Greek producers welcome higher prices in 2014 but remain wary of Turkish growth.

Prices and Supplies

In the first quarter of 2014, tighter supply from Greek, Italian and Spanish farms saw prices rise steeply, before stabilizing in late March. In general, bream prices for major European markets have been somewhat weaker than bass prices – particularly in France - although in most cases average year-to-date levels for bream are still above those of last year. Despite the improved situation, however, there is some concern that the increasing volumes of Turkish fish hitting the markets is exerting downward pressure.

In contrast to other producers, Turkish farmers continued to pursue an aggressive growth strategy, which once again saw significant year-on-year increases in production and export volumes in the first quarter (see section on Turkey below). The Turkish industry is combining rapid expansion with its price advantage over Greek products to establish itself as the number one supplier, a position that analysts expect to be cemented in 2015. The steady depreciation of the Turkish lira versus the euro has aided exporters over recent years, while subsidies and lower labour costs have also contributed to the lower price of Turkish fish, allowing exporters to consistently undercut European producers on international markets.  

Meanwhile, in Greece, aquaculture companies see it as essential to keep prices above EUR 5 per kg to protect the fragile margins of the still reeling industry. Of the major players in the Greek bass and bream sector - Nireus, Selonda, Dias and Andromeda – Dias is in voluntary bankruptcy as it seeks to reach a deal with creditor banks while Selonda is now under bank control. Calls for consolidation of the sector have been met with some resistance, and a number of merger proposals have fallen through. The Greek marketing strategy continues to focus on the relatively higher quality of Greek product and the preferences of the core markets of Italy, France and Spain, but innovation will be needed to create value and retain market share.

Turkey

Following the upward price trend in the Turkish bass and bream industry in the first quarter of 2014, prices in the second quarter have stabilized. Industry sources believe that this stability is likely to continue in coming months due to more balanced supply and demand. A very small upward trend was observed in some size categories.

Turkey is still reacting to the economic crisis in the Greek bass and bream industry, with the limited Greek supply of large-sized fish (400–600 g +) now being partially fulfilled by Turkish producers. Whereas previously the market for large-sized fish was dominated by Greek producers, forcing Turkish producers to sell large sizes at low prices, Turkish producers are now finding new opportunities and markets especially for large-sized fish, readjusting their production planning in order to lead to a larger fish harvest size. This situation has contributed to the more balanced supply and demand situation, as well as the price stabilization.

Based on figures by Aegean Union of Exporters (Ege İhracatçılar Birliği) during April and May of 2104, 4 631 tonnes of bass and 3 433 tonnes of bream have been exported as fresh/chilled or fresh/frozen fillets from Turkey. For both bass and bream, fresh/chilled fish dominated exports, representing nearly 74% for bass and 90% for bream. The average export price for fresh/chilled bass was USD 6.27 while that of fresh chilled sea bream was USD 6.09.

Italy

Two noticeable trends currently characterize the Italian bass and bream market. One is the overall decreasing trend in import volumes which, combined with flat production, is currently supporting a higher price level. This increase in prices is not uniform across sizes, however, and in May it was mainly smaller sizes boosting prices, while larger sizes were weakening. The other notable development is the steadily increasing Turkish share of Italian supply, a shift which is mirrored in all major European markets.

Spain

An improvement in Spain’s economic fortunes and the associated effect on private spending appears to be positively affecting the bass and bream markets. Increased imports have seen greater volumes of both bass and bream passing through wholesale markets at significantly higher prices than last year, pointing to strengthening consumer side demand. As in other cases, the proportion of fish originating in Turkey is increasing rapidly, while imports from France are also up this year.

France

The bass and bream market in France appears to be somewhat sluggish, particularly for bream. For the most part, bream prices have failed to surpass those of 2013, as an early year increase in supply exerted downward pressure. The French market continues to largely ignore Turkish fish – although Turkey’s small share of supply is slowly increasing - instead focusing on Greek and Spanish product.

UK and Germany

Both the UK and German market are experiencing higher prices for both species as supply tightens and import volumes drop. Greek suppliers have again seen their share of supply to these markets drastically cut, and replaced to an extent by Turkish fish. In Germany’s case, Turkey is now the main supplier by some distance, while the same can be said In the UK’s case if Netherlands re-exports of Turkish fish are included.

USA

The US market for bass continues to grow, although that for bream is much smaller and stagnating. Bass in the USA is primarily supplied by Greece, but as in other markets, Turkey is catching up fast. Import unit values for both Greek products are approximately stable in 2014 compared with 2013, in line with the general trend, but the price of Turkish-origin imports appears to have fallen slightly. Overall, however, rapidly increasing import volumes with a minimal decrease in price points to strong demand growth for bass in the USA.  

Total US imports of fresh bass for the first five months of 2014 reached 2 100 tonnes valued at USD 17.9 million, up 47% and 48% respectively from the same period the previous year. Fresh bream imports were flat at less than 200 tonnes.

The Russian Federation

The Russian Federation continues to be a growing emerging market for bass and bream and like other major European markets, is led by a gaining market share from Turkey. Indeed, since 2012, Turkey has been the largest supplier of bass and bream to the market of the Russian Federation, increasing its share each year.  According to the Russian Federal State Customs, from January to July 2014, The Russian Federation had imported 3 246 tonnes of fresh bass and bream (51% bream and 49% of bass), with Turkey responsible for 90% of this supply. In contrast, the imports of fresh bass and bream from Greece during this time period went down to only 226 tonnes. Similar to Turkey’s success in other countries, lower transportation costs, high quality and competitive price are the main factors behind the success of the Turkish suppliers in The Russian Federation.    

Outlook

Much reduced or possibly flat production growth this year is expected to maintain prices at a relatively higher level than last year, and in general the market should be more stable. However, in the longer term, the industry as a whole, and Greece in particular, will have to adapt to the changing dynamics of seafood markets. Consumers are increasingly demanding in terms of convenience, with value addition now necessary to access new markets. Coordinated common marketing strategies, which have been met with notable success in the salmon industry, are also a possible new direction for the sector, with or without consolidation at the company level. There is also a need, recognized by the private market research firm Kontali, to improve data collection at all points in the supply chain, so as to better allow for advanced business planning and more effective policy formulation, implementation and monitoring.