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GLOBEFISH - Analysis and information on world fish trade

Tight supply situation continues

14/01/2019

Supplies of both octopus and squid are getting tighter. There is now an urgent need to improve the management of these resources. Overfishing on the high seas and in areas adjacent to national Exclusive Economic Zones (EEZ) is becoming a serious problem. Demand is rising globally, and prices are going through the roof.

Octopus

The 2018 start of the Moroccan octopus fishery was delayed by one month, until 1 July, due to the high presence of juvenile octopus in some areas. The Moroccan Fisheries Directorate expressed concern about the difficult biological situation of this fishery and the alarming decline of the resource. By delaying the start of the fishery, authorities hoped to improve the condition of this resource. Due to this action and the general scarcity of octopus, prices have been going up.

In spite of this delay, the quotas for the 2018 season were only slightly below the 2017 quotas. The quota for octopus frozen at sea was set at 8 190 tonnes, for coastal trawlers set at 1 430 tonnes, for artisanal fishers in Dakhla set at 3 380 tonnes, and for the artisanal fishers in Boujdour set at 800 tonnes. Thus the total quota for 2018 amounted to 13 800 tonnes, compared to 14 000 tonnes last year. This does not mean that one may expect this amount to be landed. Last year, the offshore fishery only managed to land 48 percent of its quota, the coastal fishery 69 percent, while artisanal fishers landed 99 percent of their quota. 

Trade

Octopus prices have been high in all landing areas in Morocco, Mauritania and Spain. Landings have been relatively low. Some of this can be attributed on unfavourable weather conditions. Moroccan octopus prices have been rising, as the growing demand worldwide has not been met due to falling supplies both from North Africa and the Mediterranean. Demand continues to grow in the United States of America and it is strong in Japan and Europe.

The high prices have had an effect on consumer behaviour in southern Europe. Consumers have started to buy lower quality octopus at a cheaper price because of reduced purchasing power. High quality octopus has become a luxury product for example in Spain, and frozen product is consequently difficult to find in stores. Some Spanish retailers have stopped carrying octopus altogether because of the risk of being stuck with unsold product.

The supply shortage is clearly reflected in the trade figures. Japanese imports of octopus during the first half of the year dropped to 20 700 tonnes, 26.1 percent less than in the same period in 2017. The biggest declines were in Morocco and Mauritania supplies, which decreased their exports to Japan by 49.8 percent and 36.3Imports into the Republic of Korea declined to 33 900 tonnes, down 8.5 percent compared to the same period in 2017. This decrease was accounted for by its largest supplier, China, which delivered 14 800 tonnes, some 17.8 percent less than in the same period last year. The elevated octopus prices have forced some small and medium operators out of the market because the margins have become too slim. Last year, octopus prices hit a high point and they have continued to rise since then.

The elevated octopus prices have forced some small and medium operators out of the market because the margins have become too slim. Last year, octopus prices hit a high point and they have continued to rise since then. 

Squid

Squid has become an increasingly important species in the global seafood market in recent years. Squid catches increased from 3.1 million tonnes in 2000 to almost 4 million tonnes in 2015, but then dropped to 2.8 million tonnes in 2016, causing experts to worry about the state of the resource. During this period the prices have risen dramatically.

Some of the biggest industry players are now joining forces to see what can be done to improve squid fisheries management. One of the problems is that the three most important squid species (jumbo flying squid, Argentine shortfin squid, and Japanese flying squid) all span national EEZs as well as the high seas. This allows vessels to fish for these species on the high seas where no quotas are enforced, which results in overfishing and the possible depletion of the resource.

Twenty percent of global landings of squid are from distant water fleets, mostly operating off the coasts of South America. Only the US East Coast fishery for longfin loligo squid has been certified as sustainable by Marine Stewardship Council (MSC). Squid may become a scarce and very expensive commodity in the future, unless all the major players in this sector reach some agreement. The Technical Commission of the Maritime Front in Argentina banned all squid fishing in the common fishing zone between Argentina and Uruguay since 31 August. The reason given was to protect the resource. There have been concentrations of juvenile squid in the area and by closing down the fishery, the Commission hopes to allow the resource to recover for future seasons.

Chilean authorities have taken an initiative to limit the giant squid fishery by introducing regulations on fishing gear for this species. Fishing of the species Dosidicus gigas or giant squid can only be done with the use of a jig (group of hooks joined together) and/or a hand line. Other types of gear are prohibited in order to protect the resource, according to the Commission of Maritime Interest, Fisheries and Aquaculture. The Chilean government announced in early August that it would propose a 25 percent increase in the giant squid quota. Of this quota, 80 percent is allocated to artisanal fishers, while the industrial sector gets the remaining 20 percent.

Also in Peru, there is apprehension about squid resources. The Instituto del Mar del Perú  (IMARPE, the Peruvian fisheries research institute) has taken steps to develop new stock assessment models as part of the work to improve the sustainability of global squid stocks. In particular, there will be a focus on the jumbo flying squid, as this species is the most important squid species for the Peruvian squid fishery, as well as for the global squid market.

In late August, the Argentine undersecretary of fisheries said the country would not issue new squid fishing permits to Chinese vessels. He explained that the resource is not biologically fit to support more vessels to participate in this fishery. The Chinese are eager to source squid for their domestic market, but they nevertheless rejected a proposal to lower export tariffs for Argentine products to China. 

Landings of Japanese flying squid (Todarodes pacificus) have been next to zero this season. Normally, the season runs from July until October, but as of the beginning of September, almost nothing had been landed in Chinese ports. The fishery in the Yellow Sea and the Sea of Japan has been in decline for the past 3–4 years, but this year catches have dropped dramatically. As a consequence, prices are very high. Some Chinese traders have tried to use the Argentine short-fin squid as a substitute. However, consumer acceptance is slow. The Chinese consumer is not used to this species, which has not yet been well accepted by the market. But the test marketing continues.

Trade

China is now the major exporter of squid and cuttlefish in the world. During the first half of 2018, China’s exports of squid and cuttlefish amounted to almost 250 000 tonnes, up by 3.2 percent compared to the same period in 2017. Japan, the largest market, imported 8.4 percent less than in 2017 (46 400 tonnes), while the Republic of Korea increased imports by 162.4 percent (44 000 tonnes).

China imported 26.7 percent more squid and cuttlefish (152 000 tonnes) during the review period than in 2017. Argentina, the main supplier, increased shipments to China by 87 percent to 43 000 tonnes. Indonesia also increased exports to China by a massive 73.7 percent to 33 000 tonnes. There have been slight increases in US exports of squid and cuttlefish to China amounting to 10 900 tonnes (+6.9 percent) during the first half of 2018. This is expected to decline during the second half of the year because of the new tariffs.

Spain increased squid and cuttlefish imports by 6 percent to 153 600 tonnes, while US imports increased by 1.1 percent to 17 700 tonnes.

Prices

Prices for squid have been rising sharply over the past two years, mainly as a result of the decline in landings in 2016 and in 2017, but also because of strong demand. In general, cephalopod prices have doubled in two years. In early 2018, there was a slight downward correction, mainly in connection with the first fishing season (March–April) in the Falkland Islands (Malvinas), where landings were good. Nevertheless, the Argentine Illex squid season was short and not very good this year, which brought squid prices back up. At the same time, fishing for Illex squid in international waters has not been very good, pushing prices further up. With the state of the resources being what it is, and demand still growing, one must expect very tight supplies and rising prices also for squid.

Outlook

Octopus demand continues to grow, while supplies continue to be tight, translating into higher prices. The situation is similar or even worse for squid. Judging by landed catches over the past few years, it appears that during this period the stocks have been reduced. Supplies of squid will be falling short of demand and prices will be high.

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