First, imports remain the backbone of the markets. Second, EU quota opportunity is becoming more positive, but it remains to be seen if the catch utilisation rate will follow. Third, competition from other populous regions is intensifying, for example from markets such as Brazil, Russia, and China. Fourth, are compliance requirements and costs making the EU-markets less attractive to raw material providers?
In 2012, the total amount of fish available was slightly less than 14 million tonnes. Of this, 8.8 million tonnes were imported from third countries, and only 4.8 million tonnes came from European fisheries. Keller says, “We can plainly see that, without imports from third countries, we would not have enough fish to supply the demand in Europe”.
The dependence on imports has grown over the past decade. In 1999, the EU imported 51% of the fish consumed, and in 2012 is was 65%.
The Association of Fish Processors and Importers in the EU (AIPCE-CEP) argues that imports are the mainstay of the EU fish market and should not be regarded as a threat to the EU fishing fleet.
Will EU catches sell?
At the same time, Keller asks, if we have more quota available are there markets for it in Europe, or do we have to export it to other areas because the demand is not as strong? “For example”, explains Keller, “looking at the large amount of cod coming from the Barents and the Norwegian seas, we wonder if there is enough market for it in Europe”.
He predicts an increase in the amount of fish supplied by aquaculture. “I have absolutely no doubt that this is possible for the future in a very substantial way”, he continues. “I am convinced that this will happen. The demand for fish in the EU will increase again, and that demand will be fulfilled. But you will pay higher prices in the future. It’s not a question of whether fish will be available, believe it or not. The question is what will the price be?”
Live weight equivalent
For Keller, it is important that all statistics be calculated using live weight equivalent, which is a way to convert the volume or mass (more commonly referred to as the weight) of a product at one stage in the production chain to its volume or mass at another stage in the chain.
“One tonne of fillet blocks and one tonne of headed and gutted fish are different kinds of presentations”, he says, “because to produce a fillet block you might need double the amount of whole fish. To make the units equal, we convert everything into live weight”.
Competition is heating up
Keller explains that competition from other populous regions for raw materials is intensifying. “Look at the situation with the salmon. There is a lot of salmon going out to Russia. We know that there are markets for cod in Brazil, but we don’t know what will happen in India”.
In August, the EU Commission banned the Faroe Islands from importing herring and mackerel caught by Faroese vessels. Keller admits that this might have a negative impact on the EU’s supply because the Faroe Islands is the largest supplier of herring to the EU market.
“They can easily sell this fish to Africa. They can easily find other markets in the world. Look at Brazil, at Russia, at China. On the other hand, although we have strong competition from these countries, we also can see some opportunities. Maybe these are markets for our convenience fish products”.
Requirements that cost
Says Keller, “Based on the information we have at the moment, even after introducing new regulations, we are not seeing any interruption of the trade flow. There is still enough fish coming into the EU, even if it’s a bit less at the moment, but this is related to the economic crisis”.
Still, there are many areas for improvement. “We need fewer administrative costs, one of which is the duty that must be paid on imports. We are fighting against duties on the raw materials”. He points out that countries that were part of the Generalised System of Preferences, which regulates duties, and paid duties on their products of only 3%, saw the duties jump to 7% or even to 20%.
The second area for improvement is the amount of administrative work. “I call it a paper tsunami, where you have lots of paperwork to prove that the fish come from sustainable sources or the cost of the illegal, unreported, and unregulated fishing (IUU) regulations. Many administrative things have to be streamlined. We’re looking for a general reduction in administrative costs. Yes, illegal fisheries should be investigated, but not every fishery in the world should be “accused” in general term”.
Level playing field
Often, the industry or the importers are accused of importing fish from areas that do not have the same health standards or the same competition. The question of a level playing field often arises.
Keller says, “We have often had the question about a level playing field. It’s notable that we find the following in the Common Fisheries Policy. “There is a need to strengthen the competitiveness of the Union fishery and aquaculture sector, …the Common Market Organisation for fishery and aquaculture products should ensure a level-playing field for all fishing and aquaculture products marketed in the Union, should allow consumers to make better informed choices and support responsible consumption, and should improve the economic knowledge and understanding of the Union markets along the supply chain”.
He continues, “This is an indirect criticism that, very often, fish products coming from outside the EU do not follow the rules, so even the fishermen complain that imports can have lower health standards and lower standards for IUU”.
He thinks it is important to emphasise that, in general, the European seafood processing industry and traders are not importing unsafe seafood.
He says that the other important thing to remember is that the Commission and NGOs still feel that there is substantial activity in IUU. “But if we look at the trends in growth statistics”, he says, “we have not seen any interruption of trade for any species. And if a large amount of IUU activity were taking place, it would register in our statistics because less tuna, mackerel, or cod would be imported, and that’s just not the case”.
|Food balance for fish and fishery products|
|1.000 tonnes live weight|
|- Non-food uses||1.000||700|
|= Supply for consumption||4.889||4.873|
|+ Imports (Third countries)||9.221||8.815|
|= Total availability||14.110||13.688|
|- Exports (Third countries)||1.951||1.996|
|= Total consumption||12.159||11.692|
Understanding the European market
Keller explains that these markets are all different, and to understand the European market, it is necessary to look at individual species. “Of course we can give the overall statistics, but to really describe the market, we must go into detail about the main species, where they come from, and how they are presented. It is necessary to go into detail to understand trade issues, such as partner agreements and why certain agreements were made with certain countries. This is a good first entrance to the market if you have not already analysed the market in that way”.
He points out, for example, that, although most of the species are imported, the domestic herring market is much larger than for imports, forming a picture totally different from the other species. Total market volume of herring is nearly 1 million t, and 663,000 t come from European catches. Imports are only half that amount. Most of the production is frozen flaps (123,000 t), followed by frozen fillets (91,000 t), and frozen whole (43,000 t).
Tuna, the most popular fish
According to Keller, there are 1.19 million tonnes of tuna in the European market; it is the species with the greatest volume in Europe. Approximately, 42,000 tonnes come from European catches, and the main part of that, 1.1 million, is imported. Most of it, 647,000 t, is prepared; 269,000 t are loins; and 200,000 t come as frozen whole.
“People imagine that cod is the most important species, but actually it’s tuna, followed by salmon, cod, and herring, and these are among the ten most important species”.
The four largest importers of tuna are Ecuador, which supplies ca. 225,000 t; Mauritius, 119,000 t; Thailand, 108,000 t, and the Seychelles, 82,000 t. The supply base is very international, with 1,065,000 t supplied by other countries.
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Salmon is the next most imported species, with most of it coming from Norway, which supplies 845,000 t of a total import volume of 1,072 million t. The rest of the country portfolio is diverse: China (71,000 t), the Faroe Islands (62,000 t), and the USA (46,000 t). Altogether, 48,000 t come from other countries.
From a market volume of 1.073 million t, 697,000 t are imported as fresh whole; 168,000 t as frozen fillets; and 145,000 t as fresh fillets.
Keller points to cod as an interesting species because the largest portion of the production is dried and salted, not for fresh consumption. Norway plays an important role, supplying 302,000 t of the 866,000 t import volume. Other main suppliers include Iceland (198,000 t), China, (139,000 t), and Russia, (125,000 t). Almost 102,000 t are supplied by other countries.
Keller notes that shrimp is an interesting market, totally different from the others. It depends 100% on raw materials coming from third countries. A large portion is prepared and preserved. It is also interesting to see that four countries supply the greatest share: Greenland (105,000 t), Ecuador (104,000 t), Thailand (102,000 t), and Canada (70,000 t). Other countries supply 193,000 t of the total import volume of 874,000 t. “Of course, here we have to go into more detail because shrimp from Greenland and shrimp from Vietnam are totally different species”, says Keller. “The Pandalus borealis coming from Greenland is totally different from the Litopenaeus vannamei from Indonesia, and the Penaeus monodon from Vietnam”.
“Because no Alaska pollock is caught in the EU”, Keller says, “we are 100% dependent on imports, and frozen fillets are the main presentation (781,000 t), followed by frozen meat (65,000 t), and frozen whole (1,000 t). This is very logical, because we only need the fillets for processing to make products that are more convenient. Why should we import fish from Russia or the US that have the head and bones?”
China, which has only a small quota for Alaska pollock, is the largest importer with 400,000 t. Other main importers are the USA (366,000 t), Russia (82,000 t), and South Korea (2,000 t). Mainly, the fish are caught in Russia and the USA and processed in China. The main presentation is in frozen fillets (781,000 t), frozen meat (65,000 t), and frozen whole (1,000 t).
Dr. Keller based his presentation on the 20123 AIPCE-CEP Finfish Study. The focus of the Finfish Study is whitefish, but in recent years, it has included alternative resources, such as freshwater cultivated species of pangasius and tilapia. Further, because the fish industry relies on a broader selection of species and types, the study has been expanded to include salmon, tuna, pelagics, and Surimi as well as shrimp and cephalopods.
The 2013 study will be available soon on the AIPCE-CEP website: http://aipcecep.drupalgardens.com/content/white-fish-study.