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GLOBEFISH - Information and Analysis on World Fish Trade

Value of global seafood trade projected to fall by 1.1% compared with 2015

04/10/2016

After a long period of consistent growth, the value of global seafood trade is projected to fall by 1.1% compared with 2015, to USD 132.6 billion in 2016. This will be the second year of decline. and it will be the first time that there have been two consecutive years of decline since the FAO statistics on global trade began 40 years ago.

The drop in value is not related to decreased trade volumes, which are forecast to remain flat this year at 59.9 million tonnes, but rather the result of a significantly stronger US dollar – decreasing the relative value of trade in other currencies - and a drop in prices for some major traded species. The major trends in fish production and consumption are continuing, however, with stable capture production and a further 5% increase in aquaculture production. Meanwhile, per capita consumption of farmed species is expected to reach 10.9 kg this year, higher than the estimated 9.7 kg of wild species.

As of April 2016, the latest reported month, the FAO Fish Price Index was on a par with the same month in 2015. Overall, prices of traded seafood remained relatively low over the first half of 2016 compared with recent years, due primarily to a large proportion of global trade consisting of shrimp and tuna, highly traded commodities for which prices have fallen substantially over the last year or so. Prices for some high volume species such as mackerel, pangasius and tilapia, have fallen as well. That said, the price situation is somewhat mixed, with a number of other species following upward trends. Cephalopods and certain groundfish species such as cod have shown strong gains over the same period, as have herring prices. The standout performer, however, is farmed salmon, for which prices in Europe are reaching unprecedented highs as global supply tightens.

Of the world's top seafood exporters, the majority are expected to see export revenues drop in US dollar terms, due to a combination of lower prices and a strong US currency. Major tuna and shrimp exporters such as India, Thailand, the Philippines, China, Ecuador and Mexico are all forecast to suffer to varying degrees from low commodity prices. A number of large producers will perform better however, such as Argentina, Norway and Iceland. Norway and Iceland are both benefitting from high cod prices, while Norwegian salmon aquaculture companies are taking in huge revenues as farmed salmon prices take progressively higher leaps upwards. Argentina meanwhile, took in record catches of Argentine red shrimp last year and has significantly boosted sales to European markets and China.
On the import side, the three most important markets, the USA, the EU and Japan are all expected to see marginal declines in total import value, and there are few countries expected to perform well over the year.

The referendum vote in the UK to exit the EU has had an immediate and negative impact on the UK economy as uncertainty reigns over how the exit scenario will play out and what the implications will be for trade between the UK and its most important trading partner. The most significant effect so far has been the rapid deterioration of the British pound, which is an advantage for exporters but drastically reduces the purchasing power of seafood importers. For a country that imports well over twice the value of seafood that it exports, the consequences are likely to be serious. Beyond matters of trade, the exit of the UK will mean a reinstatement of national control of fisheries management policies and thus will likely lead to an adjustment of sovereign water quotas previously established in Brussels under the Common Fisheries Policy.

In the longer term, projections in the recently released OECD-FAO Agricultural Outlook put total fish production at 195 million tonnes in 2025, of which aquaculture production will contribute 103 million tonnes. By the same year, fish consumption is forecast to reach 21.8 kg per capita per year, increasing in all continents, particularly in Asia and Oceania. Due to income growth, which is typically accompanied by higher household expenditure on expensive proteins such as seafood, fish consumption will rise more rapidly in developing regions. This increase in demand is not expected to be accompanied by an overall rise in prices, with fish prices projected to decline in real terms over the next decade.

The report analyses the market situation over the period January-July 2016

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