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GLOBEFISH - Analysis and information on world fish trade

Prices up for key species as improving economic conditions revitalize seafood demand

28/09/2017

The report analyses the market situation until June 2017.

Global production of fish and fishery products is expected to expand by 1.1 percent in 2017, a slightly accelerated rate of growth when compared with the equivalent figure last year. The difference is largely accounted for by the end of El Niño and the associated recovery of catch volumes for certain fisheries, particularly the anchoveta fishery in South America. Aquaculture production, meanwhile, is forecast continue to grow at a similar rate to last year. According to recent OECD-FAO projections, this sector is set to account for the majority of all production (including non-food uses) by 2022. Driven by robust demand growth worldwide, a substantial proportion of global production will be exported, with the value of world trade in fish and fishery products expected to increase by a projected 5.8 percent to US$150.9 billion in 2017.

Key macroeconomic indicators in multiple world regions are showing positive upward trends in 2017, reflecting a slow but steady recovery in economic growth after a long period of sluggish performance that has seen interest rates drop to ultra-low levels. As income growth is strongly positively correlated with increased consumption of animal protein, including seafood, this translates directly into increased demand for seafood across the world. Although production has also risen, this demand growth is having a relatively stronger upward effect on prices than the increased supply volumes are having in the opposite direction, pushing the FAO Fish Price Index up by 7 points year-on-year as of April 2017.

Higher prices for salmon, shrimp, tuna, small pelagics - particularly mackerel - and the miscellaneous category 'other fish', are behind the increase in the FPI. The sub-indices for these species groups increased by 22, 11, 8, 32 and 9 points, respectively, over the same timeframe. In the case of salmon, booming global demand and continuing tight supply following algal bloom mortalities in Chile have pushed prices up to record levels. For shrimp, good demand in both Western markets and Asian markets have offset production increases. For tuna, new management quotas and poor catches are behind the price rise, while cephalopods and bivalves are primarily responsible for the increase in the other fish category. White fish was the only species category for which aggregate traded prices have declined (-5 points), caused primarily by weak demand in major markets for pangasius and tilapia.

Of the world's major seafood exporters, India and Chile are expected to be the standout performers in 2017. In India's case, bumper harvests of aquacultured vannamei shrimp are the main factor in the expected US$2.3 billion (+41 percent) increase in Indian seafood exports in 2017. For Chile, a combination of a recovery in salmon harvest volumes and the high price level for salmon products will equate to a projected rise of US$1.6 billion (+30 percent) in export value. Ecuador (primarily shrimp and tuna), Peru (primarily fishmeal and fish oil) and Norway (primarily salmon, groundfish and small pelagics) are also forecast to see substantial increases in exports this year. On the importer side, both developed and developing markets are expected to perform well in 2017. Significant import growth is forecast for the South East Asian emerging markets in particular, while the traditional "big three" of the USA, the European Union (EU) and Japan will all see seafood demand boosted by improving economic conditions.

The broadly positive start to 2017 for world seafood markets can be expected to continue into the second half of the year, although an increase in supply volumes for shrimp, salmon, fishmeal and fish oil is likely to exert some downward pressure on prices for these widely traded fishery products. In other developments, the curbing human rights abuses in the seafood industry, the reduction of pollution from plastic waste, the conservation of fish stocks and the impact of climate change were all highlighted as key areas of focus at the recent United Nations Ocean Conference in New York, which took place over five days from June 5 to 9 this year. At the conference, governments, United Nations bodies, non-governmental organizations (NGOS) and private sector made over 1 000 voluntary commitments relating to a range of objectives falling under Sustainable Development Goal 14 - to conserve and sustainably use the oceans, seas and marine resources.

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