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2.7 International Trade

Lem, A. and Z. H. Shehadeh

International seafood exports reached US$52 thousand million in 1995, up from US$35.8 thousand million in 1990. The share of exports from developing countries grew from 44% in 1990 to 51% in 1995 and net receipts of foreign exchange rose from US$10.4 thousand million to US$18 thousand million in the same period. The rapid growth in aquaculture production has made the sector important to the economy of many developing countries and, in the case of some traded aquatic products, the sector has become either an important source of supply or the main supplier. In these cases, fluctuation in production of farmed products has significant impact on price trends. In general, however, aquaculture products have helped to stabilize supplies of traded products and to bring down prices over the years. This has made what were previously luxury products available at lower prices and has helped expand markets.

The extent of regional and international trade in aquaculture products is difficult to analyze because trade in many aquaculture products is not yet well documented in the main producing countries, and because international trade statistics do not distinguish between wild and farmed origin. Thus, the exact nature of these categories in international trade is open to interpretation. This situation will change gradually as producers' associations emerge in the main producing countries and begin to keep records, and in response to various trade regulations/pressures which distinguish between farmed and fished products.

Major aquaculture products traded

The main traded products from aquaculture in 1995 were shrimp and prawns, salmon and molluscs. Other species showing strong growth in trade are tilapia, seabass and seabream.

Crustaceans. The most prominent product from aquaculture in international trade is marine shrimp and aquaculture has been the major force behind increased shrimp trading during the past 7-8 years. Shrimp is already the most traded seafood product internationally, and in 1996 about 25% or 700,000 mt came from aquaculture (Rosenberry, 1996). Since the late 1980s, farmed shrimp have tended to act as a stabilizing factor for the shrimp industry. Therefore, the major crop failures in Asia and Latin America during the past few years have had an impact on overall supply, demand, prices and consumption trends. For example, shrimp consumption declined in the US in 1995 due to lower imports caused by declining supplies from Asian countries.

The major markets are Japan, the USA and, to a lesser extent, the European Union (EU). The largest exporters of farmed shrimp (during the first nine months of 1996) are Thailand, Ecuador, Indonesia, India, Mexico, Bangladesh and Vietnam (Branstetter, 1997). The contribution of farmed shrimp to total domestic production in these exporting countries is shown in Table 2.7.1. Demand for shrimp and prawns is expected to increase in coming years. Asian markets such as China, the Republic of Korea, Thailand and Malaysia, will expand as local economies grow 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 expand. Increase in prices will encourage new entries into shrimp farming, if sustainable methods of production are practised that would help avoid production crashes, national curbs on production expansion, or trade embargoes.

Country

% of total production

China

13

Ecuador

90

India

32

Indonesia

43

Mexico

18

Thailand

69

Viet Nam

30

Source: FAO, 1997c

Trade in crab species has increased with growing aquacultural production (1995: 98,000 mt). Especially important have been the exports of mainland China (21,000 mt in 1995) to China, SAR of Hong Kong and Japan.

Finfish. In terms of total aquaculture output, finfish production ranks first with 14.7 million mt produced in 1995, or about 53 % of the total production from aquaculture. The major part of this is carps (69% of total finfish production in 1995), which are consumed locally in the producing countries (mainly China and India).

International trade in farmed salmon has increased from virtually zero to more than 500,000 mt (1996) in less than a decade. The traded species are Atlantic salmon and, to a much lesser extent, coho salmon, which accounted for 87% and 11% of production in 1995, respectively (FAO, 1997a). Growth in trade has followed the growth in salmon production, as the bulk of production is concentrated in a few countries with limited domestic markets--Norway, Chile and the UK. Norway is the main exporter of Atlantic salmon; Chile is the main exporter of coho salmon and second largest exporter of Atlantic salmon. The EU is the main market for Norway (70% of exports); Japan and the US are the main markets of Chile (60% and 30% of exports, respectively). Norway has targeted Asia as the future growth market in addition to further penetration of the European markets, and more than US$7.25 million was spent in 1996 on promoting salmon and trout. Chilean producers foresee strong growth in the USA and Latin American markets and more emphasis in the industry on value-added products (FAO, 1996; Lem and Di Marzio, 1996). With increased production volumes, costs and prices have been driven down, and at current levels (US$3.50-4.00/kg CIF), salmon has become a relatively medium-priced product in international seafood markets ( Figure 2.7.1).

Figure 2.7.1
Norwegian salmon production and export prices International trade in trout is much less that in salmon, with exports reaching 55,000 mt in 1995 out of a total production that year of 384,000 mt. Consumption is concentrated in trout-producing countries, but Norway and Chile have begun to farm quantities of large, heavily pigmented trout for the Japanese market: Japanese 1996 trout imports were 36,500 mt.


Tilapia is another species group that has shown a tremendous growth in output (660,000 mt in 1995). International trade is limited but growing, especially between Central America (Costa Rica, Ecuador and Colombia) and the USA, and between Asian producers (Taiwan Province of China, Indonesia and Thailand) and the USA and Japan. There is also modest trade between Jamaica and the UK. 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, with total exports of 16,000 mt in 1996. Taiwan Province of China exports about 5% of its tilapia production and supplies 79% of the US tilapia imports (1996 data) (Table 2.7.2). Thailand and Indonesia export less than 5% of their production (Dey and Eknath, 1997). Viet Nam has also recently entered the world tilapia market and China exported the fresh weight equivalent of 122 mt to the USA in 1996.

Tilapia is now the third largest imported aquaculture product in the USA (1996 imports of 19,000 mt), after shrimp and salmon. Imports were up 21% by quantity in 1996, following an increase of 33% in 1995, and are forecast to increase further in 1997. Long-term tilapia prices are expected to decrease and this should lead to greater exports to the USA as well as to Europe, presently undeveloped as a market for tilapia.

In Europe, the seabream/seabass industry intends to copy the success of salmon growers. Production reached about 60,000 mt in 1996, of which nearly 90% was exported, mainly to Italy and Spain (FAO, 1997a). The main exporter was Greece, with about 70% of production exported. Italy has been almost the exclusive market for Greek production. However, as a result of market development efforts, about 15% of Greek exports in 1995 went to new markets (UK, Germany, France, etc.) and the share of such markets is expected to grow (Stephanis, 1996). Trade in fingerlings was from Italy, Spain and France to farms in Greece, Malta and Croatia.

Figure 2.7.2
figure 2.7.2 Sea bream production and price development As output of seabass/seabream has grown, costs have been driven down, and market prices have almost been halved during 1990-1995, from US$16/kg to around US$8/kg ( Figure 2.7.2). The rapid saturation of the market and the parallel rapid decline in prices (50% in five years, compared to 50% in ten years in the case of Atlantic salmon) is attributed to the much smaller traditional market for these species (in southern Europe) compared to that for Atlantic salmon, lack of diversified products, inadequate market development, and absence of technological advances (e.g. genetic improvement, efficient feeds and feeding strategies) which could significantly improve productivity. The substantial drop in price of these species should help open new markets and expand existing ones, provided acceptable profit margins can be sustained at the production end through improvements in productivity and diversification of products.

American catfish is now the fifth most consumed fish in the USA (0.36 kg per capita edible weight in 1995). Exports are limited as the production is aimed at the domestic market, but producers have recently started exporting to Europe. The reason for the success of catfish is similar to that of tilapia: consumer demand for white, easy-to-prepare, fillets.

Seaweed Farmed seaweed production has been growing in the last decade (6.1 million mt in 1995) and is now 86% of total seaweed supplies. Most 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 (total 1996 exports from the Republic of Korea: 21,000 mt).

Significant quantities of Eucheuma (red seaweed), are exported by the Philippines, Tanzania and Indonesia (total Indonesian 1995 exports: 18,000 mt) to the USA, Denmark and Japan. Total EU imports of seaweed in 1995 amounted to 58,000 mt with the Philippines, Chile and Indonesia as the biggest suppliers.

Molluscs. International trade in molluscs is relatively limited, with less than 10% of total output traded. Major importing markets are Japan, USA and France, and major exporters are China and the Republic of Korea. The contribution of farmed products to trade is uncertain.

Farmed mollusc production volumes are fairly evenly split between oysters, clams, mussels and scallops, but in international mollusc trade 70% of value is concentrated in scallops and clams (fresh and frozen). Total fresh and frozen scallop imports have grown from 28,000 mt in 1985 to 60,000 mt in 1995, reaching US$493 million. Clam imports have grown from 33,000 mt to 178,000 mt in the same period, valued at US$295 million. Mussel imports were showing a downward trend after a peak of 175,000 mt in 1992 but have now levelled out at 130,000 mt with a value of US$188 million. Oyster imports have been growing steadily from less than 10,000 mt in 1985 to 30,000 mt in 1994 and seem now to have stabilized at this level (1995: 27,000 mt, US$140 million.).

Live Seafood. Asia is rapidly increasing its consumption of live seafood as a result of cultural preferences and growing affluence. 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 expansion 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 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 regional trade in Mediterranean seabass and seabream; there is also trade in glass eels (e.g. recent large purchases of European eel elvers by China), post-larvae 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 will improve gradually in response to concerns about spread of diseases and the movement of genetic material.

Issues affecting future trade in aquaculture products

Externalities. Environmental and social concerns have already influenced farmed shrimp exports to North America and Europe in 1997. The importance of attaining sustainable aquaculture with no or limited externalities will force many exporting countries to adopt more sustainable production practices. The introduction of eco-labeling schemes will further increase this trend.

Quality. With growing concern about food safety, increasing efforts have been undertaken to improve the quality of aquaculture products. International codex standards cover aquaculture products, and the introduction of mandatory HACCP requirements for exports to the USA and the European Union in 1997 will have strong impact on trade in aquaculture products in the near future. Some countries have developed comprehensive HACCP plans for selected aquaculture products; for example, the USA now has plans for catfish, crawfish and molluscan shellfish. In other countries, individual aquaculture producers undertake voluntary certification (ISO 9000) for control as well as marketing purposes.

Tariffs. Despite steady reductions in tariffs on fish and aquaculture products in recent years, tariffs as well as 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 USA all give competitive advantages to domestic producers of many species, especially in the case of processed products. Average tariffs on imports from developing countries are now estimated at 4.8%, a cut of 27% from the previous level of 6.6% (FAO, 1995). The long-term trend, with growing membership in the World Trade Organization, will be for further reductions in tariffs.

Food security. Aquaculture is an important source of seafood because most of the production is consumed domestically by producing nations. It has also become a significant source of foreign currency to many developing nations because the products exported usually are 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 can be considered important to food security even when the output is exported.

References

Branstetter, H. 1997. Facing farming and turtle problems, is shrimp production in a crunch? Quick Frozen Foods International, January 1997, p.38-42.

Dey, M.M. and A.E. Eknath. 1997. Current trends in the Asian tilapia industry and the significance of genetically improved tilapia breeds. In K.P.P. Namibar and T.Singh (eds.) Sustainable Aquaculture. Proceedings of INFOFISH-AQUATECH 96 International Conference on Aquaculture, Malaysia. Kuala Lumpur, INFOFISH. 248p.

FAO.1995. Impact of the Uruguay round on international fish trade. GLOBEFISH Research Programme, Vol. 38. Rome, FAO.

FAO. 1996. GLOBEFISH Highlights, 4/96. Rome, FAO.

FAO. 1997a. Commodity update groundfish. GLOBEFISH Highlights, 2/97. Rome, FAO.

FAO. 1997b. Aquaculture production statistics 1986-1995. FAO Fisheries Circular. No. 915, Rev.9. Rome, FAO. 195p.

FAO. 1997c. FAO yearbook of fishery statistics: catches and landings. Vol. 80.1995. Rome, FAO. 1997. 714p.

Lem, A. and Di Marzio, M. 1996. The world market for salmon. GLOBEFISH Research Programme, Vol. 44. Rome, FAO. 71p.

Stephanis, J. 1996. Mediterranean aquaculture industry trends in production, markets and marketing. In B. Chatain, M. Saroglia, J. Sweetman and P. Lavens (compilers) Seabass and Seabream Culture: Problems and Prospects. Handbook of contributions and short communications at the International Workshop on "Seabass and Seabream Culture: Problems and Prospects", Verona, Italy. European Mariculture Society.

Riepen, M. 1997. The Asian market for live seafood, p.177-183. In K.P.P. Namibar and T. Singh (eds.) Sustainable Aquaculture. Proceedings of INFOFISH-AQUATECH 96 International Conference on Aquaculture. Kuala Lumpur, INFOFISH. 248p.

Rosenberry, B. 1996. World Shrimp Farming, 1996. San Diego, Aquaculture Digest.

USDA. 1997. Aquaculture Outlook, 4 March 1997.