GLOBEFISH - Information and Analysis on World Fish Trade

Octopus supplies down, improved outlook for illex squid

08/07/2020

Octopus supplies will be tighter in 2020 because of more restrictions on the fisheries in Mauritania and Morocco. The outlook for the squid market is more varied, as good catches have been reported from the Falkland Islands (Malvinas), but fishing in Argentina has been very poor, and Japan has set a very low quota for Japanese flying squid.

Octopus

During the first half of 2019, octopus landings in Morocco and Mauritania were down. Both countries have become more restrictive about octopus fishing in order to protect the resource. In July 2019, the European Union ratified a fishing agreement with Morocco, allowing 138 European vessels to fish for octopus in Moroccan waters. However, this does not mean that there will be more octopus on the market, since there are restrictions on this fishery. The European Union was negotiating a similar agreement with Mauritania.

Trade

The COVID-19 outbreak in Italy and Spain, two of the hardest-hit countries in Europe, has been followed by a slow-down in orders for octopus and squid. Restaurants have been closed down, and most octopus consumption in these countries goes through the restaurant sector. However, buying was slowing down in Spain even before the pandemic. In coronavirus-hit Italy it has been difficult to get deliveries because some truck drivers fear becoming infected with the virus Japanese imports of octopus declined from 2017 to 2018, but have stabilized in 2019 at 42 624 tonnes. The main supplier was Mauritania, accounting for 12 151 tonnes, followed by China (10 134 tonnes) and Viet Nam (7 788 tonnes).

There was a slight decline in octopus imports to the Republic of Korea, from 78 875 tonnes in 2018 to 71 002 tonnes in 2019. The two main suppliers were China (30 064 tonnes) and Viet Nam (27 911 tonnes). Vietnamese exports of octopus to the United States of America rose strongly in 2019, and it was expected that shipments would continue to increase in 2020. The COVID-19 pandemic put an end to that rising trend. Viet Nam, the seventh largest supplier of octopus and squid to the United States of America, has captured market shares from China because of the United States of America – China trade conflict.

Squid

The illex squid fishery off the Falkland Islands (Malvinas) started well this year. The season opened on 15 February and will finish on 15 June. Landings so far have been at the highest levels for five years. The loligo fishery in the same area, on the other hand, has been disappointing, and production is expected to be below landings in 2018 and 2019. The biomass is lower than during the last two years, so a mediocre season is expected.

In Argentina, catches of illex squid have been very bad. As a consequence, prices for illex were rising in the beginning of the season. Argentinian vessel owners sought to have the squid fishery declared as “currently in crisis”. The main reasons for this were dramatic reductions in landings, COVID-19,  and a possible price drop because of the excellent catches around the Falkland Islands (Malvinas). At the end of January 2020, Japan’s Fishery Agency set the TAC for Japanese flying squid (Todarodes pacificus) at 57 000 tonnes, down 15 percent from the 2019 TAC. The season runs from 20 April 2020 to 21 March 2021. In 2019, Japan’s landings of squid fell to 80 percent of the amount recorded in 2018. Lower water temperatures in the East China Sea, increased illegal fishing, and fewer large Japanese squid fishing vessels were the main reasons for this decline. During the past decade the fleet has been halved, to about 60 vessels today.

The Commission of the South Pacific Regional Fisheries Management Organization (SPRFMO) has approved measures to improve the management and conservation of the giant squid (Dosidicus gigas) resource in international waters of the South Pacific. The measures include a requirement to  report monthly catches, install vessel monitoring system equipment, incorporate giant squid fishing vessels in a vessel registry, and increase observer coverage. However, no measures to limit the fishing effort were agreed upon. It is estimated that about 900 000 tonnes of giant squid are caught every year.

Trade

Spanish imports of squid and cuttlefish have been almost flat for the past three years. In 2019, imports amounted to 290 297 tonnes, down 2 percent compared to 2018. The largest supplier was the Falkland Islands (Malvinas), which shipped 79 665 tonnes. Peru came second with 64 305 tonnes and Morocco third with 29 543 tonnes.  US imports of squid and cuttlefish dropped by 18.4 percent to 65 559 tonnes, down from 80 316 tonnes in 2018. Most of this decline was because shipments from China fell by about 15 000 tonnes, to 33 019 tonnes. Despite this decline, China, by far the largest supplier, still accounted for over 50 percent of the total.

Japanese imports of squid and cuttlefish increased by almost 6 percent last year, to a total of 165 219 tonnes. Again, China was the major supplier, with 100 713 tonnes or 61 percent of the total China’s imports of squid and cuttlefish made a big jump in 2019. Imports increased by 69.5 percent, from 229 746 tonnes in 2018 to 389 374 tonnes. But China’s exports of squid and cuttlefish did not increase. On the contrary, exports fell from 521 407 tonnes in 2018 to 484 005 tonnes in 2019 (-7.2 percent). The largest market for China was Japan, which took 21.5 percent of the total.

Other important markets were the Republic of Korea and Thailand. Indian squid traders, who traditionally have exported mainly to Europe, and in particular to Spain, are feeling the competition from Morocco and Mauritania. Last year, Indian exports to Europe declined, and some exporters are now looking for alternative markets, as they do not consider the European market as being good at the moment. Instead, they will focus on China. But other Asian countries are also interesting, including Thailand and Malaysia.

Outlook

Octopus supplies will probably be tighter in the coming months, and prices are expected to rise again. However, the COVID-19 outbreak has slowed down consumption dramatically, and it is not foreseen that the pandemic will be over by the European summer holiday season. Tourism will be severely down, and consequently demand for octopus will be very poor in Europe. The same goes for squid. The outlook for this season’s fishery around the Falkland Islands (Malvinas) is good, and prices have come under some pressure. Still, demand may dwindle because of the pandemic and the sector is in for a very difficult second half of 2020. As China seems to have the COVID-19 pandemic under control, Chinese demand for cephalopods may increase again. But prices are likely to fall.

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