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GLOBEFISH - Information and Analysis on World Fish Trade

European Seabass and Gilthead seabream - October 2013

16/10/2013

Some nervousness in the market as supply may be larger than expected

Despite contracting consumer demand in many markets and tight access to finance making difficulties for importers and distributors, import volumes for bass and bream still remain stable and in some cases are even growing. UK and USA imports were up again, and so were French, German and even Spanish imports of the two species. The explanation in Spain is that imports are generally less expensive than the domestic product and smaller sizes are often imported, making them even more competitive.

Producers have been struggling with higher costs however, especially for feed, with some major farming groups reporting 20% higher feed costs this year. This will eat into margins and probably result in more consolidation within the sector, both in Greece, Turkey and Spain.

Prices

Seabass quotations strengthened during the early summer months, whereas those for bream dropped by around 10% in July. The different price development is surprising, given that both species are reaching market size at the same time. Bass however continues to benefit from a somewhat broader market, including in northern Europe and the USA. 

Supply

Although overall production in 2013 of the two species is expected to decline somewhat, there is still much uncertainty concerning the actual output of the major players, Greece and Turkey. Greece has seen production drop off for some years now, and the industry is consolidating and focusing more on increased efficiency and margins, rather than boosting output. In Turkey, with a more stable banking situation than in Greece and strong domestic demand supporting industry growth, many producers are reportedly scaling up output.

When analyzing the export statistics for the first quarter, this scenario seems to hold, at least for the beginning of the year. Greece saw exports fall 7% to 17 400 tonnes whereas Turkish shipments registered an increase of a massive 70% to reach 7 500 tonnes. 

Markets

Italy: flat sales in Europe’s largest market for bass and bream

Despite a struggling economy and falling purchasing power, Italy’s imports during the first quarter were mostly unchanged from last year, both measured in volume and value. This underlines the important role that these species now play in Italian distribution and consumption and how well placed they are in the mind of buyers and consumers alike. Greece is the largest supplier but Turkey is taking market share in both market segments.

France: rebound after weak 2012

Imports during the first quarter increased, albeit compared with a weak first quarter the previous year. Bream is the preferred imported species with Greece and Spain the major suppliers. France of course has a traditional capture fishery of seabass as well; this is often line-caught and marketed to high-end segments paying prices much above the imported farmed product.

Spain: higher imports but growing exports as well

As in the case of France, Spain registered higher imports during the first quarter compared with the same period in 2012, although volumes remain far below those of earlier years, with a reduction of 20% compared with 2008. Imports from Greece rose significantly, up 45% compared with the average import volume growth of 32%. The imported product for the most part consists of the smaller sizes, the most common being the 300-400 gram size, which cost less per kilo than the traditional Spanish product of 500-600gr. Spanish producers however have intensified their efforts in other markets, seeing higher shipments to France in particular.

UK: market expands as consumers warm to Mediterranean fish

The UK market has shown steady growth for years with import volumes now having overtaken those of the French market. The reason is constant product development in the retail sector and good acceptance in the restaurant segment. The UK also has a number of small domestic fish farmers that target special segments of the bass and bream market with success. At the high end, line-caught bass is supplied by French and domestic fishermen.

Germany: new bounce in imports

The German market continues to grow showing a significant bounce in volumes during the first quarter of 49%. With this most recent positive development, the market has doubled over the last five years. It is imports from Turkey in particular that have risen over the last few years.

USA: steady growth

Although the US market is small, it continues to show good growth. 1 500 tonnes of bass and 200 tonnes of bream were imported in the first five months of the year, most of it fresh product from Greece followed at a distance by Turkey. Volumes were up 35% and 60% respectively. Values were up by similar levels, 37% and 60% as import prices were fairly similar to those of last year.

Middle East: Lebanon on the rise 

For years Turkish and Greek producers have also targeted the Middle East with their products and this is now appearing in statistics. In particular for Turkey, Lebanon has become its largest seabream market with 900 tonnes shipped during the first quarter alone.

Turkey

In Turkey, domestic prices have declined to a level in which wholesale prices have become  dangerously close to production costs or around TRY 8 a kilo (or EUR 3.17/kg). A number of producers would have liked to see some voluntary agreement on production growth in order to stabilize prices but this is not an easy task, neither in Turkey, nor elsewhere. 

The outlook is uncertain as Turkish production this year is reportedly much higher than last year, in particular for bass whereas the output of bream is closer to last year’s levels.

Morocco: produces for domestic consumption only

A few decades ago, a number of farmers in Morocco started producing for export, in particular for the Italian and Spanish markets. The industry however never really took off, having to depend on imported fingerlings and feed, and would sell off most of the production during a few intense months. As a result, most farms ceased operations in the mid 2000s and the remaining producers concentrated on the domestic market. Annual production is estimated at around 250 to 300 tonnes.

Outlook

The traditional markets in southern Europe for bass and bream have proven surprisingly resilient during the crisis and volumes are expected to remain stable or even slightly up after a weak 2012. The newer markets in northern Europe, in Russia, the USA and also the Middle East are all showing promising growth enabling the major producers to lower their dependence on the slower moving markets of southern Europe. Supply is expected to increase in Turkey during the year and this could lead to lower prices in the second half of the year, reinforcing the traditional market weakness in this period but now arising from production coming to market from mid-summer onwards.

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