Fishery products

Preliminary estimates for 1999 indicate a further reduction in world fish production following a substantial decline to 117 million tonnes in 1998. The decline in 1998 was due primarily to decreased catches of small pelagics fisheries in Chile and Peru, caused by the "El Niño". This decline affected mainly fishmeal production, while food fish production was unaffected. China is now by far the top producer of fish with some 38 million tonnes in 1998. Japan was the second major fishing nation with a catch of 5.9 million tonnes. The importance of aquaculture continues to expand, especially for freshwater species such as carp.

Developed countries accounted for more than 80 percent of total imports of fishery products in 1998 in value terms. A number of the major importing countries have adopted new quality control measures that may have significant implications for trade (see box). Japan was again the biggest importer of fishery products in 1998, accounting for some 24 percent of the global value, though a substantial decline from the 30 percent share that this country used to have. Japanese imports of fish and fishery products have declined due to the economic recession. The European Community further increased its dependence on imports for its fish supply. The share of the EC in the value of world imports expanded to 38.5 percent. The United States, besides being the world's third major exporting country, was the second biggest importer of fish products in 1998.

The increase in net earnings by developing countries - deducting their imports from the total value of their exports - is impressive, rising from $ 5 200 million in 1985 to $ 15 000 million in 1998. For many developing nations, fish trade represents a significant source of foreign currency earnings.

Shrimp

After almost two years of economic recession, Japan seems to be recovering. As a consequence, shrimp consumption improved in the last quarter of 1999 and prices began going up for all major species and sizes. The strong yen is also playing an important part in stimulating shrimp imports into the Japanese market. It is expected that Japan will again be the world's major importer of shrimp and the price setter for all tropical shrimp. On the other hand, US and European shrimp consumption, although strong in 1999, is expected to suffer in 2000 from lower supplies and higher prices. Supplies are shrinking as a result of disease and weather problems affecting several major producing countries.

The white spot virus continues to destroy shrimp in Ecuador and total lost export earnings are estimated at $ 500 million in 1999 compared with last year's export. Only 30 percent of the shrimp farms in Guaymas are operational at present, as most of the ponds are dried up. Many farmers harvested their production earlier than usual, in June and July 1999, and have not re-seeded the ponds for fear of losing everything. Only very few shrimp ponds are being used to carry out experimental studies, with the aim of seeking new ways to tackle the effects of the fatal disease. As a result of the disease, exports from Ecuador fell by 22 percent between January and September 1999 compared to the same period in 1998, to about 82 000 MT valued at $ 534 million. It is reported that unemployment has increased by 40 percent in the shrimp producing area, with women being the most affected. Significant changes are not likely with regard to future supplies from Latin America. White spot disease has advanced, and recent outbreaks have been reported in the northern region of Peru where many shrimp ponds are situated.

The Mexican West Coast is the only wild shrimp fishery area that has shown some steadiness. Consequently, these supplies have greatly filled the gap created by the shortage of shrimp from other sources. In fact, shrimp production in Mexico for this year appears to be some 15 percent higher than last year's average. The Indian shrimp culture industry experienced a draw-back caused by heavy rain and hurricanes in the second half of the year.

Shrimp imports into Japan remained low through the first nine months of 1999, at 174 800 tonnes, but began to rally in the fourth quarter. India expanded its shrimp exports to Japan in 1999, and was able to take the top position among shrimp exporters. On the other hand, Indonesia lost its top position among suppliers to the Japanese market, as the country experienced a strong reduction in shipments. Shrimp prices in Japan bottomed out in mid-1999 as imports strengthened in the last quarter. The strong yen combined with improved domestic demand, created a good environment for higher price levels. In December 1999, prices of practically all sizes were 10 percent above previous year's levels. The most recent data show Japanese shrimp prices ahead of US prices, which will make the country competitive again in attracting shrimp world-wide supplies. Imports are expected to improve in the year 2000, as Asian suppliers will go back to their traditional customers.

Shrimp imports into the United States increased considerably through September 1999. Thai and Mexican shipments were ahead of the September 1998 results. Higher imports in September 1999 made the US shrimp imports reach a new record in the first nine months of 1999. Almost 240 000 tonnes of this product were imported, exceeding the corresponding 1998 imports by 10 percent. Year-end demand for shrimp in Europe was also strong, as shrimp played an important role in the Christmas and Millennium celebrations. In the early part of 2000, a weaker Euro led to increased prices in the European market for all main tropical species, where European traders have to compete with Japanese and US buyers.

The strong demand in Japan, combined with less availability from the aquaculture industry, is expected to substantial increases in shrimp prices in the course of year 2000. The average shrimp price for the end of 2000 could be some $ 2.00/kg higher than the end of 1999 price levels.

Tuna

The downward spiral of tuna prices continued in the fourth quarter of 1999. The price level in December was the lowest in 25 years. The main reason for this downward trend was abundant catches. Some observers expect lower catches in the coming months, as the present price level does not cover costs. Nevertheless, it is unlikely that the situation will reverse suddenly. All coldstores are full and winter in northern regions is not the best season for tuna canning. Therefore supply is expected to continue to exceed demand in the opening months of 2000.

The market price for frozen skipjack fell to an all time low of $400 per tonne, c&f Bangkok, in November 1999, but in early December it improved to $450 per tonne. The price increase was caused by the decline in skipjack catches in all major tuna fishing areas. Ex-vessel prices of albacore softened in late 1999, decreasing by $165 per tonne for the November/December shipment to $2 300 per tonne.

Groundfish

Prices for all groundfish species in the United States and in Europe were relatively depressed in 1999. The oversupply of Alaska pollack on the market created a bleak market situation for all groundfish species. The market for single frozen Alaska pollack blocks continues to be unsettled in early 2000, and some offers at lower prices are being made in an attempt to encourage sales. The market for fillets is also weak mainly due to the fact that current inventories are sufficient for the present demand, and also because the new season is about to start in a few weeks. Lower Alaska pollack prices took hake and cod prices down with them.

In the last quarter of 1999, the cod market in Europe improved somewhat, while the US market remained weak. In December 1999, cod blocks sold in the United States at $2.03/lb, which was 25 percent lower than one year earlier. Alaska pollack blocks were selling at 33 percent less, while hake price declined by 15 percent during this period. On the European market, the price declines for groundfish species were more moderate, but a 10-15 percent drop was experienced there too. Lower catches in 1999 did not arrest the price decline because inventories were more than sufficient to cover demand. Consumption was probably higher in 1999, because of the lower prices.

Groundfish prices should improve in 2000, after years of depressed levels. Several of the major groundfish species face reduced fishing quotas in 2000. Although the US quotas have increased, the reduction in Russian waters is much higher, for a combined reduction of Alaska pollack quotas of more than 160 000 tonnes. In the North East Atlantic, quotas for all major groundfish species will be slashed even further.

For Atlantic cod, haddock and saithe the reduction amounts to almost 240 000 MT. The hake quota in Argentina is not fixed yet, but observers expect something around 100 000 MT for the year 2000. The hake resource in Argentina/Uruguay is severely overfished and catches are expected to be only around 300 000 tonnes.

These cuts will have a severe impact on production of both fillet products and saltfish and consumers will be faced with a lower supply than in previous years. Prices are expected to recover very quickly, making up for what they lost in the course of 1999, and are also likely to exceed the 1998 level sometime in mid 2000. The focus for the industry will be on the supply side and this may increase prices for fishermen. The question is the extent to which consumers are willing to accept price increases.

Other fishery products

Octopus catches have been strong in the Eastern Central Atlantic, and prices are very low on the Japanese market. Though consumption is stimulated by these low prices, cold storage holdings are record high. In the coming months, supply is expected to decline, and a certain improvement of the market situation is likely to occur. Illex prices declined steadily until August 1999, due to excellent catches in the Southwest Atlantic. On the contrary, Japanese catches in domestic waters were rather disappointing, which led to an inversion of the general trend, with prices starting to climb. However, the December 1999 squid price level was still below the December 1998 one. Squid supply in the year 2000 is forecast to be less than the 1999 level.

Fishmeal production during 1999 was estimated at 5.7 million tonnes, up from the 4.8 million tonne low of 1998. The normalisation of the Peruvian catch and fishmeal output was the main reason for the higher production. Fishmeal exports by the five major fishmeal trading countries increased by 0.7 million tonnes in the first nine months of 1999 reaching 2.1 million tonnes. The forecast for the year 2000 indicates a production similar to the one recorded in 1999. Prices are expected to increase somewhat in the year 2000, as demand in Asia is recovering, and price levels of competing products are also increasing.

World fish oil production reached 1.2 million tonnes in 1999, up from 0.8 million tonnes in 1998. The increase in fish oil availability was coupled with price falls. However, competing vegetable oils also reported a decline in price levels. Fish oil production in 2000 is expected similar to the 1999 output.

Production
	1993-95 Average	1996	1997	1998
		Million tonnes
World total	110.9	119.9	122.1	117.0
China1	24.0	31.9	35.0	38.0
Japan	10.0	9.5	7.9	5.9
India	7.4	6.8	6.7	5.5
United States	7.2	6.9	6.1	5.1
Russian Federation	5.8	5.4	5.4	4.5
Indonesia	4.7	5.3	5.4	4.4
Peru	4.2	4.7	4.7	4.3
Chile	3.9	4.3	4.4	3.6
Thailand	3.5	3.5	3.5	3.5
Norway	2.7	3.0	3.2	3.3
Korea, Rep. of	2.7	2.8	2.6	2.4
Philippines	1.6	2.1	2.2	2.1
Iceland	2.2	2.1	2.1	1.7
Others	30.9	31.7	32.9	32.7
1 Excludes Taiwan Province and Hong Kong SAR.

Exports
	1993-95 Average	1996	1997	1998
		Million $
World total	46 875	52 854	53 3317	50 972
Norway	2 714	3 415	3 399	3 661
Denmark	2 323	2 699	2 649	2 898
China1	2 233	2 857	2 937	2 656
United States	3 264	3 148	2 850	2 400
Thailand	4 015	4 118	4 329	3 971
Canada	2 184	2 291	2 271	2 265
Indonesia	1 557	1 678	1 621	1 628
Chile	1 378	1 697	1 782	1 597
China, Taiwan Prov.	1 921	1 762	1 780	1 580
Spain	1 008	1 461	1 471	1 529
Iceland	1 248	1 426	1 360	1 434
Netherlands	1 393	1 470	1 426	1 365
United Kingdom	1 137	1 308	1 264	1 549
Korea, Rep. of	1 437	1 509	1 376	1 246
Russian Federation	1 609	1 686	1 356	1 170
India	1 001	1 116	1 128	1 135
France	920	1 003	1 098	1 097
Germany	781	1 056	977	1 053
Others	10 471	13 159	13 428	12 227
1 Excludes Taiwan Province and Hong Kong SAR.

Imports
	1993-95 Average	1996	1997	1998
		Million $
World total	50 704	57 217	56 727	54 823
Japan	16 060	17 024	15 540	12 827
United States	6 825	7 080	8 139	8 579
Spain	2 791	3 135	3 085	3 546
France	2 858	3 194	3 062	3 505
Italy	2 223	2 591	2 572	2 809
Germany	2 227	2 543	2 363	2 624
United Kingdom	1 806	2 065	2 142	2 384
Denmark	1 361	1 619	1 521	1 704
China (Hong Kong SAR)	1 618	1 928	2 097	1 612
Netherlands	1 000	1 142	1 107	1 230
Canada	923	1 159	1 129	1 195
Belgium	896	966	979	1 061
China 1	791	1 184	1 183	991
Portugal	687	783	750	926
Norway	374	536	562	675
Sweden	455	587	596	639
Korea, Rep.	694	1 054	1 018	562
Thailand	824	818	866	814
China, Taiwan Province	565	613	660	482
Australia	406	475	483	442
Brazil	287	482	484	455
Singapore	615	642	627	416
Switzerland	387	396	361	387
Poland	161	240	262	304
Others	3 687	4 678	4 841	4 361
1 Excludes Taiwan Province and Hong Kong SAR.