Greek producers more hopeful as prices firm

Accounting for the cyclical trend that is observed as a result of seasonal harvesting, prices in 2013 were generally lower than in 2012, particularly for bass and especially for Greek product.  However, in March 2014, prices for Greek produced bass and bream on the Italian market were higher than has been seen since the early 2000s. This is good news for farmers in Greece, who are already struggling to cover costs in a difficult credit environment and rapidly losing market share to the expanding Turkish bass and bream industry. However, the Greek aquaculture sector will take some time to recover from one of its worst ever years, as serious cash flow problems continue and banks push to recover their loans. 

Turkish producers have been able to consistently undercut Greek and other European producers by a significant margin, resulting in both established and new markets looking increasingly towards Turkish suppliers. In addition, Turkey appears to be exporting large and growing volumes of fillets, mainly to and through the Netherlands to Northern European markets. This reflects the recognition of Turkish suppliers of the importance of adding value to the product, as well as targeting new markets.

Notable opportunities identified by Turkish exporters are the growing markets in the Middle East and Northern Africa – Lebanon, Libya, Iraq and the United Arab Emirates – which together imported 172% more bass and bream in 2013 compared with 2012, at a 152% increase in value. Meanwhile, Russian imports continue to increase, with a clear preference for Turkish suppliers emerging. In 2013, Russia imported 8 364 tonnes of bass and bream worth EUR 36.9 million, with these figures representing 37% and 30% increases over 2012 respectively.    

In terms of volumes, Greece finished 2013 with a total of 84 400 tonnes of bass and bream exported, worth EUR 381.3 million. Compared with 2012, volume remained approximately flat, but value was down 10%. The major component of the decrease in value was bass, which was down 9% in quantity and 22% in value, although high volumes in the second half of the year also pushed bream price down. 

Italy

Italy remains the most important European market for bass and bream species. However, demand for both has been sluggish for the past two years, with generally declining prices failing to boost volumes. This is a symptom of the wider economic problems in the country, and demand for seafood as a whole can be expected to strengthen once again if cautious forecasts for a return to growth are realized.

Spain

Spanish imports, particularly of bass, increased significantly in 2013, although it should be noted the growth in import volumes is at least partly compensating for a decline in domestic production. Greek producers have managed to increase their share of supply of bream to the Spanish market, but it is primarily Turkey that is behind the boosted volumes of bass. 

France

Over the last two years, the French market has been characterized by rising volumes following a distinct decline in prices.  The full year figure of 18 000 tonnes imported in 2013 is an all time record. As was observed in the salmon market in 2012, increased coverage and promotion at the retail level in France will help to cement underlying demand at a time of excess supply.

UK

Similarly to France, UK consumers have responded positively to the lower price level in 2013, and imports were up 7% by volume. There has been a noticeable shift in the relative shares of supply to the UK market, with the Netherlands and Turkey both increasing theirs significantly at the expense of Greece. 

Germany

The German market continues its positive development, particularly for bream, absorbing higher volumes at stable prices. Turkey is now Germany’s major supplier, with a 39% share of total volume in 2013.

USA

Demand for fresh bass on the US market is growing rapidly. Total imports of 4 300 tonnes of this product in 2013 represents a 64% increase over 2012. Once again, there has been a pronounced shift towards Turkish bass this year.

Imports of frozen bass appear to have risen significantly as well, although the large spike in the quantity of imports from non-traditional origins in November 2013 suggests recording error is the main factor behind this apparent increase. 

Outlook

Judging from juvenile stocking, production over the next few years is likely to stabilize, which should in turn bring some stability to prices and relieve some of the pressure on margins that the vulnerable Greek industry is currently facing. The gradual economic recovery predicted for major markets should also see a parallel strengthening of demand.  However, Greek aquaculture can expect further upheaval as the banks, now majority shareholders in a number of companies, pursue further concentration of the sector. In the longer term, those responsible for implementing EU proposals to expand the aquaculture sector in Europe will have to be mindful of the fact that increased production does not always equate to profits or growth. That is, unless there are accessible markets with strong enough underlying demand to absorb increased volumes at sufficiently high prices to cover production costs.