Navigating choppy waters
Industry estimates suggest that seafood production is due for a period of growth after a difficult spell.
The Responsible Seafood Summit included several presentations on the performance and prospects of the seafood industry.
On the opening day, Marcus Coleman, CEO of Seafish, the public body that supports the UK seafood industry, said he was confident there are signs the industry is on the road to recovery following an extremely challenging five years.
In a presentation titled “Choppy Waters: How the UK Seafood Industry is Navigating Post Brexit Trade”, Coleman revealed that the combined value of UK seafood imports and exports fell by around a billion pounds from the start of this decade. The statistics he shared showed that global factors had caused a fall from £6.45bn in 2019 to £5.28bn in 2024.
“Seafood trade reached a peak of almost £6.5bn in 2019 and things were looking bright,” he said.
“Consumer confidence was strong and the economy was in growth, although worries were bubbling up about the effect Brexit might bring about.
“It’s clear that what happened between 2019 and today created a challenging landscape for seafood trade.”
The 2020 pandemic disrupted supply chains and slowed down logistics with lockdowns leading to lower volumes of seafood being caught, processed and traded in the UK and internationally.
December 2020 marked the end of the transition period when the UK left the single market and customs union. This created barriers to trading with the EU in the form of paperwork and border checks. Shellfish exports to the EU were the most impacted, with annual value falling by £152.1 million (27%) compared to pre-2020 figures.
Since then, the Russian invasion of Ukraine has led to higher energy prices with Western countries, including the UK, also imposing economic sanctions on Russia, including a 35% tariff on whitefish consigned from the country.
A cost-of-living crisis in the UK and disruption to trade routes due to the war in Gaza further impacted the seafood industry with cod, tuna, Alaska pollock and mackerel suffering the most serious declines in import value.
But indications from the start of 2024 show consumer confidence is beginning to return, Seafish says, with recorded export value growth at 7.9% on the previous 12 months.
Seafood imports remain steady with salmon and cheaper whitefish alternatives to cod such as haddock, pangasius, hake and tilapia enjoying notable improvements.
Coleman welcomed the figures but added the entire sector still had work to do to complete its recovery.
He added: “There are reasons to be optimistic… the first half of the year is, at last, showing growth and total trade is moving in the right direction again, although it’ll be a long climb back to pre-2020 levels.
“For the bounceback to be complete, there also needs to be increases in the retail and food service sectors, although we understand market analysts are suggesting a cautious outlook.”
Finfish catch outlook
Janice Schreiber, Managing Editor, Expana Markets (formerly Urner Barry), provided a glimpse into the supply and pricing dynamics for three key wild catch species: pollock, cod and salmon.
She confirmed that wild catch generally remains flat compared to aquaculture, with cod quota reductions in several harvesting areas expected for 2025, especially in the Barents Sea, while the cod market is still also suffering disruption arising from Russia’s invasion of Ukraine.
The world pollock supply is stable, she said, but the Gulf of Alaska harvest saw a fall of 50,000 tonnes in its harvest this year, while sanctions in various farms are being applied to Russia by the US and EU.
For wild salmon, while 2023 represented a good year for the Alaskan salmon trade, the 2024 salmon season has so far yielded less than 100 million pounds in weight, 70% below forecast. Wild salmon exports from the US for the year to date are, trailing 2023 by 9%, she said.
Gorjan Nikolik
Finfish aquaculture
As ever, one of the highlights of the summit was the annual GSA Global Finfish Production Survey & Forecast, presented by Rabobank’s global seafood specialist Gorjan Nikolik, based on data and industry polling collected by Rabobank and analysts Kontali.
Nikolik was cautiously optimistic on the salmon front, with Norway back to growth mode after a couple of difficult years and good news from other producing nations – particularly Scotland.
Norwegian production of salmon is forecast to go up 3% this year, with a further 2.2% growth in 2025 and 5.3% in 2026. Scotland appears to be the real success story, however, following two very challenging years in 2022 and 2023. Production i
Global Atlantic salmon
Global salmonid supply production
At an estimated 12% increase for production this year, followed by 13% and 4% in 2025 and 2026, prospects are also looking good for Faroes. Of the smaller producers, Nikolik flagged up Australia, Iceland and land-based farming as “ones to watch” in the near future.
In Chile, the second biggest producer of Atlantic salmon, the picture is not so positive, with production falling this year by an estimated 7.7%, and predicted annual growth of 1.4% and 3.2% is not expected to get the industry back to 2023 levels.
Canada, meanwhile, is expected to grow at a modest 6%, followed by 3% for each of the following years – which will not bring the industry anywhere near its 2018 high. This is perhaps not surprising, given the federal government’s determination to end open-net aquaculture in British Columbia.
Kontali’s forecast for global Atlantic salmon production, at a little under three million tonnes, represents 1.7% growth this year, followed by 3.5% and 4.9% in the following two years, meaning that the industry is expected to surpass 2021 levels in 2025. This would still mean growth at a lower rate than to 5.8% CAGR (compound annual growth rate).
Production of large rainbow trout continues to be something of a rollercoaster ride for Chile, the biggest producer, with steep estimated rises in 2024 and 2026 offset by production falls in 2023 and 2025, with production less than a quarter of its 2012 peak.
For coho salmon, effectively a Chilean speciality, the survey predicts a 14% slump this year followed by flat production levels for the next two years.
Sea bass and sea bream production in the Mediterranean continues to grow, albeit at a less dramatic pace: an estimated 1.9% compared with CAGR of 5.5% over 2012-2022. This reflects flat figures for the second biggest producer, Greece, but better growth in Turkey and more dramatic increases for smaller players such as Italy and, especially, Croatia.
Tilapia global production
Global tilapia production, which this year is expected to pass the seven million tonne mark, is expected to continue its dramatic growth, at 4.1% this year followed by 4.7% in 2025.
While growth in tilapia production is flat in the biggest producer, China, second-placed Indonesia continues to grow more rapidly at an estimated 5.4% this year, while Egypt is getting back to its pre-Covid peak.
Nikolik singled out Thailand, Zambia, Ghana, Kenya and Brazil as smaller players to watch in this sector.
Pangasius, also known as striped catfish or basa, has been a major success story for Vietnam and this is expected to continue, with 8% growth estimated for this year. Worldwide, even though total production reached the 3.5 million tonne mark this year, this sector continues to expand impressively, with a year on year increase of 3.3% this year and 6.8% next year.
Looking at other species, Nikolik highlighted carp, which is still a major sector especially in China – grass carp alone is expected to reach 6,000 tonnes in that country this year – but appears to be no longer growing. He said that carp production is still growing at a slow pace in countries like India and Bangladesh, but consumption in China and elsewhere can be expected to decline in the long term.
Looking at smaller sectors, production of marine finfish like pompano, grouper and barramundi (Asian sea bass) is on the rise, especially in Asia.
Farmed Atlantic cod in Norway, although production is still less than 20 tonnes, is set to see a significant increase of 45% this year, with further growth to come over the next two years.
In conclusion, Nikolik said, for western markets the supply side outlook is looking good. The survey also included an annual list of industry concerns, for which the top were:
1. Cost of aquafeed
2. Disease prevention
3. Broodstock quality
Ragnar Nystøyl
Salmon facing headwinds
Ragnar Nystøyl, Chief Analyst at market research business Kontali, also gave an overview of the salmon sector. This year is expected to see a continuing fall in the proportion of wild catch salmon in the global total. Although farmed salmon is expected to grow only modestly this year (1% according to Kontali’s estimate) the expected catch for wild salmon is down 55%.
Since 2000, the global production of farmed salmon has shown a compound annual growth rate (CAGR) of 3% while wild catch has seen a CAGR of -12%.
Despite continuing growth, Nystøyl said the farmed sector is facing “headwinds”, especially in terms of the “licence to produce”. This, he said, comes with a higher and higher cost:
• regulatory capacity is becoming scarce and more unpredictable, and decisions are more political
• good sites (sea area); a scarce resource, for which fierce competition exists between salmon aquaculture and other interests and stakeholders;
• this “licence” is only granted in exchange for wider, deeper and more committed responsibility and operational quality; and
• fish health and fish welfare + environmental and social footprint have become crucial factors.
The fight, he stressed, is principally to maintain production rather than to grow.
In addition, the cost of input factors such as feed has gone up significantly, and producers are having to put more in to achieve the same results as previously.
Despite the industry’s challenges, however, 2024 is shaping up to be a better year and Nystøyl said worldwide production growth for 2025 is around 4%-5%.
Ida Seljevoll Skancke
Ecuador shines in shrimp outlook
On the second full day of the summit, Gorjan Nikolik turned to the shrimp industry.
The star performer right now is Ecuador, he said, where production of L.vannamei (white leg shrimp) had rocketed 14% in 2023 and this year was still expected to grow by between 2% and 4%, reaching around 1.3 million tonnes. Mexico, Venezuela and Brazil are also growing.
In India, Nikolik said, farm production has been curtailed by low prices and some farmers are switching from vannamei to monodon (black tiger prawns). China continues to grow its shrimp production, however, with Rabobank estimating 4% growth for that country’s total shrimp production.
Reconciling China’s official production statistics with industry estimates was hard, however, he stressed.
Global shrimp production
Vietnam is back to growth after experiencing a contraction in 2022 and 2023, the Rabobank survey suggests, with a 1% increase expected this year bringing production to just over 700,000 tonnes – still considerably below the industry’s 2021 peak, however.
The global picture shows 2024 coming in with 1% growth, to just under six million tonnes, accelerating to 2% next year. The biggest producers are Ecuador, China, India and Vietnam.
Kontali analyst Ida Seljevoll Skancke also gave a presentation on the dynamics of the shrimp market.
Key takeaways were, she said:
• China: Decline in imports in 2024, minor recovery expected by Q4
• EU: Strong H1 imports, positive outlook for the rest of the year; and
• USA: Early year growth, slower summer, but Q3 recovery.
The Chinese market remains pivotal to the shrimp industry’s success, she stressed, but EU countries and the US are becoming enthusiastic importers of shrimp again.
