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Farmed molluscs, such as oysters, have been growing steadily since 1985
Farmed molluscs, such as oysters, have been growing steadily since 1985
FAO/19893/Grepin

Overview

International seafood exports reached US$ 52.9 billion in 1999, a large increase from US$ 35.8 billion in 1990. The share of exports from developing countries has grown from 44 % in 1990 to 49 % in 1999 and net receipts of foreign exchange rose from US$ 10.4 billion to US$ 16.7 billion 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 stabilise 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 helped expand 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 the main producing countries, and since international trade statistics do not distinguish between wild and farmed origin. Thus, the exact breakdown in farmed and wild origin in international trade is open to interpretation. This situation will change gradually, as producers associations emerge in main producing countries and begin to keep records, and in response to various trade regulations/pressures which distinguish between farmed and fished shrimp.

The main traded products from aquaculture in 1999 were shrimp and prawns, salmon and molluscs. Other species showing strong growth in trade are tilapia, sea bass and sea bream.

Commodities

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 decade. Shrimp is already the most traded seafood product internationally, and about 28 % of total production now comes from aquaculture (1999: 1.1 million mt). Since the late 1980s, farmed shrimp has tended to act as a stabilising factor for the shrimp industry. Therefore, the major crop failures in Asia and Latin America during the past years have had an impact on overall supply, demand, prices and consumption trends. Considered a luxury product in most markets, shrimp demand is very dependent upon the economic climate in a country, and consumption and trade in an individual country may show large variations from year to year.

The major markets are Japan, the USA and the European Union (EU), and the largest exporters of farmed shrimp are Thailand, Ecuador, Indonesia, India, Mexico, Bangladesh and Vietnam. Demand for shrimp and prawns is expected to increase in coming years. Asian markets such as China, Korea Rep., Thailand, 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.

Trade in crab species has increased with growing aquaculture production (1999: 103 600 mt).

Finfish

In terms of total aquaculture output, finfish production ranks first with 21.5 million mt produced in 1999, or about 67% of the total production from aquaculture. The major part of this is carps (71% of total finfish production in 1999) which are consumed locally in the producing countries (mainly China and India).

International trade in farmed salmon has increased from virtually zero to close to 1 million mt (2001) in less than two decades. The traded species are mainly Atlantic salmon and, to a much lesser extent, coho salmon, which accounted for 88 % and 10 % of production in 1999 respectively. 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, and Chile is the main exporter of coho salmon and second largest exporter of Atlantic salmon. The EU is the main market for Norway with some 70% of exports and Japan and the US are the main markets for Chile with some 55% and 30% of exports respectively. Norway has targeted Asia as the future growth market in addition to further penetration of the European markets, and the Norwegian salmon farming industry has over the last few years spent almost US$ 150 million on international promotion and advertising.

Chilean producers foresee strong growth in the USA, Latin American, European and Asian markets, with the exception of Japan. Contrary to the Norwegian industry, Chile produces a large amount of fillets, which are sent fresh to the US market. Chile's other main market is Japan.

The global farmed salmon industry is quickly becoming concentrated with a handful of companies present in all producing countries and in all markets and with strong ties to the feed industry.

With increased production volumes, costs and prices have been driven down, and at current levels (US$ 2.60-3.40/kg CIF) salmon has become a relatively medium priced product in international seafood markets.

International trade in trout is much less that in salmon, with exports reaching some 122 000 mt in 1999 out of a total production of farmed trout of 475,000 mt. Consumption is concentrated in trout producing countries, but Norway and Chile have been able to farm particular qualities of large-sized heavy pigmented trout for the Japanese market (Japanese 2001 trout imports: 84 000 mt).

Tilapia

Tilapia is another species which has shown a tremendous growth in output (aquaculture production of tilapia and other cyclids amount to some 1 100 000 mt in 1999). International trade is limited but growing, especially between Central America (Costa Rica, Ecuador and Colombia) and the USA, and between Asian producers (Taiwan PC, Indonesia and Thailand) and the USA and Japan. There is also modest trade between Jamaica and the UK. The biggest exporter, Taiwan PC, supplies Japan with high quality tilapia fillets for the sashimi market and ships frozen tilapia to the American market (2001: exports to US 40 000 mt). Taiwan exports about 70% of its domestic tilapia production. Thailand and Indonesia export less than 5 % of their production. Vietnam has also recently entered the world tilapia market, and China exported 12 500 mt to the USA in 2001. Zimbabwe now also produces fresh and frozen fillets for the EU market.

Tilapia is now the third most imported aquaculture product by weight in the USA (2001: total US imports of 56 300 mt), after shrimp and salmon. USA imports have been strongly increasing and are forecast to increase further in the future. Long-term tilapia prices are expected to decrease and this should lead to greater exports to the USA as well as to Europe, which presently is undeveloped as a market for tilapia.

In Europe, the sea bream/sea bass industry intends to copy the success of salmon growers. Production reached 120 000 mt in 2001, most of which are exported, mainly to Italy and Spain. The main exporter was Greece, with about 70 % of domestic production exported. Italy was originally almost the only export market for Greek production but as a result of market development efforts, Greek exports have now diversified to new markets such as UK, Germany, and France but also Spain for certain sizes. At the opposite end, trade in fingerlings is from Italy, Spain and France to farms in Greece, Malta and Croatia.

As output of sea bass/sea bream has grown, costs have been driven down, and market prices have been reduced to a third during 1990-2002, from US$ 16/kg to around US$ 4-5/kg. The rapid saturation of the market and the parallel rapid decline in prices (60-70 % in ten years, compared to 50 % in ten years in the case of Atlantic salmon) is attributed to the much smaller traditional market for these species (only Southern Europe) compared to Atlantic salmon, lack of diversified products and inadequate market development and promotion. However, the substantial drop in prices of these species is opening new markets and expanding existing ones, although acceptable profit margins can only be sustained at the production end through further improvements in productivity and diversification of products. Like for farmed salmon, the sea bass/bream industry is becoming consolidated and several companies are also now quoted on the stock exchange in Greece and Norway.

American catfish is now the fifth most consumed fish in the USA (0.5 kg/capita edible weight in 2000). Exports are limited as the production is aimed at the domestic market, whereas imports from Vietnam have rapidly gained market share in the American (2001 exports 7 700 mt) and European markets. The reason for the success of catfish is similar to that of tilapia: strong consumer demand for white, easy-to-prepare fillets.

Seaweed

Farmed seaweed production has been growing in the last decade, (7 million Mt in 1999) and is now 88% of total seaweed supplies. Most of output is utilised domestically for food, but there is growing international trade. China, the major producer, has started exporting seaweed as food to Korea Rep. and Japan. Korea Rep. in turn exports some quantities of Porphyry (red seaweed) and under (brown seaweed) to Japan (total Korea Rep. 1999 exports: 14 000 Mt).

The rapid growth in aquaculture production has made the sector important to the economy of many developing countries
The rapid growth in aquaculture production has made the sector important to the economy of many developing countries
FAO/13507

Significant quantities of Eucheuma (red seaweed), are exported by the Philippines, Tanzania and Indonesia to the USA, Denmark and Japan. Total EU imports of seaweed in 2000 amounted to 61 000 mt. Chile is an important extractor, processor and exporter of agar and carrageenen.

Molluscs

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

Farmed mollusc production volumes are fairly evenly split between oysters, clams, mussels and scallops, but international mollusc trade is concentrated in scallops and clams (fresh and frozen). Total fresh and frozen scallop imports have grown from 28 000 mt in 1985 to 73 000 mt in 1999, reaching US$ 552 million. Clam imports have grown from 33 000 mt to 159 000 mt in the same period, valued at US$ 265 million. Mussel imports were showing a downward trend after a peak of 175 000 mt in 1992 to reach 137 000 mt in 1993 and 151 000 mt in 1994. However, in subsequent years mussel imports have been showing an upward trend once again until they reached (1999) the record peak of 212 000 mt or US$ 292 million. Oyster imports have been growing steadily from below 10 000 mt in 1985 to 38 000 mt in 1999, reaching US$ 144 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 PC, as well as in parts of North America and Europe with large Chinese or Asian 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.

Ornamental aquaculture and trade

Annual international exports in ornamental fish are around US$ 200 million, or less than 1 % of total world fish trade. However, the total value of wholesale ornamental trade is estimated at close to US$ 1 billion, and retail trade about US$ 3 billion.

The importance of ornamental fish trade goes far beyond its mere share in international trade. The sector is an important source of income for rural, coastal and insular communities in developing countries, and frequently a welcome provider of employment opportunities and export revenues.

Asia represents today more than 50% of the world supply of ornamental fish. New players such as the Czech Republic and Malaysia are now competing with the traditionally dominant suppliers.

The main importers are the United States (24%), Japan (14%) and Europe, particularly Germany (9%), France (8%) and the United Kingdom (8%). In international trade, in value terms, freshwater species represent about 90%, against 10% for marine species. Freshwater species are mostly farmed whereas marine fish come from the wild. However, marine aquaculture is in strong growth as problems related to the environment and lack of sustainable collection practises make aquaculture a more viable long-term alternative

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 sea bass and sea bream, but 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 brood stock. Documentation of trade in seed will improve gradually as in response to concerns about spread of diseases and the movement of genetic material.

Some Issues Affecting Future Trade in Aquaculture Products

External factors

Environmental and social concerns continue to influence farmed shrimp exports to North America and Europe. The importance of sustainable aquaculture with no or limited externalities are forcing exporting countries to adopt more sustainable production practices. The introduction of Code of Aquaculture Practises and of eco-labelling schemes will further increase this trend, even though the latter so far have mostly focused on marine fisheries. Another factor of growing importance for aquaculture producers is the increasing attention paid to animal welfare issues, biotechnology and use of GMOs, and labour conditions in general in developing countries.

Distribution channels

The growth of modern distribution channels such as super and hypermarkets and the expansion of international retail chains have, in many markets, given an important boost to demand and consumption of products from aquaculture. Important buying requirements to guaranteed quantities and prices as well as promotion activities favour in many instances aquaculture products over wild products. Likewise, advances in production technology has allowed cost and price reductions for many farmed species, and future demand from retail chains is expected to grow further, both in developed and developing countries.

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 led to significant improvements in production processes and product quality. 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 standards) for control as well as marketing purposes.

Labelling

New requirements to consumer information and protection and to labelling and traceability are now being implemented in many markets. The EU introduced new legislation on traceability of foodstuffs, including fish and fishery products from 1 January 2002, allowing marketing of fishery products only if labels include certain data. The labels must now specify if the product is farmed or wild, and country of origin or catch area must be given.

WTO and 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, as do quotas in some countries. This is especially the case in many fast growing economies in Asia, but important markets such as Japan, the European Union as well as the USA all give competitive advantages to domestic producers of many species, especially in the case of processed products. Although average tariffs on imports from developing countries are now estimated at 4.8 %, a cut of 27 % from previous levels, the averages hide numerous cases of tariff escalation on value added products. In addition to leading to inefficient use of economic resources in both developed and developing countries, this factor continues to hinder development of the fishing industry in developing countries.

The new multilateral trade negotiations as envisioned by the WTO Ministerial Declaration in Doha in November 2001 should lead to more trade liberalisation, lower tariffs and fewer subsidies in fisheries. At the same time, growing membership in the WTO will also lead to lower tariffs and more trade. The recent entry of China into the WTO will also impact international trade and in particular, third country processing of farmed and wild products.

Feed

Production of many carnivorous species depends on fish feed with small pelagic species as raw material. For some inputs such as fish oil, about 80 % is now used for aquaculture and this could set a limit for growth in the sector. For this reason, research is now being carried out on alternative inputs in feed such as soybeans for salmon production.

Food security

As the major part of total output from aquaculture is consumed internally by producing nations, aquaculture is an important source of seafood. Aquaculture has also become a significant source of foreign currency to many developing nations as the products exported usually are the more valuable ones and 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.

 
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