GLOBEFISH - Information and Analysis on World Fish Trade

Global landings expected to grow by 4 percent in 2020

08/07/2020

Total landings of small pelagics are expected to increase by about 4 percent in 2020 compared to 2019. But there will be some variation between species. Mackerel supplies will go up, while supplies of herring and anchovies will decline. The overall effects of the COVID-19 pandemic are still unknown but it is expected that they will be considerable, also in the small pelagics sector. Purchasing power will be reduced for many people, and this may lead to consumers purchasing more cheap products like small pelagics.

Total production of small pelagic is expected to be 21.2 million tonnes. Supplies for human consumption are expected to be about 4 percent higher than in 2019 at about 9.7 million tonnes. The main reason for the increased supplies is the higher quotas for mackerel and anchovy. Atlantic herring, on the other hand, will have a smaller quota in 2020.

In recent years, the pelagic sector has tended to overfish the quotas considerably. Mackerel was overfished by 14 percent in 2014, but this increased to 33 percent in 2019. The Norwegian spring spawning herring quota was overfished by 35 percent in 2019, and blue whiting quota was overfished by 29 percent in 2019.

Mackerel

Based on recommendations from the International Council for the Exploration of the Sea (ICES), the total quota for 2020 was set at 922 064 tonnes, a 20 percent increase from 2019. Iceland set its mackerel quota unilaterally at 16.5 percent of the total ( i.e. 152 000 tonnes), up from 142 000 tonnes in 2019. Mackerel consumption in both Japan and the Republic of Korea is rising. In Japan, consumption in 2019 amounted to 315 000 tonnes, up 2 percent compared to 2018. In the Republic of Korea, consumption of mackerel reached 115 000 tonnes. This was slightly up compared to 2018, but down compared to 2017. Both countries are seeing a decline in domestic production, and consequently the need for imports is growing.

Chinese imports of frozen mackerel increased from 141 280 tonnes in 2018 to 150 116 tonnes in 2019. The main supplier was Norway, which accounted for 55 509 tonnes or 37 percent of the total. Both Norway and the Russian Federation showed moderate increases in shipments of frozen mackerel to China (+3.3 percent and +9.6 percent, respectively), while Ireland increased its exports to China by 33.1 percent to 15 754 tonnes.

Herring

The Atlanto-Scandic herring fishery will likely lose its Marine Stewardship Council (MSC) certification in 2020. Countries fishing for this herring have failed to agree on a total catch and instead have set unilateral quotas, which combined exceed the advice from ICES. The North Sea herring fishery has MSC certification and is not likely to lose it, so herring from this fishery would be able to command a premium price compared to the Atlanto-Scandic herring.

The herring fishery in Norway was off to a promising start in January 2020. Total landings were 180 778 tonnes, compared to 169 459 tonnes in January 2019 (+6.7 percent). Prices were also up a bit, from NOK 4.02 per kg in 2019 to NOK 5.47 per kg in 2020. Herring consumption in Europe is falling, with levels reportedly down for all European countries. In particular, young people are staying away from herring altogether. In Germany, however, consumption is falling in all age groups, while in Poland consumers above 50 are still finding herring attractive. High prices may be one cause, however, there has been a general shift away from herring over the years.

Demand for herring roe from Japan and other Asian countries is very strong. Consequently, demand for herring among the processors is very good, and competition for raw material is fierce because the capelin fishery has been stopped for 2019 and 2020 in the area around Iceland and in the Barents Sea. Iceland and Norway have no capelin quotas for 2020. Therefore, Asian buyers who usually buy capelin roe, have to settle for herring roe at the moment.

Capelin

In late February 2020 an Icelandic vessel reported that it had found large amounts of capelin off the east coast of Iceland. The Marine Research Institute sent a survey vessel to the area and estimated almost 90 000 tonnes of capelin in the area. However, these findings have not resulted in any changes in the quota advice, and the capelin fishery is still closed.

With no capelin quotas in Iceland or in Norway for 2020, prices for capelin products still in storage are likely to rise. The most valuable product from capelin is its roe, and Icelandic export prices of capelin roe soared last year, from about EUR 4.50 per kg in January 2019 to just under EUR 10.00 per kg in September 2019. Icelandic exports of capelin to Japan dropped in 2019 compared to 2018. Exports of total capelin declined from 22 891 tonnes in 2018 to 7 272 tonnes in 2019. However, exports of capelin roe fared somewhat better, with exports falling from 10 993 tonnes in 2018 to 7 625 tonnes in 2019. The outlook for 2020 is very bleak, as no capelin is allowed to be caught in Iceland.

Anchovy/Sardines

The second Peruvian anchovy season of 2019 was closed on 15 January 2020, with just 36 percent of the quota or just over 1 million tonnes caught. The Maritime Institute of Peru (IMARPE) initiated a survey to determine the status and biomass of the anchovy resource. This study is essential in order to set a new quota for the new season.

Outlook

During the North Atlantic Seafood Forum in March, two possible scenarios were presented for the pelagic sector. If the practice of overfishing the quotas continues, this may lead to stable or slightly reduced quotas, lack of Marine Stewardship Council (MSC) approval, no new markets in Europe, and relatively stable prices. However, if coastal states reach an agreement for sustainability, the quotas will be reduced considerably during the first year, and then gradually increased in later years. This would lead to higher prices and MSC approval.

With demand for herring falling in Europe, and the Russian market still closed to European producers, the outlook for herring is one of declining supplies but also declining prices. For mackerel, the picture is very different. Supplies will increase, and demand from Asia is also going up, so normally one would expect to see prices either staying level or going up. But the effects of the COVID-19 pandemic are still unknown.

Although the worst seems to be over in China and to some extent in the Republic of Korea, a more dramatic situation is expected in Europe and North America. No capelin available for roe production will make capelin roe extremely expensive, if any can be found. Consumers will shift to herring roe instead, so the price for this commodity should also go up. The lack of capelin for reduction purposes (fishmeal and oil) seems to have little effect on the price of fishmeal and fish oil. Poor landings of anchovies by Peru during early  2020 are likely to have a more significant impact on those prices.

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