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GLOBEFISH - Information and Analysis on World Fish Trade

Bass and bream: relative stability of 2015 can serve as platform for development

15/02/2016

After a long period of low prices, high costs and near bankruptcy for many bass and bream companies, improved prices in 2015 have brought renewed confidence to the industry. With this stable period expected to continue, there is now a valuable opportunity to invest in much-needed technological innovation and product development.

Supply
The prevailing trends in the bass and bream market in 2015 have been lower supply and higher prices for bream, while for bass there has been generally flat supply with only marginal increases in prices in some markets. These price gains have been sufficient, however, to sharply reduce losses amongst the major Greek aquaculture companies and in some cases even push margins back into the black. Greek banks, now the major shareholders of these companies following recapitalization, are already actively seeking investors.

At the same time, many industry representatives are emphasizing the need for the industry to work together in consolidating the improved market situation through collective investment in research and development and cooperate in expanding the market base of their products. Data collection, improved feed management and formulas, broodstock selection and conditioning as well as animal health have all been identified as key focus areas at the farming level. On the market side, there have been calls to diversify the product range and to more closely align its characteristics with today's consumers' preferences for healthy, sustainable and convenient seafood.

Greek bass and bream export volumes in 2015, based on available statistics for the first nine months of the year, remained well below those of 2014, although this was almost entirely accounted for by a steep drop in bream supply with bass exports remaining flat. Exports of bream fell to almost all major markets, with the shortfall being particularly severe during the summer months, when prices in almost all major markets turned sharply upwards.

In Turkey, gonadal development (so-called-milting) in bass and bream beginning in October 2015 caused a cyclical seasonal negative impact on prices. During this time, fillet yield decreases, and as a result, fish sized 400-600 g and 600-800 g became destined for the fresh fish market instead of processing. Companies aim for intensive sales during this period to manage their cash flows and before milting occurs. Not surprisingly, prices (ex-farm/iced packed) of 200-300 g to 600-800 g bream were about USD 4.28 per kg regardless of size category throughout November and December 2015. Prices of bass also remained around USD 4.96 per kg during these same months. Due to the decrease in stocks following this sales period, prices are expected to rise and remain stable throughout January to mid-May for 400-600 g and 600-800 g bream. The same trend is also expected for bass.

According to industry sources, total hatchery production of bass and bream for Turkey in 2016 is expected to be about 400 million juveniles, approximately the same as initially planned for 2015. Due to some bio-technical problems, Turkish hatcheries struggled to meet the demand for bass juveniles in 2015, but will seemingly be able meet the demand in 2016.

Italy
In the first nine months of 2015, Italy imported around 37 800 tonnes of both bass and bream for a total value of EUR 207 million. These figures reflect year-on-year increases of around 4% and 13% respectively, pointing to the relatively higher prices in 2015. After steadily increasing its share of the Italian market at the expense of Greece, Turkey supplied 19% of the volume over the same period, with Greece accounting for 62%. As seen in other markets, it is bream where the price increase has been most pronounced due to lower supply. Italy's domestic bass and bream industry, supplying the premium segment, saw flat bass production and around a 5% increase in bream production, boosting fresh exports to France also at higher prices.

Spain
Despite a generally more optimistic outlook for the Spanish economy and private spending, bass and bream sales dropped sharply in 2015. Import volumes of both species combined fell by some 14% in the first nine months of the year with total value for the same period down by 7%. This drop in imports was almost entirely accounted for by bass, but a reduction in bream consumption was also observed when lower domestic bream production is taken into account. It is likely that increased prices are a significant factor underlying the market situation, particularly for bream.

France
Demand on the French market was noticeably affected by higher prices for imported bream in 2015, with import volumes of the species dropping 12% in the first 10 months of 2015. However, buyers have shown increased interest in relatively cheaper imported bass (+15% in volume over the same period), which consequently has been more readily available to French consumers. Turkish fish, previously largely shunned by French consumers, increased its share of the import market over the same period, up to 10%.

Russia
In 2015, the demand for bass and bream was estimated to have fallen by 40-50% compared with 2014, due to the devaluation of the ruble and inflation.

In the first 10 months of 2015, total Russian fish imports from Turkey amounted to only 6 870 tonnes, most of which was comprised of bass and bream. This is in comparison to the same time period in 2014, when the total fish import volume from Turkey was 10 600 tonnes.

On 30 November 2015, Russia announced a ban on Turkish imports of fruits and vegetables and a number of other food products that would begin on 1 January 2016. These sanctions were announced as a political move over the Turkish shooting of a Russian jet near the Syrian border. As of this writing, fish products from Turkey have not been included in the list of banned import products set forth, but it is expected that there could be possible restrictions on Turkish fish in the future, potentially further reducing supply options as Greek fish is currently banned under the ongoing Russian embargos.

Other markets
In the UK, a strong pound has minimized the impact of higher euro prices on consumer demand, and import volumes in the first 10 months of 2015 were up 9%, with bass from the Netherlands increasingly popular. Meanwhile, the US market remained stable while Russian imports, 100% sourced from Turkey, falling significantly as the economic situation declined.

Outlook
Despite some general social and economic uncertainty in Europe at present, the current state of relative stability in the market is expected to continue at least through 2016 as total supply is forecasted to fall further. For both bass and bream, the total drop is likely to be around 2-3%. In particular, the two major producers of Turkey and Greece will cut back on volumes, although the Spanish sector is predicted to rebound somewhat from 2015's shortfall. Investment in research and development projects from various sources, including the EU, should see continuing technical advancement in the industry. On the marketing side, quality certifications and ecolabelling as well as product innovation are becoming more widespread.

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