Increased expenditure of EU households for purchasing fish and higher prices
The consumer prices of fishery and aquaculture products have been growing significantly since 2014 and by 2019, they were 14% higher than eight years before. As the EU demand is primarily met through imports, the increases were in line with the increased prices of imported products. From 2018 to 2019, the household expenditure for fishery and aquaculture products increased in all Member States.
The EU trade deficit for fisheries and aquaculture products continues to rise
In 2019, imports and exports of fisheries and aquaculture products between the EU and the rest of the world totalled 8,55 million tonnes with a value of 33 billion euros, making the EU the second largest trader of these products after China. As a net importer, the EU had a deficit of 21 billion euros in 2019, which was slightly higher than the previous year. In the long run, the deficit grew by 33% in real terms from 2010 to 2019.
Extra-EU imports reached a ten-year high of 6,34 million tonnes, almost 460.000 tonnes or 8% more than in 2010. There was also a peak in value, with imports reaching 27,21 billion euros, which was a significant 38% increase in real terms compared with ten years before. From 2018 to 2019, the volume increased a barely perceptible 0,3% (+18.625 tonnes) while value grew by 2% (+659 million euros). The value increase was driven by prices of the most highly imported products – salmon, cod, tuna, fishmeal and Alaska pollock.
At the same time, extra-EU exports reached 2,21 million tonnes, growing by 115.275 tonnes or 6%, compared with ten years before. They achieved a ten-year high in value at 6,17 billion euros, which in real terms was 58% higher than in 2010. From 2018, the growth reached 435 million euros, for an 8% increase, largely driven by exports of salmon.
Intra-EU exports totalled 6,43 million tonnes and 27,41 billion euros, marking a 170.380 tonnes or 3% decrease from 2018, accompanied by 85 million euros or 0,3% increase in value. Intra-EU trade almost exclusively concerns exports of salmon from northern Member States (main entry points of Norwegian products) to other EU countries.
Decreased supply and consumption of fisheries and aquaculture products from 2017 to 2018
Consolidated data regarding EU production of fishery and aquaculture products, and therefore estimates on EU total supply for EU consumers (production + imports) and EU apparent consumption (supply - exports) are available up to 2018.
In 2018, the EU supply of fisheries and aquaculture products for human consumption reached 14,72 million tonnes of live weight. Although this was one of the highest amounts in ten years, it represented a slight 99.884 tonnes or 0,7% decrease from 2017, due to declining production from both fishing and aquaculture.
Due to decreased production of salmon in the UK, EU aquaculture production saw a reversal of the upward trend experienced in the previous four years, with volume decreasing 4% to 1,32 million tonnes from 2017 to 2018, and value decreasing 5% to 4,8 billion euros. EU catches totalled 5,34 million tonnes, of which 3,99 million were destined for food use. Food-use catches registered a 5% or 208.288-tonne decrease from 2017 to 2018, mainly due to reduced catches of mackerel by the UK, Spanish and Irish fleets.
Yet, in 2018, the EU self-sufficiency ratio, which measures the capacity of EU Member States to meet demand from their own production, remained in line with the ten-year average. However, a comparison of 2018 data with 2017 data shows a slight decline caused by the combined effect of the increased imports and decreased production.
Per capita apparent consumption, estimated at 24,36 kg of live weight of mostly wild-caught products, signalled that in 2018 EU citizens consumed, on average, 430 grams less fishery and aquaculture products than in 2017. Consumption declined for the three most consumed species, namely tuna, salmon and cod. According to EUMOFA and national estimates, in contrast with the general trend at EU level, Malta observed a significant per capita consumption growth from 2017 to 2018, largely driven by increased imports.
Landings of fisheries products, including species not destined for human consumption and seaweed, decreased 11% to 4,53 million tonnes while their value decreased 3% to 7,13 billion euros. The most significant drop was with sandeels destined for industrial use in Denmark – the same species that contributed to the boost recorded one year before, from 2016 to 2017. Denmark, however, remained the country with more total landings in the EU (one quarter of the total), which are mainly for non-food use. On the other hand, landings of skipjack tuna in Spain and scallop in France increased significantly.
Recent dynamics for some main species
Salmon. With a growth rate of 5%, the quantity of salmon imported in the EU reached an all-time high in 2019. Despite a 2% decrease in import prices, total import value amounted to 6,28 billion euros, another all-time high. Major drivers behind the increase in import quantity were a combined 8% growth in salmon production in the Faroe Islands, Iceland and Norway, and strong demand on the EU market. On top of the growth in imports, the EU showed an estimated 24% growth in salmon production in 2019.
Alaska pollock. In 2019, 305.007 tonnes were supplied to the EU market, the same quantity reported in 2018, which had been a record year. However, significantly higher prices on the EU market resulted in import value increasing 25% from 2018 and reaching 838 million euros in 2019. In the first semester of 2020, the volume of Alaska pollock imported in the EU decreased by 6% while import prices increased by 7%.
Tuna. After a 7% drop from 2017 to 2018, EU imports of whole tuna continued to decrease, dropping 3% in 2019, while imports of fillets continued an upward trend that saw annual increases of 10% on average from 2016 to 2019.
Atlantic mackerel. Despite its TAC being significantly higher in 2020 than in 2019, prices of Atlantic mackerel exports from EU Member States to non-EU countries were relatively high in the first seven months of 2020. Export prices of whole mackerel (fresh and frozen) of EU origin sold to non-EU countries averaged 1,62 EUR/kg, up by 4% from the record high price level observed in the corresponding period of 2019.
Seabass and seabream. While EU production of farmed seabass and seabream is relatively stable, its production in Turkey is still on the rise. On the rise are also EU imports of both species from Turkey which increased by 15% from 2018 to 2019. At the same time the import prices of both decreased on average by 4%: farmed seabass prices decreased 9% to 3,78 EUR/kg, while farmed seabream remained stable at around 3,90 EUR/kg. However, in the first semester of 2020, EU apparent consumption of seabass and seabream was down by approximately 6%, with seabass reporting the strongest decline.
Impact of Covid-19 on the fishery and aquaculture sectors
The COVID-19 pandemic has strongly impacted the market dynamics of fishery and aquaculture products, albeit to different extents. In the fishing sector, the pandemic has had negligible impact on products from small pelagics, as they are mainly processed into frozen products, and their market prices are still relatively low. On the other hand, fisheries targeting species sold fresh have been impacted noticeably. As for the aquaculture industry, market players targeting the retail sector did not report major losses in the first semester of 2020, while players traditionally targeting the hotel, restaurant and catering (HoReCa) segment suffered the most. The processing sector also faced the challenge of establishing safe working conditions to avoid the spread of COVID-19 among its workers. The processing sectors that produce durable products and target the retail segment have performed the best under the pandemic.
Loss of export opportunities has been challenging for both the aquaculture and the fishery sectors. With no strong demand in export markets, products have been sold in the EU market at lower prices.
Huge efforts have been made by many market players to adapt to the new market dynamics and many have succeeded. However, it seems as if the fishery and aquaculture industry must live with the uncertainties from the COVID-19 pandemic for the foreseeable future.
Macroeconomic trends
In 2018, the Euro (EUR) strengthened against four currencies important to operators in the fish and seafood industry – US dollar (USD), Icelandic króna (ISK), British pound (GBP) and Norwegian krone (NOK). However in 2019, the picture was mixed. EUR depreciated 5% against USD and 1% against GBP. On the other hand, it strengthened by 3% and 5% against NOK and ISK, respectively. In the first three quarters of 2020, EUR strengthened a significant 10% against NOK and 11% against ISK, while its exchange rate with GBP and USD remained unchanged.
The consumer price index for fish and seafood in the EU8 showed a slight upward trend through 2019. In the first half of 2020, it rose by 1,5% compared with the same period in 2019. This also meant a higher growth rate, with fish and seafood consumer prices rising by 0,9% in the first semester of 2019.
In 2019, spot prices of crude oil, which is the main price driver for marine fuel prices, remained stable, as did marine fuel prices in the EU. In 2020, a drop in crude oil prices, highly impacted by the COVID-19 pandemic, resulted in lower fuel cost for the fishing fleet. In the first three quarters of 2020, the spot price for marine fuel averaged 30% lower than in the corresponding period in 20199.