May 2020

The COVID-19 pandemic will continue to inflict heavy damage on seafood markets, particularly for fresh products and popular restaurant species. On the supply side, fishing fleets are laying idle, and the deteriorating outlook has seen aquaculture producers drastically reduce stocking targets.

In 2019, global fish production dropped by some 1 percent. The trade of fish and fish products also contracted, as trade conflicts and related uncertainties dragged on economic growth and impacted business revenues. This year was expected to be somewhat more positive for the seafood industry relative to 2019, but the emergence of COVID-19 pandemic and associated impacts have rendered previous forecasts largely irrelevant.

Governments around the world seeking to contain the virus have introduced isolation directives, limitations on business opening hours, and travel restrictions. Food-service demand has been sharply reduced as restaurants have closed. However, retail sales of non-perishable products, such as canned tuna, have seen a boost as households changed their purchasing behavior.

The restaurant industry was one of the first sectors to be shut down, leading to a considerable reduction of food-service demand in many important markets. Effects on retail sales have been more mixed; however, with demand for packaged and frozen products boosted as households look to stock up on non-perishable foods.

On the supply side, shortages of labor and other business challenges appear likely to continue exerting a negative impact on seafood production across the world, alongside the poor demand outlook. Aquaculture harvests are being delayed and stocking targets drastically reduced, affecting the production of heavily traded commodities such as shrimp, salmon, pangasius, tilapia, seabass and seabream. Reduced aquaculture activity also translates into a subdued market for fishmeal.

Businesses further down the supply chain have all been affected by the lack of raw material, on top of other operational difficulties. Logistics have become costly and slow due to closed or restricted road borders, health inspection delays, and the large-scale cancellation of flights. Entire fishing fleets are laying idle due to a combination of poor demand and restrictions on crews and vessel movements.

The general outlook is still overwhelmingly dominated by uncertainty, and the focus is on damage mitigation. Permanent changes in the market landscape, particularly in terms of marketing and distribution, can be expected.

Industry stakeholders are calling for financial aid and regulator flexibility in terms of adjusting catch quotas and raising biomass limits and emphasizing the need to rapidly understand and plan for long-term changes in the market landscape.

While China and some other countries have been able to restore some degree of normality, the process is likely to be slower in the European Union (EU) and the United States of America (USA). For other large seafood markets where the virus is yet to peak, such as Brazil and the Russian Federation, the scale of the damage is yet to become clear.

The prolonged market downturn can be expected even after current restrictions are lifted or relaxed. High-end products, popular restaurant items and species that are primarily marketed fresh will be the most heavily affected, including lobster, fresh salmon, cephalopods and bivalves. Most seafood trade events will continue to be postponed or canceled for some time to come.