Continuation of Covid-19 effects on consumption of fish
In 2021, household expenditure on fishery and aquaculture products in the EU-27 grew 7% from 2020, continuing the upward trend already registered between 2019 and 2020. The increased expenditure from 2020 to 2021 was much higher than the 1,5% inflation of prices for fishery and aquaculture products observed in the same period. This suggested that the expenditure increase was not just a result of inflation, and that EU households had indeed spent more money for fishery and aquaculture products. The main reason can be traced to the lasting effects of the COVID-19 pandemic, which led to an increase in stay-at-home regulations, and thus increased at-home consumption. Nonetheless, according to Euromonitor estimates, out-of-home consumption also grew. Sales of processed fish through food services started to recover in 2021, increasing by 15% from 2020. Euromonitor also estimates that increases will continue for processed products and then stabilise during 2024-2026.
Deterioration of the EU trade balance
The year 2021 saw overall growth in the total value of EU trade flows of fishery and aquaculture products, and it also initiated a period of economic recovery from the 2020 pandemic crisis. It is important to note that while most purchases are made in US dollar (USD) or Norwegian krone (NOK), they are reported as Euro (EUR) in this report. When looking at the trends of monthly exchange rates, it can be seen that the EUR strengthened during 2020, then had a slight decrease during 2021, yet still maintained a higher value than in 2019. The steep drop which began in February 2022 is linked to the Russian military aggression of Ukraine.
Due to increased imports and decreased exports with third countries, the trade balance deficit in 2021 was 10% or 1,80 billion euros higher than in 2020. In the 2012-2021 decade, the deficit grew by 31% in real terms. The United States saw an increase in imports together with a decrease in exports in 2021, making it the world’s largest net importer of fishery and aquaculture products for the first time in ten years. By comparison, the EU ranked second with slightly increased imports. As for imports, values increased more than volumes from 2020 to 2021, due to an increase in the prices. This can be partly explained by the EUR’s 5% loss of value against the NOK during 2021, which made 2021 imports from Norway more expensive than 2020’s. Further, since a large percentage of extra-EU imports is from Norway, this contributed extensively to the overall value increase of extra-EU imports while the volume remained quite stable. Moreover, there was a significant increase in imports of high-valued species mainly destined for the HoReCa sector.
2021: record year for Intra-EU flows of fishery and aquaculture products
In 2021, intra-EU exports were greater than extra-EU imports for the first time in 10 years. Compared with 2020, the value of intra-EU trade grew by 15% or 3,4 million euros. This indicates that, as EU fishery and aquaculture production has increased, it has led to an increase of goods produced and traded within the EU. Indeed, intra-EU exports increased more than extra-EU imports in both volume and value. However, as consolidated data on EU production of fishery and aquaculture products are only available up to 2020, this cannot be corroborated by facts. It still can be shown that exchanges within the EU largely consist of re-exports of products originally imported from third countries. These products may also be subject to multiple exchanges and processing steps taken by Member States once they enter the EU market. The value added along the often complex supply chains and the multiplication of cross-border flows contribute to inflating the value of intra-EU exports.
2020: decade lows in supply and apparent consumption
Every year, EUMOFA estimates the total supply of fishery and aquaculture products for EU consumers (catches + aquaculture production + imports). By not including exports, this formula provides an approximation of EU apparent consumption. As mentioned above, consolidated data on EU production of fishery and aquaculture products are available up to 2020, thus the estimates have been made up to 2020 as well.
From 2019 to 2020, EU import and production of aquaculture and fishery products dropped, the latter being the major contributor to a decrease in total supply, which reached one of its lowest amounts registered in the 2011 to 2020 decade. Again, all these decreases can be seen as related to the COVID-19 pandemic’s impact on the sector. This included the pandemic’s adverse impacts on logistics, which concerned several stages of the supply chain and the international flows of goods, as well as on production activities, in particular fisheries. Although exports decreased as well, the EU dropped to an apparent consumption of 10,41 million tonnes live weight equivalent (LWE) in 2020, which also represented a decade low.
The per capita apparent consumption is estimated to have dropped by 1,7 kg LWE from 2019, reaching 23,28 kg LWE. Of this, 16,79 kg LWE were wild products and 6,49 kg LWE were farmed products. According to EUMOFA and national estimates, Portugal stands out as the major EU consumer of fishery and aquaculture products. This was confirmed in 2020, despite its apparent consumption decreasing from 2019. In contrast with the negative trend at EU level, a few countries reported slight increases. Bulgaria achieved the highest increase, which was estimated at 6%.
Landings of fishery products, including species not destined for human consumption and seaweed, totalled 3,55 million tonnes with a value of 5,36 billion euros. Of note, this was the lowest value recorded during the 2011 to 2020 decade, in both nominal terms and real terms. This could have been due to the effects of the outbreak of the COVID-19 pandemic, which caused a reduction in fishing efforts, as well as to the quotas, which were generally lower in 2020 than in 2019.
Recent dynamics for some main species
EU imports of salmon in 2021 showed significant value increases of close to 10% compared with 2020. It reached EUR 6,5 billion, which was the highest ever recorded. The increase in import quantity was a moderate 2%, so the strong increase in value must be seen in relation to the reopening of the HoReCa segment, which in 2020 had been negatively impacted by COVID-19 pandemic lockdowns. Norway and the Faroe Islands were the main contributors to the 2021 increase in salmon import value and volume.
Alaska pollock is also an important species for the EU processing industry. In 2021, EU imports of Alaska pollock dropped to a 10-year low of 266.305 tonnes, which was 4% less than 2020. The low import volume could be caused by lower accessibility of product from China due to closure of Chinese ports to the Russian Federation and Chinese COVID lockdowns. During the pandemic, the pollock produced in the US gained popularity on the US market due to its favourable price, leading to reduced availability on the EU market. On the other hand, EU imports of Alaska pollock from Russia grew by 29% in quantity and 31% in value from 2020 to 2021. Despite the Russian war of aggression against Ukraine, EU imports of Russian pollock continued on an all-time-high level in the first half of 2022.
In 2020, imports of tuna fillets replaced whole tuna as the main product imported to the EU. The trend continued in 2021, with imported fillets maintaining the same quantities as in 2020 at around 190.000 tonnes, while imports of whole tuna dropped by 21% to around 153.000 tonnes. As of the end of August 2022, the import gap between fillets and whole tuna had continued widening. EU import prices for whole tuna and tuna fillet were up in 2021 compared with 2020, by 7% and 3%, respectively. However, the 2021 price level was still lower than in the last two pre-pandemic years. Import prices showed a steep rise in the first 8 months of 2022.
EU exports of mackerel saw the highest volume in 4 years in 2021, reaching 180.169 tonnes. The price for mackerel of EU origin exported to third countries in 2021 averaged 1,69 EUR/kg, for a decrease 3% from 2020. In the first 8 months of 2022, export prices rose by around 20%, driven by strong demand from Asian and African markets. The ICES proposed a 7% reduction in Atlantic mackerel quotas for 2022 to 794.920 tonnes. As in for 2021, the coastal states fishing Atlantic mackerel did not manage to reach an agreement on quotas. By the end of September 2022, the coastal states of Norway, Iceland, the Faroe Islands and the UK landed 3% more mackerel than in the same period in 2020.
EU production of farmed seabass and seabream increased more than global production (including the EU) in 2021. EU production increased by around 10%, while global production increased by 5%. Trade flows between Member States showed a 6% increase in prices for seabass and 3% decrease for seabream in 2021 compared with 2020. Production of these two species in the EU is expected to continue to grow in 2022, with a 3–7% growth rate expected over the year. As with several other species, prices of these two species increased steeply in the first half of 2022 (as per August 2022), with intra EU export prices for farmed seabass up 21% and seabream up 12%.
Macroeconomic trends
Unlike 2020, the EUR in 2021 depreciated against three currencies of importance to operators in the fish and seafood industry – Icelandic króna (ISK), British pound (GBP), and NOK, while it appreciated against USD. The EUR appreciated close to 4% against the USD but depreciated by 3% against the GBP, 5% against the NOK, and 3% against the ISK. During the first three quarters of 2022, the EUR depreciated against all the above-mentioned currencies.
From September 2019 to July 2022, the European Central Bank (ECB) interest rate had remained unchanged at -0,5% since September 2019. From July 2022 to November 2022, its rate was raised 3 times, up to 1,5%, in order to contain inflation.
Overall, the 2021 inflation rate of 2,9% in the EU-27 was up from the annual 2020 rate of 0,7%. However, in 2022 inflation accelerated and by September, the 12-month average rate had reached 7,7%.
After a major drop in marine fuel prices in 2020, impacted by lower demand during the COVID-19 pandemic, prices started to rise in 2021, gradually leading to a higher fuel cost for the EU fishing fleet. On average, marine fuel prices rose by 48% from 2020 to 2021, but this was still slightly lower than the 2019 average. However, in 2022, impacted by the Russian military aggression in Ukraine, energy prices, including marine fuel prices, rose to record high levels. In the first 9 months of 2022, marine fuel prices averaged close to 1,00 EUR/litre, with peaks well above 1,00 EUR/litre, which was more than double the 2021 average.
The consumer price index for fish and seafood in the EU20 saw an upward trend in 2021. From January 2021 to December 2021, consumer prices for seafood rose by 2,4%, but in the first 9 months of 2022, they increased by 8,3%. 2021 was the first year the UK was outside the EU21. The year started with massive delays at the UK borders following its withdrawal. Even though the situation has progressively come back to normal, non-tariff barriers following Brexit (e.g., administrative or sanitary duties) have negatively impacted trade flows. Indeed, total EU imports of fishery and aquaculture products from the UK decreased by 11% in volume and 14% in value from 2020 to 2021. Also, exports to the UK in the same period dropped by 29% in volume and 38% in value from 2020 to 2021.