The tilapia market has so far survived the COVID-19 pandemic with relatively little damage in comparison to many other species, due to its strong presence at retail and China’s recovery. Its steady gains in terms of global whitefish market share are forecast to continue in 2021.

Production

Statistics presented at the Groundfish Forum in October showed clearly how the tilapia sector’s steady growth over the last few decades has seen the species capture a majority share of the international whitefish market. In 2020, tilapia harvests were estimated at 6.93 million tonnes, around 40 percent of the combined production of the most important commercial whitefish species, namely tilapia, Alaska pollock, cod, pangasius, haddock, hake, bass and bream. This is approximately on a par with 2019 production, a break from the sector’s long-term growth rate of 5-6 percent per year.

In China, the largest producer and exporter of tilapia, harvests dropped around 3 percent in 2020 from 2019. This decline was due to a slowdown in farming and processing activities on top of a sharp reduction in domestic demand as the COVID-19 crisis developed in early 2020. Slight declines have also been observed in the other large Asian producers, including Indonesia and the Philippines. The total drop in Asian output was around 1.3 percent.

Asia’s total contribution to global tilapia production stood at some 66 percent in 2020, or 4.55 million tonnes, but growth elsewhere has been more rapid and the continent’s share is declining. Production in the Middle East, Africa and Latin America, meanwhile, increased marginally in 2020 as sector development continued. African production is primarily destined for domestic consumption and remains concentrated in Egypt, but the sector is expanding in Sub Saharan regions.

Tilapia production in the Americas reached 947 000 tonnes in 2020, with Brazil accounting for around 500 000 tonnes of that total. Brazil has doubled its production in a mere 5 years, propelled by the proximity of a huge domestic market and a powerful agricultural infrastructure. Colombia, Mexico and Honduras are the leading Latin American exporters, and their growth has been the catalyst for investment elsewhere on the continent.

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Nicaragua recently established the country's largest semi-intensive production and processing plant for tilapia, creating 200 jobs. The plant has 40 ponds and tanks, and capacity to export around 272 tonnes every six months.

Markets and trade

As a cheaper alternative to many competing seafood options, and a product that is already well-established
at retail, tilapia was well-positioned to capitalize on the shift in consumer purchasing behaviour that took place as the pandemic developed. Home-cooking increased in popularity at the expense of foodservice, while at the same time consumers reduced the frequency of their grocery shopping. This in turn gave a boost to demand for pre-packaged and value-added products, including tilapia. In the United States of America, the largest market for imported tilapia, consumption remained relatively steady despite a temporary drop in imports from China, as plentiful frozen inventories made up the shortfall. By the second quarter of 2020 Chinese supply had recovered and US tilapia imports actually increased year-on-year in the first nine months of 2020 compared with 2019, to
141 000 tonnes (+18 percent) worth USD 460 million (+6 percent). The bulk of this volume is accounted for by frozen fillets from China, which had to offload some excess supply due to its own domestic market contraction.

In Brazil, stakeholders are pushing for increased production to supply domestic consumption, which grew by 27 percent during the pandemic, as well as a developing export industry targeting the United States of America, Asia and Middle East. Brazil has been locked out the European Union’s seafood market since 2017, however, following a critical report from EU food safety inspectors. Elsewhere in Latin America, Colombia exported 7 100 tonnes of tilapia worth USD 36.9 million during the first 9 months of 2020, up 47.4 percent in volume and 20.5 percent in value. The main driver of this increase was higher sales in the United States of America (96.1 percent of the total tilapia exports by Colombia). Remaining exports were sent to Peru, the United Kingdom of Great Britain and Northern Ireland and Germany. Colombian tilapia sales have been absorbing share in that market and fresh tilapia is currently the key product.

Honduras exported 7 500 tonnes of tilapia fillets worth USD 48 million in the first nine months of 2020, an increase of 13.5 percent and 17 percent respectively, compared with the same period of 2019. Meanwhile, the government continues to assess the damage to the tilapia sector caused by hurricanes Iota and Eta and plan for reconstruction.

Almost all tilapia produced in Ecuador is exported, so trade figures almost represent production.

During the first nine months of 2020, 552 tonnes of tilapia worth USD 2.6 million were exported to the United States of America. These figures represent declines of 6 and 7 percent respectively, continuing the downward trajectory observed in the last five years.

Prices

The combination of additional supply from China and the evaporation of foodservice demand pushed down tilapia import prices in the United States of America in the course of 2020. In the first nine months of the year, Cost, insurance, and freight (CIF) prices for imported frozen fillets from China averaged USD 3.27 per kg, down 12 percent from the same period in 2019. In China, wholesale prices (whole, live, DAP Guangdong) fell as low as CNY 5.82 (USD 0.83) for 300-500 g fish in July, but subsequently recovered later in the year. Over the same timeframe, US fresh fillet prices (CIF) from Latin America fell 5 percent to USD 5.64 per kg.

Outlook

The global tilapia sector is set to resume growth in 2021, increasing output by some 5 percent to reach 7.3 million tonnes. Assuming the COVID-19 vaccine rollout does not encounter any severe setbacks, it is reasonable to predict a reopening of foodservice in most countries by the end of the year, although the economic impacts from the pandemic will persist for some time. Returning demand should prevent any significant price declines in 2021 but the market is well-supplied and there is not likely to be much upward price pressure either. China’s growth will continue to slow relative to competing producers in Latin America, Africa and Southern Asia. Brazil, in particular, is expected to play a more prominent role in tilapia international trade, with authorities forecasting a
100-150 percent increase in the country’s exports in 2021.