GLOBEFISH - Information and Analysis on World Fish Trade

2019 gives way to a more uncertain outlook for 2020

14/02/2020

Global fish production growth is expected to be approximately flat year-on-year in 2019, for a total of 177.8 million tonnes. The fast evolving aquaculture sector continues to follow a steady upward growth trajectory, with farmed harvests estimated to have increased 3.9 percent last year. Most commercially important farmed finfish species, including salmon, tilapia and pangasius achieved solid production gains in 2019, although the picture for farmed shrimp is less clear due to sluggish growth in Asia. The increase in aquaculture production was offset by an estimated 3.4 percent drop in wild catches, largely driven by the steep decline in anchoveta catches in Peru. Elsewhere, supplies of cephalopods have been tight and cod catches have also been limited. Tuna production has been better, however, and supply pressure has been dragging prices downwards. Wild fish now accounts for 45 percent of the fish we eat, and its share continues to decline.

Last year was a challenging one for global trade. The world’s two largest economies, China and the United States of America, have been locked in a trade conflict and progress in negotiations has been slow. The various phases of the Brexit process have been marked by uncertain direction and political tension. Business confidence is suffering and slowdown has been evident in many large economies. The global seafood market is highly sensitive to wider economic conditions, and the combination of faltering demand, tariffs and drawn-out uncertainty took a major toll on international seafood trade in 2019. After 4 percent growth in 2018, total trade value contracted in US dollar terms in 2019, dropping 1.42 percent to USD 160.5 billion, with reduced volumes a relatively more important factor
than falling prices. At the same time, however, a generally stronger US dollar also contributed to a decline in export revenues as measured in other currencies.

World fish prices exhibited exceptional levels of volatility in 2019, due to a combination of supply variability and trade uncertainty. Multi-year lows and highs were recorded for a number of important traded species, both wild and farmed. Atlantic salmon prices fell steeply mid-year before staging a remarkable recovery to reach near-record heights by the end of 2019. In the last quarter of the year, good tuna catches in the Pacific pushed frozen skipjack prices down to levels not seen in a decade. In Viet Nam, record pangasius prices in 2018 served as a powerful catalyst for rapid expansion in the Mekong Delta, but the spiking volumes saw export prices fall back by some 35 percent over the course of 2019. Overall, the FAO Fish Price Index fell by around 10 points from September 2018 to September 2019.

The impact of the US-China trade conflict saw China’s seafood exports take a significant hit in 2019, while US imports also fell. Shrimp producers, such as India and Thailand, also experienced export revenue declines. Combined, Asian seafood exports fell by an estimated USD 1.55 billion in 2019. Brexit-related economic challenges and trade issues also contributed to a general slowdown in seafood trade in the EU28, the world’s largest single market for seafood. In South America, export growth was maintained in 2019, due in large part to a substantial increase in Ecuador’s exports of shrimp to China. China’s recent crackdown on smuggling from Viet Nam has helped boost imports from alternative suppliers.

After a difficult year of supply swings, price volatility, geopolitical tension and economic challenges, the outlook for 2020 is somewhat less uncertain. Although Brexit has finally happened, the precise terms of the UK’s future trading relationship with the EU27 are still not clear. For the most important traded commodities, supply growth is expected to slow or remain steady, and if demand improves this should see prices rise once again. On the downside, the US-China trade conflict is still far from being resolved and the negative impact of the recent 2019-nCoV outbreak on global trade may be significant, particularly in China.

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