Effects of Covid-19 pandemic on the EU consumers of fishery and aquaculture products in 2020
From 2019 to 2020, household expenditure on fishery and aquaculture products grew by a remarkable 17%, which was much higher than the 2,1% inflation of prices for these products. This increasing trend was confirmed by Europanel, Kantar and Gfk data on household consumption of fresh fish in the EU’s largest consuming countries. The data showed an increase of 7% in value and 4% in volume from 2019 to 2020. This increase was most likely due to the closings in the HoReCa sector due to the COVID-19 pandemic, and the consequent increase in at-home consumption.
The effects of the pandemic are also quite apparent when looking at 2020 data on out-of-home consumption of processed products. The most significant decreases from 2019 were registered in the largest countries, which had seen their restaurants closed for longer periods. For example, Euromonitor estimates that Spain and Portugal, two of the largest EU consumers, will not see their consumption back to the pre-pandemic level until 2024, and estimates for France show that a recovery will start in 2022 but, consumption will not have reached the pre-pandemic level even by 2025.
Improvement of the EU trade balance for fisheries and aquaculture products in 2020
In 2020, extra-EU imports of fishery and aquaculture products totalled 6,15 million tonnes worth 24,21 billion euros. Compared with 2019, this represented a value decrease of 9% or 2,30 billion euros, and a volume decrease of 2% or more than 125.500 tonnes. Values decreased more than volumes from 2019 to 2020 because of the significant decrease in high-value species. These species were mainly destined for the HoReCa sector, which had faced shutdowns initiated to control the spread of COVID-19. Extra-EU exports on the other hand reached a six-year peak of 2,21 million tonnes, showing a growth of 1% from 2019. In value terms, they totalled 6,96 billion euros, which represented a 4% drop of more than 290 million euros from 2019. Cod accounted for most of the overall value decrease of extra-EU exports from 2019 to 2020, as a consequence of decreased exports to China and the UK.
Due to decreased imports, the trade deficit in 2020 was 10% or 2 billion euros less than in 2019. Among the EU countries, almost all of those with the highest deficits (>1 billion euros) saw their situations improve from 2019 to 2020. The exception was the Netherlands, which is one of the major entry points for high-value products originating from outside the EU and destined for the internal market, such as salmon, cod and shrimps.
Intra-EU exchanges followed the same trend as extra-EU imports, as they largely consist of northern Member States exporting products originating from Norway and Iceland – mostly salmon and cod – to other EU countries.
Decreased supply and apparent consumption of fisheries and aquaculture products from 2018 to 2019
Consolidated data regarding EU production of fishery and aquaculture products are available up to 2019. This includes estimates on EU total supply for EU consumers (catches + aquaculture production + imports) and EU apparent consumption (supply - exports).
In 2019, the EU supply of fisheries and aquaculture products for human consumption totalled 14,53 million tonnes of live weight. Although this was one of the highest amounts of the 2010-2019 decade, it still represented a 206.402-tonne decrease from 2018, due to a drop in catches. In 2019, catches touched the lowest amount of the decade under analysis, as a result of decreased herring quotas in the North East Atlantic, including the Baltic. The drop in catches offset the increases in imports and aquaculture production. The latter in particular registered a 10-year peak which was made possible by a boost in salmon production in the UK.
The EU self-sufficiency ratio, which measures the capacity of EU Member States to meet demand with their own production, was 41,2% in 2019. During the 2010-2019 period, the highest level of self-sufficiency was observed in 2014, which was a record year for EU catches, in particular for catches of mackerel and yellowfin tuna. Since then, self-sufficiency has been following a negative trend which again reflects the downward trend of EU catches and, even more, the increase of imports.
Per capita apparent consumption, estimated at 23,97 kg of live weight of mostly wild-caught products, was almost stable in 2019 compared with 2018. According to EUMOFA estimates, in 2019 EU citizens consumed, on average, 390 grams less of live weight fishery and aquaculture products than in 2018. The drop was again driven by a decrease in catches and, thus, in apparent consumption of wild products, especially of herring. According to EUMOFA and national estimates, Portugal stands out as the major EU consumer. This was confirmed in 2019, although apparent its consumption decreased from 2018 due to decreased imports (and thus supply) and increased exports. In contrast with the negative trend at EU level, Latvia registered a 59% increase, the most significant increase of per capita apparent consumption from 2018 to 2019.
Landings of fisheries products, including species not destined for human consumption and seaweed, totalled 4,07 million tonnes with a value of 6,91 billion euros in 2019, marking drops of 10% in volume and 4% in value from 2018. The main reduction concerned landings of sandeels in Denmark destined for industrial use. Herring and blue whiting also saw significant drops, due to lower landings of frozen herring in the Netherlands and fresh blue whiting in Denmark.
Recent dynamics for some main species
For the first time in history, the EU’s imports of salmon exceeded 1 million tonnes in 2020. This represented an increase of 4% from 2019. One driver behind the increase was the number of constraints on air freight to overseas markets due to COVID-19 pandemic and the consequent higher share of the European production (mainly Norwegian production) being sold on the EU market. In value terms, from an all-time high in 2019 of more than 6,4 billion euros, imports of salmon fell to 5,94 billion euros in 2020.
Another important species for the EU processing industry, Alaska pollock from China, also registered a decline in value. In 2020, imports of Alaska pollock from China dropped to 128.485 tonnes with a value of 354 million euros. This corresponded to decreases of 11% in both volume and value from 2019, due to pandemic challenges. In the first half of 2021, the pandemic hit the Alaska pollock industry in the US and, at the same time, China closed its ports to the Russian Federation. This created a very difficult raw material supply situation for Chinese processors, and had a negative impact on the EU supply chain, causing volatile prices.
In 2020, whole tuna and tuna fillets imports to the EU increased by 7% and 11%, respectively, and were imported at lower prices. In 2020, EU imports of tuna fillets (frozen and preserved) exceeded imports of whole tuna for the first time. Import volume for both products ended just above 190.000 tonnes. In terms of trade balance, 2020 was also a special year for tuna. For the first time, extra-EU import value of whole tuna (422 million euros) was higher than its export value (412 million euros).
Despite ICES proposed an 8%-reduction in Atlantic mackerel quotas for 2021 to 852.284 tonnes, the sum of the quotas set by each fishing country individually (EU Member States, Iceland, Norway, Faroe Islands and Russia) was higher than ICES’s advice. The catch season started early in 2021 and, by the end of September 2021, the coastal states of Norway, Iceland, the Faroe Islands and the UK had landed approximately 630.000 tonnes of Atlantic mackerel, which was significantly higher than 2020 landings. On top of this, the EU fleet has a quota just above 200.000 tonnes in 2021. Despite high catch volumes, export prices of whole frozen Atlantic mackerel from the EU averaged 1,41 EUR/kg during the first seven months of 2021, which represented a 4% decrease from the same period in 2020.
EU production of farmed seabass and seabream in 2020 was a slight 1% lower than 2019, while global production (including the EU) fell by 4%. Exports between Member States showed a 5% increase in prices for seabass and 2% increase for seabream in 2020 compared with 2019. However, 2021 looks to be a stronger year in terms of production, with a 6-9% growth rate expected for the full year. The highest expectations are related to seabass. A production decrease in Turkey led to higher market prices in late summer 2021, with EU import prices of farmed Turkish seabass increasing by 20% in one year.
Macroeconomic trends
On average, in 2020, the Euro (EUR) appreciated against the four currencies important to operations in the fish and seafood industry – US dollar (USD), Icelandic króna (ISK), British pound (GBP) and Norwegian krone (NOK). This was in contrast to the mixed picture seen in 2019. The EUR appreciated an average 10% against the USD, 6% against the GBP and NOK, and 12% against the ISK. However, during the first three quarters of 2021, the EUR depreciated against all the above-mentioned currencies.
As of the end of October 2021, the European Central Bank (ECB) interest rate had remained unchanged at -0,5% since September 2019. In March 2020, the Bank of England dropped its interest rate from 0,75% to 0,1% and, as of the end October 2021, it remained unchanged.
Overall, the 2020 inflation rate of 0,7% in the EU-27 was down from the annual 2019 rate of 1,4%.
In 2020, the COVID-19 pandemic also led to a major drop in prices of crude oil, which is the main driver of marine fuel prices. This resulted in lower fuel cost for the EU fishing fleet. However, in 2021, the prices have trended upward toward the 2019 level. Marine fuel prices in the first three quarters of 2021 were on average 33% higher than in the corresponding period in 2020, but 11% lower than in the corresponding period in 2019. In the third quarter of 2021, marine fuel prices were 59% higher than in the corresponding period in 2020 but only 2% lower than in the corresponding period in 2019. The boost in 2021 gas prices has also led to high electricity prices in both Europe and the US.
The consumer price index for fish and seafood in the EU22 was quite stable throughout 2020, while the first half of 2021 saw an upward trend. Compared with the first eight months of 2020, consumer prices were on average 1% higher in 2021.
As 2021 began, the Brexit transition period ended. Massive delays and confusion were observed at the UK borders following the withdrawal, but the situation has normalized as the year has progressed.