FAO/GIEWS - Food Outlook No.4 - September 1999 p. 11

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Groundfish supply was very limited in the first half of 1999. In Namibia the hake quotas have been increased from 165 000 tonnes in 1998 to 195 000 tonnes in 1999, while the quotas for hake in South Africa are set at the same level as last year (151 000 tonnes). However, this increase will not fill the gap expected from South America, caused by the closure of hake fisheries in Argentina, Chile and Uruguay and their slow recovery in Peru.

A further reduction in Alaska pollock catches is forecast for 1999 on the wave of the constant decline (with the exceptions of 1995 and 1996) experienced since the peak of 6.8 million tonnes in 1986. The main fishing season for Alaska pollock in the Sea of Okhotsk ended in early May 1999. Having a quota of 860 000 tonnes, fishermen in the Far East of Russia caught 850 000 tonnes, 200 000 tonnes less than the previous year. In the Unites States, Alaska pollock TAC (Total Allowable Catch) for 1999 is of 992 000 tonnes, representing a decrease of 118 000 tonnes compared to 1998. Alaska pollock prices are currently rather stable, but are expected to move upward later this year.

The increase in hoki exports to Europe last year was mainly a result of the increasing shortage of pollock. Sales rose by 250 percent, to US$ 47 million, according to trade figures reported in New Zealand.

Catches for cod have decreased by more than 25 percent from the late 1980s to the present. Supply of cod from Canada is expected to recover slowly in the next few years. Canadian cod catches used to be one of the highest in the world until the Canadian cod stocks collapsed in the early 1990s. Cod fishing along the east coast of Newfoundland resumed on 8 July 1999, after seven years of closure, with the adoption of a very small commercial fishery quota (6 000 tonnes). Furthermore the Fisheries Resource Conservation Council in Canada has experienced an increase in inshore cod catches reaching 45 000 tonnes (end of May 1999), representing an increase of about 50 percent compared to the previous year. There are signs of a seriously reduced cod stock in the Barents Sea. Not since 1990 have the stocks of Northeast Atlantic cod been so low. For the next few years a considerable lower TAC for Atlantic cod in the Barents Sea is expected. On the other hand, cod catches in the Icelandic EEZ (Exclusive Economic Zone) are increasing and prospects for the future seem positive. The short supply of cod in Europe has increased the importance of Pacific cod as raw material for European buyers. Asian markets for cod are relatively weak compared to the European and United States ones. Cod prices have been particularly high on the EC and North American markets since the beginning of 1998. This was due to poor catches and strong demand, particularly from the fillet and block markets.

In the last five years catches of haddock have been rather stable at about 320 000-350 000 tonnes per year. Forecasts for 1999 are for a slight decline from the 1998 catches. In the Barent Sea the TAC has been cut by 52 000 tonnes to 78 000 tonnes for 1999 and in the North Sea the quota was cut by 26 500 tonnes to 88 500 tonnes for 1999. In addition, the TAC in the Icelandic EEZ has been cut by 10 000 tonnes to 35 000 tonnes. On the other hand, Canadian scientists have reported an increase in haddock on Georges Bank, with the current year class about twice the average size reported in 1978. Coupled with conservation restrictions, this opens the way to a haddock quota of between 20 000 tonnes and 30 000 tonnes within the next few years. Haddock prices are currently rather stable on the US and European markets and this trend is likely to continue.

The main features on the shrimp market world-wide have stayed the same for more than two years now. The Japanese market was hit by the economic crisis, and demand for shrimp went down, with some short term changes during festivities. The United States market showed a buoyant demand and the strong dollar attracted additional supply. The traditional trend which sees Asian shrimp going mainly to Japan has changed, and more and more shrimp from Asia is exported to the United States. The European market is also relatively strong. Prices are expected to decline in the coming months, as buoyant supply from Asian shrimp farms will become available.

In April 1999, cultured shrimp products in Central and South American countries were hit by the white spot disease. South and South East Asia reported a strong cultured shrimp production in the second quarter of the year, with Indian production significantly high.

Demand for shrimp in the United States was strong in the opening months of the year, and prices have strengthened in recent months. Thailand expanded its top position as supplier of shrimp to the United States market. The country sells, above all, peeled shrimp, a product form which accounts for 44 percent of Thai exports to the United States.

Demand for shrimp in Europe has been good in 1999, and Asian products redirected increasingly to Europe rather than to the Japanese market. In view of the good supply expected for the coming years, prices are also expected to decline in Europe.

Demand is expected to stay strong on the United States market, a continuation of last year's trend. Prices are forecast to decrease, as strong demand will be coupled with increasing supplies, from both the domestic production and from imports. South East Asian countries, with Thailand and Indonesia as front runners, will increase their shipments. The Japanese market stays bleak.

Tuna catches are well ahead compared to 1998 in practically all major fishing areas and particularly catches in the Eastern Pacific continued the positive trend experienced in 1998. This may lead to further reduction of prices, which had started to decline in mid-1998. Demand for sashimi tuna has improved in Japan, though sales are still not back to normal. Canned tuna is also selling well in the two main markets (USA and EC). For the first time in years, Japan imported less fresh tuna in 1999. The biggest declines were experienced in fresh bigeye imports, but also yellowfin lost ground. Indonesia continues to be the main supplier of fresh tuna (mainly yellowfin) to the Japanese market.

In the first quarter of the year, the United States imported some 60 000 tonnes of canned tuna, a 36 percent increase over the same period of 1998. Thailand continues to be the main exporter of canned tuna to the United States market, with 34 700 tonnes in the January-March 1999 period, representing a 48 percent expansion over the 1998 result. Better availability of raw material to Thai canneries and the economic interest of the main US brand marks in the Thai tuna industry were the main reasons for this recovery. The Philippines remained on the second position. The use of tuna loins by Italian canners continues to expand. Loins as raw material now account for about 60 percent of total Italian canned tuna production. Ecuador and Colombia are benefiting from their special duty-free status as Andean pact countries and are increasing their shipments to the EC.

Yellowfin prices on the European market have been declining, as strong arrivals from the Eastern Pacific have been keeping the market well supplied. Mexico has developed into an important supplier of whole tuna to the Italian canneries. In May 1999, prices of whole yellowfin from Mexico reached a low of US$1 300 per tonne, which compares to US$1 800 per tonne a year ago. Tuna loin prices are less subject to fluctuation, as producing companies have generally exclusive contracts with buyers or directly with owners of foreign companies. In May 1999, tuna loins on the Italian market were quoted at US$3 920 per tonne, almost US$1 000 per tonne less than the May 1998 price.

The European and African markets appear dull. Canners are not selling as some distributors in Europe have built up large inventories since last year. Some traders have also accumulated can product during the last quarter of 1998, when raw fish prices in Thailand declined. Tuna prices have started to fall. However, in Bangkok, this is a seasonal phenomenon. Thai canners are covered until June and this will result in a further price decrease on European and African markets. Good skipjack catches are reported from all major areas, which may contribute to a further decline in prices.

Cephalopod fisheries has been good in recent months. As forecast, Illex catches and supplies on the world market were strong in the second quarter of the year. Octopus catches in the Eastern Central Atlantic have been good in the beginning of 1999, leading to higher exports directed to Japan, and lower prices on the world market. This trend is expected to reverse.

Illex catches in the South West Atlantic were plentiful in the first months of the year. In the first three months of the year, the catch off the Falkland/Malvinas Islands reached almost 100 000 tonnes, which is more than in the whole of 1998, and four times the corresponding 1998 figure. On the other hand, Loligo catches in the Falkland/Malvinas area were rather disappointing with 13 600 tonnes landed in the first quarter of the year, 50 percent less than last year.

Japanese squid catches were 368 000 tonnes in 1998, down 41 percent from 1997 landings. 1998 catches of Todarodes pacificus, the Japanese domestic squid resource, totalled 173 000 tonnes, down from 366 000 tonnes in 1997. There are indications that the 1997 record catch of Illex from the Southwest Atlantic will be overtaken in 1999. The Japanese cuttlefish market stayed relatively stable. In the first three months of 1999, Japan imported some 11 500 tonnes of cuttlefish, 10 percent more than in the same period of 1998. The increase came from higher imports from Eastern Central Atlantic countries, with Morocco reporting the biggest increase in shipments.

It is anticipated that Illex prices will collapse in the medium term. The buying interest in Spain, where price levels have remained relatively high, is not expected to absorb the huge quantities of Illex caught in the South West Atlantic. Once the inventories build up in Spain, the Illex price will start to decline, which could lead to a strong downward spiral of squid prices on the world market. A similar situation has already occurred several times over the past years.

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