4. International trade

4.1. Sponge Exporters

An important share of the world sponge production enters international trade either in raw or in processed form. While developing countries in the Mediterranean and the Caribbean are the main raw sponge producers, the final processing is carried out in developed countries: Greece, France, Italy, Federal Republic of Germany. The main final markets for sponges are also in the developed world: The U.S.A., Japan, France, Italy, Spain.

Tunisia is the world's main sponge exporter with about 90% of the Tunisian sponge production going into international trade. On average 80 mt were exported in the 1980's mainly to the French market. However the decline in production after 1986 will reduce the Tunisian performance as sponge exporters in the years to come. Cuba is a distant second producer with 41 mt of sponges exported in 1986, mainly to the EEC market (Tab. 4). Cuban exports show a upward trend reflecting the improved situation of Cuban sponge beds. The generally lower quality attached to the Cuban sponge is reflected in its unit value: in 1986 the Cuban product was worth about 14.50 ECU/kg, roughly half the value of the Tunisian sponge.

Table 4. Sponge exporters * (in mt) from 1981 to 1986.

* based mainly on statistics of importing countries
** mainly re-exports

France is exporting about 30 mt sponges, mainly re-exports of both raw and processed sponges. Its market is almost exclusively inside the EEC - Italy, Belgium and the Federal Republic of Germany. The decline of Greece as the leading sponge industry is reflected in its export figures: 22 mt in 1986, as compared to 55 mt in 1979. The loss of the Japanese market where imports from Greece declined from 20.5 mt in 1982 to 1.0 mt in 1986 reflects the problems of the Greek sponge industry.

The list of main exporting countries also includes countries such as Turkey, Libya and Bahamas which do not report any sponge production (Tab. 4). Exports from the Philippines, mainly directed to Japan have declined over the years, reflecting problems in supply. The Philippine product is the lowest valued sponge on the Japanese market. Its unit value is 2500 yen/kg, while all other products, all from the Mediterranean exceed 3600 yen/kg.

4.2. Sponge Importers and Markets

In the 1980's total world sponge imports varied between 260 mt to 300 mt, this figure exceeds world production as some imported sponges are re-exported. France accounts for about 40% of world sponge imports, followed by the U.S.A. (30%). Japan, Italy and Spain report sponge imports between 20 – 30 mt per year, while imports of other countries do not exceed 20 mt. Sponge imports and markets are thus concentrating in five countries.

Table 5. Sponge importers (in mt) from 1981 to 1986.

4.2.1. France

France is by far the main sponge importer in the world absorbing between 2/3 and 3/4 of the world production. Total value of French sponge imports varies between 3 – 3.5 million US$ per year. In volume terms, these imports reached a peak of 139 mt in 1983, to fall back to about 100 mt in 1986. Tunisia continues to be the main supplier of sponges to France, but in recent years its share of the French sponge market dropped from 60% to 50% (Tab. 6). In 1987, Tunisia's share almost collapsed. Cuba took advantage of the drop in Tunisian production, due to diseases and overfishing, and now accounts for more than 40% of French sponge imports. As mentioned above more than one third of French sponge imports are re-exported to neighbouring EEC countries. Nevertheless France is the world's main market for natural sponges, estimated at more than 1 million units per year, worth some 35 million Francs, roughly 6 million US$. Three main French importers of sponges into France can be identified (see appendix). They control about 80% of the French imports, another 15 smaller sponge importers/wholesaler are involved in this trade.

More than 90% of French sponge imports are raw. Traditionally, sponges are bought from the producer by weight and in bulk. The shortage of sponges in recent years led this system to be steadily replaced by sales of sponges by piece, allowing the elimination of sponges of small size, low quality or uncommercial shapes.

Table 6. French sponge imports (in mt) from 1981 to 1988.

In France, the imported raw sponges are bleached and cut, then they are sold through the main wholesale channels (department stores, pharmaceutical groups, etc.) to the retail shops. The main retail outlets for natural sponges are pharmacies, baby shops, perfumeries and natural product shops, where, however, natural sponges account only for a small share of the revenue. Prices of sponges are highest in pharmacies and perfumeries, while prices of sponges sold in department stores are about 20–30% lower, but the quality and shapes are less attractive.

Prices vary greatly by the size, shapes and species of sponges. The species sold at the highest price is Spongia officinalis, followed by Hippospongia communis, the main species available on the French market. The size is extremely important, a small (5–6 cm diameter) sponge sells at below US$ 2.00, while a nicely cut sponge of 20 cm diameter may exceed US$ 30.00 (Tab. 7).

In recent years, prices have been on the upswing as demand by far exceeds supply. In two years, retail prices doubled for medium and large-sized sponges, while small sized sponges almost trebled in price. The move back to natural products has re-inforced the market position of natural sponges, especially bath sponges, against artificial sponges. On the other hand, the recent disease of the Mediterranean sponges has reduced supply still further, leaving a great share of demand unsatisfied. Some French department stores are no longer selling sponges as the prices are beyond the reach of their customers.

Table 7. Retail prices of sponges in France.

4.2.2. U.S.A.

The U.S.A. is the second major market for natural sponges. After the near collapse of the entire Florida Key sponge fisheries, demand is mainly satisfied by imports. In the 1930's, Cuba was the main sponge exporter to the U.S.A., reportedly more than 200 mt of sponges were exported annually. The Bahamas, Italy and Taiwan (Province of China) are at present the main suppliers of marine sponges to the U.S. market.

Table 8. U.S.A. sponge imports (in mt) from 1982 to 1988.

In the 1980's, U.S. imports of sponges almost trebled from 40 mt in 1982 to 120 mt in 1987. In 1986 and 1987, the French market offering higher prices, attracted more Tunisian and Greek sponges leading to a decline in exports of these countries to the U.S.A.: Tunisia (-48%) and Greece (-61%). The depreciation of the U.S. dollar led Japanese sponge exports, mainly re-exports to the U.S.A. to decline from 14 mt in 1985 to 6 mt in 1986.

As for other countries, U.S. sponge imports and trade is not an important business in macroeconomic terms. In the 1980's, the value of US sponge imports oscillated between 1 and 1.8 million US$, a small amount of money when compared for instance, with U.S. shrimp imports valued at 1860 million US$. The unit value of sponges imported into the U.S.A. differs from country to country, being highest for Greece and lowest for Tunisia. But even for the same country, the unit value of imported sponges is subject to market conditions and availabiliy of competing products, Bahamas' sponges are thus fetching US$ 10.00/kg one year, US$ 4.30/kg the next, finally climbing to US$ 20.00/kg. In the U.S.A., sponges are mainly used as bath sponges, the retail prices vary with the size: a small sponge (below 10 cm diameter) sells at about US$ 5.00 – 6.00, a medium-sized sponge US$ 10.00 – 15.00, a big sponge easily exceeds US$ 20.00. As for the French market, the U.S. market is reported to be undersupplied and importers are looking for new sources of supply.

4.2.3. Japan

Japanese sponge imports vary substantially from one year to another: In 1982 a record 36.4 mt were imported, while in 1984 Japanese sponge imports were less than half this amount. This decline was caused by the problems of the Greek sponge industry, whose exports to the Japanese market collapsed from 20.5 mt in 1982 to 4.5 mt in 1987 (Tab. 9). In recent years, Japan filled part of the gap by higher imports from Egypt, Turkey and Libya. Philippines sponge exports to Japan also declined from 8.6 mt in 1981 to 2.7 mt in 1987. About 70% of the imported sponges are entering the market while the remainder is lost in the cleaning and cutting process. The total Japanese sponge market, taking into account the exports which vary from 0.8 – 2.0 mt per year, is thus about 17.0 mt or about 500,000 bath sponges.

Similar to the oscillations in quantity, total value of Japanese sponge imports varies between 180 million yen and 539 million yen (0.75 – 2.20 million US$). Japanese importers indulged in overbuying in the early 1980's and are still selling off stocks from this period. Therefore, the present decrease in import prices as a result of the strong yen has not been passed on to the consumer.

Table 9. Japanese sponge imports (in mt) from 1980 to 1987.

The Philippines sponge sells at the lowest price because of its very soft texture and its general unsuitability as a bath sponge. It is cut into tiny pieces (2–3 cm diameter) and used as stationery (wetting stamps etc.). Its unit value is as low as 1500 – 2500 yen/kg, while the Greek sponge enters the market at 14000 – 16000 yen/kg. Other Mediterranean sponges from Egypt, Syria and Libya are averaging slightly below the Greek top price. Their unit value is 10000 – 12000 yen/kg. This enormous price differential shows that if the Pacific Islands want to start sponge culture for the Japanese market, they need to cultivate the most appreciated Mediterranean species.

Importers are usually also processors of sponges. Sponges are imported into Japan uncleaned, compressed and dried. They are then cleaned and cut. After processing the sponges is sold to cosmetic firms and baby product companies which retail them under their own brand name. Sponges are found in department stores either in the baby product section or in the “natural product” section.

Table 10. Retail prices of sponges in Japan (1988).

* for stationery use 2 cm in diameter

As in other markets, sponges are used almost exclusively as bath sponges. Only a small quantity, mainly originating from the Philippines is used as stationery. Their price is as low as 250 yen (about US$ 2.00). A high quality sponge from Greece of 6 cm diammeter sells at 1200 yen (about US$ 10.00). A Spongia officinalis of 20 cm diameter reaches 3600 yen (US$ 30.00), 4 times the import price (Tab. 10).

Unlike in other markets, opportunities for expansion seems to be low in the Japanese sponge market. Synthetic products are taking over the market, especially for low quality sponges. In many department stores it is impossible to find sponges as demand is too low. The disease in the Mediterranean and the resulting shortage in products has not yet had any effect on the Japanese market, as there are still stocks left over from the early 1980's.

4.2.4. Italy

Italy has a long tradition as sponge producer and processor, however, at present Italian sponge production is small and confined to Sicily and Puglia. While in the south of the country the processing is still carried out on a semi-artisanal basis, the main sponge processing industries are concentrated in the north, especially in Trieste and around Mantova. The use of sponges in Italy underwent substantial changes over the past twenty years. Before that date, more than 70% of the marine sponges were used by industries (pottery and artistic printing). At present this share is 30%, while the majortiy of the sponges processed in Italy is used as bath sponges. Sponges with a less attractive shape go to industrial usage, but requirements there are very high.

Italian sponge imports vary between 16 – 30 mt per year with Tunisia and France as the main suppliers (Tab. 11). Sponges are mainly imported in raw form and then processed in the country. Only in recent years, imports of already processed sponges, mainly from France have begun, accounting now for some 12–15% of imports. Greek sponges, though representing only a small share of the Italian market obtain the highest price (US$ 75.00/kg) while the Tunisian sponge is at the lower end with US$ 45.00/kg. As a reaction to the 1987 shortage of supply, some Italian importers tried out Philippine and Cuban sponges. These products, however, were found to be completely inadequate for the Italian market. Other processors stopped activity in 1987/88 as supplies from the Mediterranean were short and too expensive, hoping for a soon recovery in resources. After the bad experience with sponges from outside the Mediterranean region the only species that Italian importers will accept are Spongia officinalis.

Table 11. Italian sponge imports (in mt) from 1981 to 1986.

From the spugnificio (the sponge processor) the sponge is sold directly to pharmacies and perfumeries, the main retail outlets for sponges. Some sponges are also offered by the main department stores - Standa, Rinascente, but the quality is generally below those offered by the other outlets. The retail prices asked for in Italy exceed those of other countries, as a result of the large profit margins of retailers. The lowest price of a sponge Hippospongia, about 6 cm in diameter and not nicely shaped is 9000 Lire about US$ 7.00. A medium-sized sponge, Spongia officinalis, height 13 cm sells at 15000 – 20000 Lire (US$ 12.00 – 16.00), while a large sponge easily exceeds 30000 Lire - US$ 25.00 (Tab. 12).

Despite these high retail prices, natural sponges are selling well in Italy and processors are desperate for supplies. The sponge disease in the Mediterranean led to an acute shortage, especially of Spongia officinalis, the preferred species by the Italian consumer.

Table 12. Retail prices of sponges in Italy (1988).

4.2.5. Spain

Spanish sponge imports are quiet stable at around 20 mt (Tab. 13). Since 1984, Tunisia has been the main supplier accounting for more than half the Spanish supply. The U.S.A. is the second major exporter of sponges to Spain, reaching 5000 Pst/kg unit value, while the Tunisian product enters the Spanish market at half this price. Quite surprisingly France and Greece export only small quantities to Spain, a feature which might change now that Spain has become a member of the EEC.

All sponges enter Spain in raw form and are processed in the country. About 30% of the sponges enter the country in the region of San Sebastian, 20% in Barcelona and the remainder comes in through small ports all over the country. As in other European countries, the main employment is as bath sponge. Retail prices are slightly below the level of other Mediterranean countries - France and Italy.

Table 13. Spanish sponge imports (in mt) from 1982 to 1986.

4.2.6. Federal Republic of Germany

The Federal Republic of Germany accounts for only 5% of the world market of sponges. Sponge imports fluctuated between 13 – 18 mt (1981 – 1986), with a substantial drop in 1987 (value 0.9 – 1.3 million US$/year) (Tab. 14). The shortage of Mediterranean sponges was the main reason for this decline. Unit value of sponges entering the Federal Republic of Germany were as high as US$ 140.00/kg for Greek sponges in 1987, compared to US$ 100.00/kg in 1986. These high prices explain why Greek exporters directed larger quantities of their products to the German market, which is now the most important outlet for Greek sponges. German sponge processors are also producing for the European market, with Italy - Standa and Rinascente, as main outlets.

Table 14. Sponge imports into the Federal Republic of Germany (in mt) from 1981 to 1989.

Sponges enter the country mainly raw. The processing is carried out by medium-sized industries concentrated in the north of the country. Sponges are used almost exclusively as bath sponges in the Federal Republic of Germany. Despite the high C.I.F¹ prices, retail prices are below those in France and Italy, as the profit margins of retailers are lower in the Federal Republic of Germany. However, also the quality of products sold in German shops seems to be below those of Italy and France. Thus a small (5–6 cm diameter sponge) sells at US$ 4.00 , a medium-sized sponge around US$ 10.00 , while US$ 15.00 are an average price for large-sized sponges (Tab. 15).

Main outlets are again perfumeries and drugstores, whilst substantial quantities are sold through chains of department stores. The recent boom of natural products has boosted demand for sponges on the German market. Shortage of supply is felt by all importers/processors, and alternative sources of supply would be appreciated, provided of good quality. The experience of German importers with sponges from Florida have been quite positive.

Table 15. Retail prices of sponges in the Federal Republic of Germany (1988).

* for artistic use

4.2.7. United Kingdom (U.K.)

The U.K. is only a small market for sponges. Imports vary between 3 – 4 mt, with treated sponges from Greece as main product. Despite the small quantity consumed, sponges can be found in all main cosmetics/toiletry retailing chains and in specialist natural product chains. The sponges sold there generally have no brand name but the writing “Greek sponge” or “Mediterranean sponge”. Most of the sponges sold in the U.K. are used as bath sponges. In home/household furnishing high street chains, unbleached sponges are sold at about 0.50 GBP less than the bleached sponges for home decorating purposes. They are used to gives walls a marbling effect very popular in U.K. at the moment.

The prices for sponges in the U.K. are incredibly low as compared to the prices asked for in other European countries. Probably the relative small size of the market allowed traders to live on old stocks so that the British consumer has not yet experienced the 1986–1988 price increase (Tab. 16).

Table 16. Retail prices of sponges in U.K. (1988).

* for stationery use (2 cm in diameter)

4.3. Market Prospects

The recent disease in the Mediterranean has created a substantial shortage in supply which is felt in European countries, while supplies seem to be sufficient in the U.S.A. and in Japan. In Europe, the boom of natural products increased the usage of marine sponge especially as bath sponges. The present light supply combined with strong demand created some market distortions:

• large-sized sponges are presently sold at prices out of the reach of the consumer, in fact only very exclusive perfumeries are presently offering large-sized sponges. In only two years, price of large-sized Mediterranean sponges have doubled, and not all the increase has been passed on as processors are still working on old stocks.

• small sponges, not nicely cut or of less appreciated quality (Hippospongia communis) are presently sold at prices for which in 1986 the consumer could buy a medium-sized Greek bath sponge.

The impression is that the present over pricing will lead to consumer resistance despite the present interest for natural products including marine bath sponges. Importers and processors are looking for alternative sources of supply. The Pacific sponge aquaculture project could fill the supply gap, provided the highest quality species, Spongia officinalis is produced and is shipped to the European market at convenient prices.

The Japanese market seems to be over-supplied at present. High prices and the increasing usage of synthetic sponges depressed the market for natural sponges. In the near future no improvements are likely. Similarly the U.S. market seems to be well supplied by Caribbean sponges a resource which seems to have recovered after the 1930's disease.