The Mediterranean bass and bream aquaculture sector has been saved from the worst effects of the COVID-19 pandemic by virtue of a timely contract in supply and a boost to retail sales. In future, the industry is looking to capitalize on good prices without repeating the familiar pattern of overly rapid production growth.

Production

Mediterranean harvests of bass are estimated to have dropped by around 10 percent in 2020, in contrast to flat or marginally higher bream production. The contraction in bass supply reflects a sector-wide response to the historically low bass prices observed on European markets in 2019, as well as the losses at Spanish farms due to Storm Gloria. Turkey, now the world’s largest producer, should see a drop in production of both species in line with reduced juvenile stocking over the last two years. This marks a departure from the longer-term trend that had seen European market prices pushed down by rapid growth in Turkish supply volumes, lower production costs for Turkish producers and a weak Turkish lira. In Greece, the largest EU producer of bass and bream, recent sector consolidation has been accompanied by commitments to invest in farming, hatchery and processing capacity. Demand from Spain to make up domestic supply shortfalls and higher prices than expected mitigated the financial damage of the pandemic to some extent. In early 2021, however, the Hellenic Organization of Aquaculture Producers (ELOPY) said that some companies are in need of urgent government support following a difficult year.

Trade and markets

As increasingly severe measures to control the spread of COVID-19 across the European continent were being introduced in early 2020, the bass and bream sector faced a challenging market situation as demand from the hotel, restaurant and catering (HORECA) sector effectively disappeared. Despite short-lived returns to near-normality in some markets, repeated waves of COVID-19 kept foodservice businesses in states of partial or complete lockdown throughout the year and significantly reduced tourist-driven sales. This was particularly damaging for companies focusing on larger fish, as these sizes are typically directed to the restaurant market. Companies without diversified product ranges including value-added, convenience options were also at a relative disadvantage as the bulk of sales shifted to retail. Despite the pandemic-related difficulties experienced in 2020, total bass and bream export revenue increased by some 5 percent during the year, to EUR 1.3 billion. Broken down by species, bream export value grew by some 9 percent to EUR 714 million, while bass export value was more or less flat year-on-year at EUR 600 million. Greek exports of both species increased 12 percent to EUR 520 million while Turkey posted a 4 percent gain to EUR 377 million. The overall increase is explained primarily by a combination of higher average prices and additional volumes exported by Greece to Spain to make up the supply shortfall there.

Prices

Prices for both bass and bream improved in 2020, as tight supply more than offset the weak market environment. Greek fresh whole 300-450 g bream hit EUR 4.80 per kg (CIF, Italy) in August, while the same size bass reached EUR 4.69 per kg in the same month. Meanwhile, Turkish export prices for fresh whole bass and bream peaked at EUR 4.24 and EUR 3.78 per kg (FOB, Turkey) respectively. In 2021, prices for both species have been climbing in anticipation of market recovery as supply stays tight.

Outlook

Greek production is forecast to increase by around 12 percent in 2021, while Turkish bass and bream production is expected to continue dropping, by an estimated 10-15 percent. With Turkish banks increasingly less willing to lend due to the economic climate, Turkish bass and bream companies have looked elsewhere, with leading firm Kilic Deniz recently securing a loan of EUR 80 million from European development banks. While the anticipated recovery in HORECA demand in Europe following a successful vaccine rollout should lift prices in major markets, the industry as a whole will need to ensure that a stable supply growth trajectory is maintained. An extended period of consistent profitability is crucially important for a sector that has historically struggled with the damaging effects of the boom and bust cycle.