Seabass and seabream prices in free fall - Contrary to expectations, bass and bream prices have fallen in September and October. Although demand is up from the more quiet months of summer, supply is also up with an impact on availability and current market prices. To a large extent, it is the cash flow situation in the most exposed companies in Greece that has forced early harvesting with added volumes coming to market. Demand is expected to pick up in the last quarter but with no large effect on prices.

Because of low prices, in both Greece and Turkey the main producers and exporters have curtailed production in 2009. Unfortunately prices have not been much boosted by this as many cash strapped companies have harvested early with more supply coming to market than previously expected. This could lead to much lower volumes in 2010. The sector is still being threatened by unreliable production and trade statistics, making it difficult for both producers and policy makers to analyse the situation correctly, and to respond adequately.

Although the linking of supply to demand is notoriously difficult in all farming sectors, whether terrestrial or aquatic, the bass and bream sector has been shown to be especially challenging in this respect. Large swings in production have caused similar cycles in prices with increased risks for producers as a result. On the whole, the sector remains fragmented despite some concentration in Greece and Turkey, and concerted marketing efforts or product development has proven to be difficult. The main markets for bass and bream, Italy, Spain and France remain conservative in their food chains and the preferred product form continues to be the portion sized fish.

Markets could be worse

Italy, the main consumer of bass and bream in Europe and the largest import market as well, saw a lift in import volumes during the first semester of 2009. In fact, volumes rose from 2008 levels and even exceeded those of 2007. One reason for the relatively high demand  in Italy, is that despite the drop in economic output, overall private consumption has fallen by much less. Greece continues to be the principal supplier to the Italian market, followed at a distance by Turkey.

Spain: difficult times

The severe economic crisis in Spain with unemployment edging towards 20% has had a dramatic impact on all sectors. Fish consumption and fish imports are no exception and Spanish seabass and seabream imports fell in the first six month period of 2009 in both value and volume for both species.

The outlook for the Spanish market is still bleak as most consumers expect times to become worse before an economic turn-around hopefully next year. Spain also has its domestic production of bass and bream as well, and domestic producers are likewise suffering from the weak demand.

France: resilience and growth

The French seafood market is surprisingly strong. Just as farmed salmon imports continue to grow, so do seabass and seabream although at much lower volume levels. Whether or not this reflects a general phenomenon in which farmed products are more resilient than wild products during a recession remains to be ascertained.

 UK: small but growing

One of the few markets for bass and bream developed outside the Mediterranean areas is the UK. The long-term growth trend has been positive and the product is making in-roads in both the restaurant segment as well as in the retail sector. The UK market is in general more geared towards value-added products than Continental Europe, and one reason for the success of bass and bream products in the UK is the introduction of chilled pre-packed fillets by Greek companies.

Short term outlook bleak

The outlook for the bass and bream sector is not so good in the short-term although rising demand in 2010 should have a positive effect on prices. Likewise, a cutback on production in Greece and Turkey in 2010 should also limit supply to some extent and boost prices further.

Low prices during parts of the year caused problems for many producers in Greece, Turkey and Spain, and weak cash balances have put pressure on many companies to sell early, thereby increasing supply but also reducing production yields and profit margins. A cutback on production in most producer countries is likely with prices flattening out and rising somewhat next year. Whether the much heralded concentration in the industry will take place remains to be seen as so far, only very few of the small and most exposed companies have been allowed to fold, or absorbed by the larger ones.