify market failure and the unsustainable use of resources.

Distribution channels

The growing market share of multiple retail stores (super- and hypermarkets) in the distribution of foodstuffs has significantly changed patterns of production, supply and distribution.

An example of this is the demand for packaged products, even for fresh, gutted fish. The demand now focuses on fixed weight packs (so that no individual weighing is required), particularly for processed products, using modified atmosphere packing (to assure freshness and a longer shelf-life) and where the sale price is attached prior to despatch to the supermarket. These conditions mean that, for the aquaculture producer to be capable of attaining this market, access to approved processing and packing facilities has become an essential part of working, as opposed to an option.

Labelling should follow the recommendations and codes of practice that are in line with the international requirements of the World Trade Organisation (WTO) and the Codex Alimentarius, demonstrating full traceability.

Tariffs

Despite steady reductions in customs tariffs on both fish and aquaculture products in recent years, tariffs and import licenses continue to represent barriers to trade in many countries. This is especially the case in many fast-growing economies in Asia, but important markets such as Japan, the European Union and the United States of America all give competitive advantages to domestic producers of many species, especially in the case of processed products. On the other hand, producers in the developed markets argue that they are subject to higher levels of control and imposed regulatory investments that increase their production costs.

Average tariffs on imports from developing countries are now estimated at 4.8 per cent, a cut of 27 per cent from previous levels (FAO, 1995). The long-term trend, with growing membership in the WTO, will lead to further tariff reductions. The multilateral trade negotiations, which were to have started in late 1999, now show some delay in taking off, but could also have a large impact on future trade in fish and aquaculture products.

Measures that are taken to protect human life, animal life and health, the environment and the interests of consumers are increasingly seen as being potentially discriminatory, either in the nation of origin or in the exporting nation, depending on the point of view and the legislation in question.

Food security

Aquaculture is an important source of seafood, and the major part of the total output from aquaculture is consumed internally by the nations that produce, providing employment and an important nutritional contribution to society. Aquaculture has also become a significant source of foreign currency for many developing nations, since the products exported are usually the more valuable ones destined for markets in the developed world. These revenues allow the countries to import other less costly protein and, as such, aquaculture plays an important role in food security, even where significant proportions of the output are exported.

Conclusions

The circumstances of producing and marketing fish and seafood produced from aquaculture are changing quickly. Technological advances have brought new species and higher productivity to the sector, which has developed to become an important contributor to national and international markets. Consumer demand for specific products, combined with good business opportunities, has contributed to the rapid development and restructuring of certain aquaculture subsectors, notably those concerned with export to developed countries. The industrialization of production and processing, alongside increased consumer awareness and legislative actions, has imposed quality and safety standards that are becoming requisite rather than optional. Sustainability and environmental friendliness are also factors that are being linked to sectoral acceptability and, hence, influence quality, marketing and trade issues.

References

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