April 7, 2021

The COVID-19 global pandemic persisted throughout 2020 in most parts of the world despite the imposition of a range of containment measures. With the notable exception of China, the world’s major economies experienced surging caseloads as the year progressed, dragging down growth and repeatedly delaying the planned reopening of businesses. For the global seafood sector, this has only added to widespread market uncertainty and extended the operational challenges associated with the restrictions, pushing down prices and revenues. At the same time, however, the new environment is driving innovation all along the supply chain as businesses focus their efforts
on developing new products, marketing approaches and sales channels to take advantage of their changing circumstances.

Aquaculture producers have adopted cautious approaches to stocking to reduce their exposure to COVID-19 risks and mitigate financial losses amidst weakening prices, leading to an estimated drop in overall output of 1.3 percent in 2020. Although this figure is yet to be confirmed, it would mark a sharp departure from the consistent 4-5 percent rate of growth observed over recent years as well as being the first annual decline in global aquaculture production in almost 60 years. The severity of the impact and nature of the response of aquaculture producers has varied significantly according to species, however, due to the differences in growth rates, production cycle lengths and market requirements. It is also important to recognize that disruptions to early stages of the production process may take some time to affect market supply for some aquacultured species.

COVID-19 restrictions on movement of people and gatherings, combined with broader market uncertainty, also impacted capture fisheries in 2020. However, the severity and duration of the effects on fishing activities have been highly fishery and region dependent and there was a partial or total resumption of activity in most cases as appropriate protocols were established. The most recently available estimate puts the total drop in wild catches at 0.7 percent for the year. Vessels targeting small pelagics and groundfish out of Norway and the Russian Federation did not experience much disruption while a large proportion of the Mediterranean fleet was confined to port as a result of the pandemic. For fisheries highly dependent on a seasonal influx of workers, such as the North Pacific salmon fisheries, availability of labour was negatively affected by travel restrictions.

Despite some short-lived loosening of restrictions in some countries, for the most part the hotel, restaurant and catering (HORECA) sector has been shut down or operating at heavily reduced capacity in most major seafood markets for the majority of the last year. At the same time, added costs and delays for most post-production processes and at inspection points is inhibiting international fish trade. This has translated into a 5.8 percent drop in the value of global exports of fishery products to USD 152.2 billion, following on the heels of a 2.5 percent year-on-year decline in 2019, when geopolitical tensions centered on the US-China trade war dragged on the market. Meanwhile, traded volume dropped an estimated 3.2 percent in 2020, while per capita fish consumption fell to multiyear lows at 19.8 kg per capita. Declines in trade were recorded across all world regions, including all large suppliers and major markets, reflecting the global nature of the pandemic. However, a recovery of the Chinese market later in the year made up a proportion of the revenue shortfall for some international suppliers, including the large Vietnamese pangasius sector.

The limitations on capacity imposed on restaurants, fish markets and supermarkets, whether total or partial, has created a powerful incentive for businesses to seek alternative distribution channels. At the same time, health concerns together with a need to cut down on logistical costs has fostered the development of distribution networks that minimize the dependence on intermediaries. Contactless delivery of seafood and digital services connecting producers directly to consumer, although already in development prior to the pandemic, have experienced a rapid increase in popularity. Similarly, the shift towards value-added products geared towards convenience and home cooking has been accelerated. These new additions to the global seafood market will endure after the current crisis has subsided, bolstering demand and offering new avenues for further innovation. If the vaccine rollout programme proceeds without too many delays in 2021, the reopening of foodservice together with a revitalized retail sector points to a potential net gain in aggregate demand as recovery continues.
While animal protein production growth is set to resume overall, supply is forecast to be tighter for several fish species, which will lift prices and provide a much needed boost to business margins.