SEAFOOD HIGHLIGHTS. Shrimp sector under stress

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1 SEAFOOD HIGHLIGHTS 18/07/2008 Shrimp p. 1 Tuna p. 7 Groundfish p. 12 Cephalopods p. 16 Fishmeal p. 20 Fish Oil p. 22 Seabass/bream p. 23 Salmon p. 26 Tilapia p. 30 Shrimp sector under stress During the first quarter of 2008, the shrimp sector continued to suffer from soaring fuel prices and from the general economic slow down. Due to the general reduction of the purchasing power in major shrimp importing countries, consumers were more reluctant to buy relatively expensive food commodities like shrimp, and also dropped the habit of going out to restaurants, the main outlet for shrimp consumption. Record skipjack prices Tuna for canning continued to be in short supply worldwide. The current import price in Bangkok is about US$2000/MT for frozen skipjack, the highest in history. The impact of increasing raw material on canned tuna is already visible with strong growth in prices everywhere. Groundfish prices go up The upward trend in Alaska pollack prices is impacting the world groundfish market. Decreasing catch quotas led to a 16% increase in prices during the first half of the year. Difficult squid market 2008 was again a year of low prices, created by heavy landings of Illex squid. Argentine traders were, similar to what happened in the previous year, unable to take advantage of good supplies, and discounted Illex prices to extremely low levels. Less fishmeal production Fishmeal production was quite disappointing in May 2008, after a good production month in April. Prices started to move up in the course of Fish oil prices sky high The current high price for vegetable oil has an impact on higher prices for fish oil. Fish oil prices started to decline in June 2008, after record highs. Seabreampprices extremely low Special Seabass Seabream The present situation in bass and bream markets is somewhat particular with prices for bass fairly stable at acceptable levels for producers. At the same time, bream prices are record low for this period of the year. Economic crisis impacts Special SeFarmed salmon market Special Salmon The major factor impacting world farmed salmon markets at present is the economic situation influencing demand and the supplies from Norway and Chile. Salmon volumes are holding up quite well but there still is pressure on prices. Lower Chinese tilapia production and exports Tilapia The Feature impact of the loss of tilapia production during the last cold winter becomes apparent on the world tilapia market. Prices of tilapia are increasing very strongly in all main markets. GLOBAL TECHNICAL AND TRADE CONFERENCE O SHRIMP 6-9 November 2008, Guangzhou, China For further information please Special visit: Seabass Special

2 About GLOBEFISH GLOBEFISH forms part of the Fish Utilization and Marketing Service of the FAO Fisheries Department and is part of the FISH INFOnetwork (see below). It collects information from the main market areas in developed countries. Part of its services is an electronic databank and the distribution of information through the GLOBEFISH European Fish Price Report, the GLOBEFISH Seafood Highlights, the GLOBEFISH Research Programme and the GLOBEFISH Commodity Updates. The GLOBEFISH Seafood Highlights are based on information available in the databank, supplemented by market information from six regional services which form the FISH INFOnetwork: INFOFISH (Asia and the Pacifi c), INFOPESCA (Latin America and the Caribbean), INFOPECHE (Africa), INFOSAMAK (Arab countries), EUROFISH (Eastern Europe) and INFOYU (China). GLOBEFISH Seafood Highlights are distributed to the subscribers of: INFOFISH Trade News, INFOPESCA Noticias Comerciales, INFOPECHE Nouvelles Commerciales, through EUROFISH and INFOYU. GLOBEFISH Seafood Highlights are also available in electronic form. Authors: Karine Boisset (shrimp), Paola Sabatini and Javier Lopez (groundfish), Nicki Holmyard (small pelagics), Helga Josupeit (tuna, cephalopods, tilapia,.fishmeal and oil), Audun Lem (salmon, seabass and seabream). The statistics were put together by Paola Sabatini, Karine Boisset, and Javier Lopez. For subscription details please contact: GLOBEFISH, FIIU/FAO Tel: (39-06) Viale delle Terme di Caracalla Fax: (39-06) Rome, Italy Web: All rights reserved. No part of FAO/GLOBEFISH Highlights may be reproduced, stored in a retrieval system, or transmitted in any form or by any means (electronic, mechanical, photocopying or otherwise), without the prior permission of FAO. Requests for use of this material (including purpose and extent) should be addressed to the Director, Publications Division, Food and Agriculture Organization of the United Nations, Viale delle Terme di Caracalla, Rome, Italy. Bibliographic reference: FAO/GLOBEFISH Seafood Highlights. A quarterly up-date based 2008 on the GLOBEFISH FAO/GLOBEFISH Seafood Highlights, Databank (2/2008): p. 32

3 SHRIMP Shrimp sector under stress During the first quarter of 2008, the shrimp sector continued to suffer from soaring fuel prices and from the general economic slow down in the main importing countries. On the one hand, production and transport costs increased further and availability from major shrimp suppliers declined. On the other hand, due to the general reduction of the purchasing power in major shrimp importing countries, consumers were more reluctant to buy relatively expensive food commodities like shrimp, and also to go to restaurants, the main outlet for shrimp consumption in the main consuming areas. Situation of workers in shrimp industry under review The shrimp sector was also shaken by a new report which points the finger at human rights abuse and environmental disasters linked to shrimp production and processing. The report which was issued by the Solidarity Center (an organization of America s Union Movement), and mainly blamed Thailand and Bangladesh, was object to debate and scepticism. Shrimp farming and processing is a sector which has developed very rapidly in recent years and has generated income in many countries but has also been cause of concern with respect to environmental and social issues. In this context, FAO with NACA/UNEP/ WB/WWF developed the International Principles for Responsible Shrimp Farming in 2006 in order to provide a basis for a more sustainable development of shrimp Shrimp (frozen raw): Japan Viet Nam Indonesia India China Thailand Russia Canada Greenland Philippines Argentina Australia Malaysia Others Total Source: GLOBEFISH AN farming. There have been clear improvements in this area in recent years but one should always be on the lookout to prevent possible abuses but also to make sure that allegations are justified since they jeopardize work in poor countries. Japanese market stable Japanese demand is expected to increase in July, when the mid year salary bonus will reach many households. It is interesting to note, that the price margin of black tiger versus vannamei shrimp is shrinking in Japan probably as a reaction to more black tiger reaching the market. Indications for wild caught shrimp, both warm and coldwater species, are stable despite the continuing upward trend in fuel prices which is likely to maintain demand for higher prices in this category. Overall, there is not much margin for the expected price increases. Wholesale prices Shrimp*: Japan US$/kg 16/20 31/40 Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul *Black tiger, headless, shell-on, origin: Indonesia Source: INFOFISH Trade News; GLOBEFISH AN GLOBEFISH Seafood Highlights 2/

4 SHRIMP For the first time in many years, Japanese imports of raw frozen shrimp showed a growth, although minimal, corresponding to the first quarter of the year. Backed by the strong and stable yen, imports increased from most of the major sources: from Indonesia to Bangladesh, with the exception of China. Considering the species farmed in these countries, it appears obvious that imports of black tiger shrimp also increased during this period, particularly from India, Myanmar, Bangladesh but also from Vietnam and Indonesia; however vannamei were also imported from the last two sources. Upward price trend for vannamei has created stronger demand for black tiger shrimp. For this year s Golden Week festival, Japanese supermarkets launched promotional campaigns for black tiger shrimp along with vannamei. Low US shrimp demand A survey based on a representative sample of US households indicates that consumer confidence dropped sharply in June, to a level which is the fifth-lowest ever. But, how much this is effectively affecting shrimp consumption, is not very clear. Traditionally, shrimp is considered an upper-end product, and economic crisis in the USA have always resulted in lower shrimp consumption. However, some recent reports indicate that shrimp might be less affected by the present crisis than other food products. Shrimp: USA...Jan-March Thailand Indonesia Ecuador China Viet Nam Malaysia Mexico India Bangladesh Guyana Venezuela Peru Others TOTAL Source: NMFS US imports of shrimp in the first quarter of 2008 totaled tonnes worth US$ 862 million. These figures show a 2% reduction in quantity and a 0.7% increase in value, compared to the same period in Monthly shrimp imports in the USA are generally slow until May, after which they start to recover, just before the offset of summer. Wholesale prices Shrimp*: USA, Japan US$/lb Indian white, Tokyo Gulf brown, New York Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan *Frozen, headless, shell-on, count Source: INFOFISH Trade News, GLOBEFISH AN 10205, Shrimp (by product forms): USA...Jan-March Tonnes 1000 US$ Tonnes 1000 US$ Peeled frozen Other frozen Breaded Other pre Headless shell-on frozen All sizes < > / / / / / / / Other prod TOTAL Source: NMFS 2 GLOBEFISH Seafood Highlights 2/2008

5 SHRIMP In the first quarter of 2008, the main imported product was headless shell-on frozen shrimp, with tonnes accounting for 42% of total imports. This category reported a 5% growth compared with the same period of The unit value of this product grew by 7%, and as a result, total value of imports of this category rose by 13% reaching US$ 373 million. The second most imported product during the period under review was peeled frozen shrimp, which accounted for 32% of total foreign supply of shrimp ( tonnes worth US$ 286 million). Compared to the first quarter of 2007 sales of this product to the US grew by 11% in terms of volume and by 4% in terms of value. Breaded frozen shrimp and other frozen preparations continued to show the decreasing trend already experienced in 2007, and imports fell for both categories. Thailand remained the leading supplier of shrimp to the US market with tonnes in the first three months of 2008, representing 28% of the total volume. Sales from this country fell by 12% (both in volume and value). Indonesia was the second main supplier, with tonnes and a remarkable growth in sales, both in volume and value. It is interesting to note that in terms of volume, the third supplier was Ecuador, with tonnes, while in terms of value, the third exporter to the US was Viet Nam (US$ 95 million). Probably the main reason for this difference is due to Ecuadorian sales which are mainly frozen shell-on while 46% of total Vietnamese sales are peeled frozen shrimp, which have a higher unit value. Chinese sales have not recovered from the problems suffered during 2007, and registered once more a reduction in trade. Sales in the first quarter of 2008 from this country were 27% and 28% lower both in terms of volume and value ( tonnes; U$S 60.5 million). China remained the top supplier of breaded frozen shrimp, with 62% of total US imports, however, sales of this product fell significantly (- 37%), and Thailand managed to seize this market window. Sales from this nation grew by 53% in the period reviewed. Asian nations accounted for almost 80% of the total supply of peeled frozen and for over 95% of other frozen preparations and breaded frozen to the US market, while frozen shell-on shrimp has a higher share of Latin American supplies. After the WTO ruling against the anti-dumping policies of the US, India is trying to obtain yet another ruling from the Organization to assure that the US does not apply other mechanisms like the bond requirement - apart from the anti-dumping duties - since they consider it would be an additional barrier to trade. The US domestic shrimp supply in the first quarter of 2008 was 5% lower than in This sector is being negatively affected by the continuous increase in fuel prices, which has had a direct impact on operational costs. On the other hand, shrimpers cannot transfer the higher costs to consumers, since imported shrimp sets a ceiling to potential price increases. Consequently, many fishermen are reducing their fishing effort to reduce costs. Some analysts see in the sector a need to upgrade their technology and procedures in order to obtain a higher quality product, that could enhance the efforts that the industry is currently making to differentiate wild shrimp from aquaculture imported products. Higher shrimp imports into the EU Total EU shrimp imports continued to expand in the first quarter of 2008 with tonnes, a 5% increase compared to the same period last year. However, the expansion was more significant for intra-eu imports ( tonnes, +8%, with a boom in chilled/cooked Crangon imports (+58%)) than for extra-eu imports ( tonnes, +3%). In general, the average unit value remained stable compared to 2007 levels on almost all market. Notwithstanding the general upward trend of total EU shrimp imports, individual trends for key importing countries in this region were not always positive and were often in contradiction with 2007 developments. Southern Europe buys less shrimp in 2008 Spain and Italy which have experienced a constant expansion of their shrimp imports in recent years, recorded a sudden decrease at the beginning of this year with only tonnes imported by Spain (a 24% drop in volume and Shrimp: Spain...Jan/Mar China Ecuador Morocco Argentina Colombia Belgium Senegal Cuba Nicaragua Netherlands Venezuela Others Grand Total Source: GLOBEFISH AN GLOBEFISH Seafood Highlights 2/

6 SHRIMP Shrimp: Italy...Jan/March Ecuador India Denmark Spain Argentina Netherlands Malaysia UK China Others Total Source: GLOBEFISH AN a 29% drop in value compared to the same period last year) and only tonnes imported by Italy ( a 14% drop in volume and a 15% drop in value). This decrease was mainly due to lower shipments from major suppliers and in particular from Argentina. After having regained its leading position among shrimp exporters to Spain at the end of 2007, Argentina plummeted again to the fourth position and to the fifth position in Italy. As anticipated in the previous GLOBEFISH Highlights, Argentine shrimp catches were exceptionally low during the first quarter of 2008 (-78% on 2007 figures). Moreover, the situation is not expected to improve since official catch figures for April and May also appear extremely low. However, the decrease in imports was not only caused by the lack of availability of Argentine Pleoticus muelleri. Indeed, all major suppliers to Spain and Italy registered a drop in their exports to these two markets and this is particularly true for Vannamei producing countries. The two exceptions to this decrease among top suppliers were Morocco (+8% - mainly Parapenaeus longirostris) on the Spanish market and India (+27% - mainly Black tiger) on the Italian market. China, current leading supplier to Spain, saw its exports decrease by 16% on this market and by 57% on the Italian market. Ecuador also diminished exports to Spain (with a 6% drop in volume) and to Italy (with a 13% drop - still remaining, however, by far the number one supplier with 31% market share) and chose to exports more products to France. In terms of value, the decline was even more important as far as major exporters to Spain and Italy are concerned. Argentina recorded a striking 66% drop in value on the Spanish market. Consequently, the average unit value for all suppliers and all categories combined, lost 0.31cents/kg compared to last year on the Spanish market. For Pleoticus muelleri from Argentina the decrease was of minus 1.22/kg compared to last year unit value and of minus 5.75 on 2006 unit value. Malaysia saw its shrimp exports decrease on all European markets during the first quarter of 2008 (-3% on the French market, -44% on the Italian market, -33% on the UK market) and the situation is expected to worsen in the coming months due to a recent voluntary suspension of seafood exports to EU by Malaysian authorities following an EU inspection mission and in order to avoid a ban. French market in further expansion Contrary to Spain and Italy, France continued to expand its shrimp imports in the first quarter of 2008 with tonnes worth 11.3 million euro, an 11% increase on the same period last year in both volume and value terms. It is mainly in the frozen whole category that the expansion occurred (+ 15%), whereas processed products decreased by 4% and chilled products by 19%. Ecuador confirmed its position as the number one supplier to France with an outstanding 63% increase of its exports compared to last year (4 700 tonnes) strengthening its market share (20%). India reached the second place among top suppliers to France with a 4% increase. Brazil continued to loose ground with only tonnes corresponding to a 42% decrease on last year figures. The general growth of shrimp imports in France was also due to the recovery of Madagascan exports (+50% on last year figures). Madagascar has always been a traditional supplier of high value shrimp to the French market but demand had somewhat shrank in recent years to benefiting countries producing cheaper products. Colombian exports to the French market, which have been growing constantly in recent years, also recorded a notable 62% increase. Shrimp: France...Jan/March Ecuador India Brazil Madagascar Colombia Netherlands Belgium Others _ Grand Total Source: GLOBEFISH 4 GLOBEFISH Seafood Highlights 2/2008

7 SHRIMP Limited coldwater shrimp supply to UK market Since 2003,UK shrimp imports have continuously shown a negative trend. At the beginning of 2008 the situation changed with a slight increase in total shrimp imports: +3% in volume and +9% in value. In volume terms, this expansion concerned the frozen-whole category only (+8%) while the processed category registered a 3% decrease. In value terms, the situation was more positive particularly for the prepared and preserved sector where products entered the UK market at a higher unit value (+32 cents/kg). Traditional suppliers to the USA continued to increase their market shares in UK due to the unfavourable situation in the US market. Indonesia took the lead among warmwater shrimp suppliers with a 13% market share (+19% on last year figures). Thailand continued to strengthen its position in the UK and increased the volume of its exports to this country by 45%. The increase was also due to growing volumes of shrimp imports from Vietnam and Ecuador. On the opposite, Shrimp: UK Shell-on Coldwater Denmark Others Total Shell-on Warmwater India Indonesia Bangladesh Thailand Ecuador Honduras * * China France Others Total Cooked & Peeled Iceland Denmark Thailand Canada Norway Indonesia Malaysia Viet Nam Others Total Grand Total Source: GLOBEFISH AN Indian exports to the UK shrunk (-40% on last year figures), mainly due to high prices of black tiger (main species produced in India) compared to Vannamei. The proportion of coldwater shrimp imports in the UK continued to be much lower than in the past, but, despite the decrease experienced, UK remained the only significant market for coldwater shrimp in Europe with tonnes imported in the first three months of In this sector, Icelandic exports continued to decline and lost a further 10% at the beginning of 2008 compared to last year figures. Danish shrimp exports to the UK remained roughly stable and amounted to tonnes. Norway doubled its exports in 2008, but exports to the UK were much lower than in the years prior to During the first months of 2008, prices for Norwegian peeled Pandalus borealis on the UK market showed an upward trend. On average, prices in June 2008 increased by almost 20% compared to last year. Slow down of German imports The first quarter of 2008 put an end to the outstanding boom in German shrimp imports. Far from the 22% growth of 2007, shrimp imports during the first three months of 2008 increased by only 2% in volume and by 3% in value. Thailand continued to gain ground on the Germany market, with a 18% market share and it remained the number one supplier to this country. Viet Nam also expanded on the German market both for frozen and processed products. In the frozen category, Vietnam increased its exports by 58% on last year figures. India lost ground in Germany and registered a 22% decrease in its exports. Shrimp: Germany Thailand Viet Nam India Netherlands Bangladesh Belgium Denmark UK Others Total Source: GLOBEFISH AN GLOBEFISH Seafood Highlights 2/

8 SHRIMP Japan driving force in shrimp market Shrimp exporting countries - such as Thailand, Indonesia, Ecuador, India, etc. - which presently expand their presence on the European market in order to counterbalance adverse circumstances on the US market will soon encounter further difficulties also on the European market where consumption is slowing down significantly. Given the general economic situation, shrimp prices are unlikely to continue at such a low level. Some economists foresee that, should oil prices continue to increase, transport costs could jeopardize trade liberalization and could force key markets to import more products from neighbour countries. Regarding shrimp, the USA would turn mainly to South America, Japan would import from other Asian countries whereas Europe would have to change its consumption habits moving more towards coldwater shrimp products. Although today this scenario seems extreme, transport costs may in future strongly influence shrimp importing countries in the choice of their partners. In the short run, Japanese importers and domestic marketers will be active in securing supplies for the coming summer holidays. In view of limited raw material availability and increasing production costs, offer prices will be higher than last year. The effect of the price rise on the Japanese market will possibly be clear after the summer holiday. The international prices for shrimp appear to differ from the global trend of increasing food prices. This situation is unlikely to prevail much longer. The final change in shrimp prices will still depend on many factors including the rising costs in fishing, farming, processing and transportation etc. In the short run, however, there is very little room for shrimp price increases, given the present bleak demand in the EU and in the US market. SHRIMP VOLUME IMPORTED BY EU-25, USA AND JAPAN - JANUARY-MARCH Comparison to 2007, in % Tonnes MT MT MT MT MT JAPAN EU 25 (intra) JAPAN EU 25 (intra) JAPAN EU 25 (intra) JAPAN EU 25 (intra) JAPAN EU 25 (intra) +2% EU 25 (extra) EU 25 (extra) EU 25 (extra) EU 25 (extra) EU 25 (extra) 5% USA USA USA USA USA -2% GLOBEFISH Seafood Highlights 2/2008

9 TUNA Record skipjack prices Tuna for canning continued to be in short supply worldwide. The current import price in Bangkok is about US$2000/MT for frozen skipjack, the highest in history. Fishing efforts in the Indian Ocean have switched to skipjack with only small amounts of yellowfin being caught; catches of skipjack are not strong either. In the Eastern Tropical Pacific, landings of yellowfin are slightly better and skipjack catches are fair at best. Consequently a reduction in prices is unlikely, on the contrary further price hikes are expected. The impact of increasing raw material price on canned tuna is already visible with strong growth in prices everywhere. Tuna catch under stress The IATTC failed to agree on management measures for tuna fishing in the Eastern Tropical Pacific for calendar year 2008 and This failure created major concern both in the tuna industry and among non governmental organizations. There is some hope that Ecuador and possibly other countries will unilaterally adopt fishing restrictions to demonstrate cautious and responsible management behaviour. On the other hand, this lowered expectations of a steep price hike driven by a forced fishing ban. Instead, canneries in Latin America expect that fishing operations and therefore fish supply will not be interrupted dramatically in the second half of Tuna fishing boat operators organizations in Japan, China, Republic of Korea and Taiwan Province of China agreed, in late June 2008, to suspend operations for several months in the face of soaring fuel costs. The economic conditions made it difficult for tuna fishermen to make ends meet; this measure will have a positive effect on the declining tuna population in world's oceans. The suspension is expected to result in higher prices for bigeye and yellowfin tuna, which are mainly consumed as raw fish or processed into canned food. Japan s national tuna and bonito fishermen s group is in the process of preparing about 20% of its more than fishing vessels to suspend operations for a couple of months beginning in July These measures will have an enormous impact on the world tuna market, not only the sashimi market. Demand for high grade tuna lethargicin Japan The yearly decline in air-flown tuna imports into the Japanese market continued during the first quarter of this year. Although bigeye tuna imports increased marginally (2.3%) imports of other species declined with a significant supply shortfall of bluefin from Mexico (- 55.6%) and Spain (- 32.5%). Combined exports of fresh yellowfin and bigeye from Viet Nam were down by 61% compared to last year; exports also declined from Thailand, Sri Lanka, Maldives and India associated with lower catches in the Indian Ocean. Total imports of fresh and frozen tuna and tuna loins during this period were tonnes at US$ million against tonnes (US$ million) during January - March 2007 implying rising tuna prices worldwide. Frozen tuna imports into Japan also declined slightly in the opening months of Bigeye tuna continued to be Frozen tuna: Japan Yellowfin Bigeye Skipjack S. bluefin Albacore N. Bluefin Total Source: INFOFISH Fresh/chilled tuna: Japan Yellowfin Bigeye Bluefin S. bluefin Albacore Skipjack Total Source: National Statistics GLOBEFISH Seafood Highlights 2/

10 TUNA Coldstorage holdings Tuna: Japan tonnes Tuna loins: USA Other Skipjack Albacore Fiji Trin & Tob Thailand Ecuador Others _ Total Source: NFMS: GLOBEFISH AN Bigeye 20 Yellowfin selling tuna brand in the US, with about a 35% market share. 0 8 Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Source: INFOFISH Trade News, GLOBEFISH AN the main frozen tuna species imported into the Japanese market, accounting for about 42% of total imports. The importance of frozen yellowfin is declining year after year, showing the limited interest of tuna producers in selling to the Japanese market. As a result of overall low yellowfin arrivals, both from the domestic fleet and from imports, coldstorage holdings of this species are decreasing every month. US market remains bleak The US tuna market is under shock as the last major brand was sold to a foreign company. Del Monte Foods Co agreed to sell its seafood business, including StarKist, to the Republic of Korea s Dongwon Enterprise for US$ 363 million, confirming an earlier press report. StarKist is the top Canned tuna (excl. pouches): USA Thailand Philippines Indonesia Ecuador Others Total Source: NFMS: GLOBEFISH AN of canned tuna into the US market were stable at tonnes, in the first quarter of 2008, when compared with the same period of last year. Thailand reduced somewhat its sales to the US market, while the Philippines managed to capture a higher share of the US market. The market growth for fresh/chilled non-canned tuna namely tuna steaks, loins etc., in the USA has come to an Tuna pouches: USA Thailand Ecuador Others Total Source: NFMS: GLOBEFISH AN Fresh Tuna : USA Albacore Yellowfin Bigeye Bluefin Skipjack Others Total Source: ITN GLOBEFISH Seafood Highlights 2/2008

11 TUNA halt this year. With shrinking consumer disposable income, the market can barely support the global rise in tuna prices. The retail price for fresh tuna steaks ranges between US$ 15-20/lb in the US supermarkets. The quarterly imports of air-flown tuna fell below 6000 tonnes for the first time in many years. However, imports of frozen tuna, tuna loins/ fillets, steaks, saku blocks etc. increased to tonnes compared to last year s figure of tonnes. These product forms include frozen natural and carbon monoxide (CO) treated products. There is a growing preference for CO treated products in the US market because of the colour retention compared to the natural brown tuna. Exports Canned tuna: Thailand USA Egypt Australia Libya Canada Japan Saudi Arabia UK South Africa Germany Poland Others _ Total Source: GLOBEFISH AN C&F prices Frozen skipjack: Thailand and Africa US$/MT Thailand With declining demand for canned tuna, the US albacore trollers are shifting their target markets from domestic canneries to Europe. In 2006, around 39% of their total albacore catch ( tonnes) was sold to US canneries and only 25% exported to the EU canneries. Last year, sales to the EU increased sharply reaching 50% of the total landings at around tonnes. Only 13% was sold to the domestic canneries, while the rest was sold as fresh/chilled products. Thailand and China going strong Exports of canned tuna from China increased dramatically during the last two years amounting to tonnes worth US$67.6 million in 2007, up 51% in quantity and 64% in value over the previous year. Thailand, the USA, Mexico, Japan, Spain and Israel were the main export destinations. of canned tuna into China also increased in 2007 to tonnes, up 36% over 2006 as a result of the growing domestic market. Thailand and the Philippines were the main suppliers of canned tuna to China. Thailand is the world largest producer of canned tuna. Seafood is the main source of animal protein food for its 63 million inhabitants. In addition, seafood is one of the main industries that generate income for Thailand. Beyond any doubt, canned tuna has been the leading export product with a production of 49 million cartons of 48 x185g canned tuna in 2007, the equivalent of 24% of total canned tuna production worldwide. Despite the expensive raw material, Thai canned exports continue to grow. They reached tonnes in the first quarter of 2008, a new record, and 12% above the corresponding 2007 level. Exports to all major markets increased, Egypt and Australia reported a 30% growth. C&F prices Yellowfin: Italy euro/tonne Indian/Atlantic Ocean Africa Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul lbs; Source: GLOBEFISH AN Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Source: GLOBEFISH AN GLOBEFISH Seafood Highlights 2/

12 TUNA Canned tuna: France Côte d Ivoire Spain Madagascar Seychelles Italy Senegal Others Total Source: GLOBEFISH AN Countries in the Arab world were the most interesting markets for Thai canned tuna exports, and this part of the world nowadays accounting for over 20% of total Thai exports. The main importers among Arab countries are Egypt, Libya and Saudi Arabia, with imports exceeding tonnes per year. EU Commission reacts on bluefin tuna The EU Fisheries Commission confirmed its decision to ban Atlantic bluefin fishing by its six members; reportedly France, Greece, Italy, Cyprus, Malta and Spain exhausted their bluefin fishing quotas allocated for the 2008 fishing season. The ban that came into force on 16 June C&F prices Loins: Italy euro/tonne Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Source: GLOBEFISH AN Skipjack Yellowfin Canned tuna: Germany Philippines Ecuador Thailand Papua NG Indonesia Seychelles France Others Total Source: GLOBEFISH 2008, will not allow any large scale bluefin fishing in However, small inshore vessels are exempted from this ruling. Yellowfin prices experienced a temporary reduction in March 2008, when strong catches were reported in the Eastern Pacific. However, in July 2008, yellowfin prices recovered to euro 1850/tonne, which is still somewhat below the level reached during Further price hikes are expected, once the canneries in Europe reopen after the summer break. All major EU canned tuna markets decline The UK is the main importer of canned tuna in the EU. About tonnes are imported by the country each year. Mauritius and Seychelles are the main suppliers to this market. The opening months of the year saw a decline in canned tuna imports, down by 15%. This decrease reflected Canned tuna: UK Mauritius Seychelles Thailand Philippines Maldives Indonesia Others Total Source: GLOBEFISH AN GLOBEFISH Seafood Highlights 2/2008

13 TUNA the disappointing tuna catch in the Indian Ocean, the main supplying area to the UK market. High prices also scare away UK buyers. There is hardly any hope for higher imports in coming months. The French market too experienced substantial declines in impors in the first months of The sharpest set/backs, however, were reported by the German market, where 35% less canned tuna was imported in the first quarter of the year. Again the high price led to diversification of German buyers, who are looking for cheaper substitutes, such as canned mackerel. Italian canned tuna imports continue to increase, as the market is more and more supplied by Spanish products. In the first three months of 2008, some tonnes more canned tuna were imported into Italy than in the corresponding period It is interesting to note the presence of Colombian canned tuna in the market. of this product increased by 43%. Further price hikes likely The overall pictures for tuna production and trade is difficult. Resources are under pressure, fuel and other production costs are sky-high, creating an atmosphere for further price increases. Both yellowfin and skipjack prices are likely to go up further, with no end to soaring raw material prices in sight. On the other hand, all major canned tuna importing countries report lower imports, mainly due to reluctance of traders to buy at the present high price. This consumer resistance will lead to some interest in producing more value added tuna products, adding some cheaper ingredients. Tuna loins: Spain Ecuador El Salvador Guatemala Portugal Colombia Thailand Costa Rica Venezuela Others Total Source: GLOBEFISH Canned tuna: Italy Jan-March Spain Colombia Cote d Ivoire Seychelles France Portugal Others Total C&F prices Canned tuna*: USA, Europe Source: GLOBEFISH US$/carton Europe Tuna loins: Italy USA Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan *48x6.5oz Europe, 48x6 oz USA, chunk, origin Thailand Source: GLOBEFISH AN 11101, Ecuador Colombia Kenya Thailand Spain Others Total Source: GLOBEFISH AN GLOBEFISH Seafood Highlights 2/

14 GROUNDFISH Groundfish prices go up The upward trend in Alaska pollack prices is impacting the world groundfish market. Decreasing catch quotas led to a 16% increase on prices during the first half of the year. Some producers are reporting a three fold increase in surimi raw material prices based on Alaska pollack and are looking for alternative species. Further price increases are likely for the second half of the year. Price trends in other frozen groundfish fillet segments are mixed, but as usual will follow the trend set by the Alaska pollack in due course. Further price increases in the US market During the first half of 2008, groundfish prices on the US market rose further on the wake of the increase which started at the end of Cod fillet prices reached US$ 2.58/ lb in June 2008, a 3% drop compared to the second half of Surimi - In France, origin: Spain Euro/kg Stick 250 gr/pc 2.15 There is an evident upward trend in the Alaska pollack price which increased from US$ 1.33/lb in December 2007 to US$ 1.63/lb in June 2008 due to the strong demand for Alaska pollock both in the fillet and surimi segments along with a lower US catch quota. The strong increase in surimi prices in just a few months, were a result of low Alaska Pollack landings. The market remains difficult and some buyers have difficulties ensuring their cover. All surimi producers are looking for alternative species (sardines and whiting) which could bring surimi prices down again. However, alternative species generally result in a lower quality surimi product, and only groundfish species are considered to be good providers for surimi raw material C&F prices Groundfish blocks: USA US$/lb Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Source: GLOBEFISH AN , 10806, Alaska pollack Cod Hake 1.0 Jan-03 Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 The 10% decline in US groundfish fillets imports in the first quarter of 2008 ( tonnes) was brought about by a decline in imports from the top two suppliers, China (-7% to tonnes) and Iceland (-37.7% to tonnes) compared to the same period of The Icelandic decline Cod-like groundfish: USA Fillets China Iceland Canada Norway Others Total Blocks/Slabs China Argentina Iceland Norway Russian Fed Canada Korea Rep Others Total Gr. Total Source: NMFS Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 GLOBEFISH Seafood Highlights 2/2008

15 GROUNDFISH Frozen Alaska pollock fillets: Germany China USA Russia Others _ Total Source: Statistisches Bundesamt was mainly caused by the sharply reduced cod catch quotas for An analogous drop in imports was registered by groundfish blocks (-9%) when the first three months of this year are compared to the corresponding period of China, the main supplier of groundfish blocks to the USA, reduced its shipments to this market by 11% compared to last year and whereas other countries have kept their export levels stable. Alaska pollack In Germany, origin: Russian Federation/USA US$/kg Frozen - fillets, skinless, boneless US$ 4.20 Frozen cod: UK China USA Germany Russian Fed Others _ Total Source: National Trade Statistics Russia Denmark China Iceland Norway Faroe Is Germany Poland Others Total _ Source: Seafish/national trade statistics EU imports down for cod and hake European imports of Alaska Pollock fillets during the first quarter on 2008 have remained relatively stable on the German market ( tones in January-March 2008, the same as the corresponding period of 2007). This stability is in contrast with changes in the quantities imported by the main providers, China (+6% at ), USA (+16% at tonnes) and the Russian Federation (-33%). China has also contributed to the rise in imports of frozen Alaska Pollack fillets on the French market (+6% to during the first three months of 2008) which balanced volume declines in all other main exporters (USA and Germany 8% and Russian Federation 6%) Jan-03 Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 The decline in UK imports of frozen cod from tonnes in Jan-Mar 2007 to tonnes in 2008 was a result of reduced shipments by the top four exporters of frozen cod to the UK: China and Iceland, -23% and 35% Frozen Alaska pollock fillets: France Cod -In Germany, origin: Poland/Norway Euro/kg Jan-05 Apr-05 Jul-05 Oct-05 Jan-06 Apr-06 Jul-06 Fillet block, skinless, boneless Oct-06 Jan-07 Apr-07 Jul-07 Oct-07 Jan Apr-08 Jul-08 GLOBEFISH Seafood Highlights 2/

16 GROUNDFISH respectively during the first quarter of this year compared to Jan-Mar The German cod fillet market does not appear as dynamic as the UK one despite the important increase in volume in 2007 compared to 2006 as a consequence of increased Chinese supplies. Comparing the frozen cod fillet imports by Germany of first quarter of 2008 with the same months of 2007 no evident change can be noted since the rise in Chinese cod fillet exports to Germany (+27%) were counterbalanced by reduced shipments from Poland (- 60%). Frozen cod fillets: Germany China Russia Poland Denmark Norway Iceland Others _ Total _ Source: Statistisches Bundesamt Further price hikes likely Groundfish resources continue to be under stress in almost all fishing areas. Demand for whitefish products stays strong, which leads to higher offer prices in all markets. In addition to the traditional markets EU and USA new markets are emerging, mainly Brazil and Russia. Difficult supply situation for hake Difficult supply situation for hake In the first quarter of 2008 hake imports into Italy and Germany experienced a decline (-3% and -23% respectively) as a result of lower arrivals from Argentina compared to the January-March 2007 period. This country remains the top supplier to the Italian marked but has lost its leading position to the USA on the German market. Spanish frozen hake exports to Italy dropped by 24% during the same period. During the first four months of 2008, Chilean landings of hake (including hoki) amounted to tonnes, 1.2% down on the same period in Lower landings of common and southern hake were balanced by higher landings of hoki. The latter species accounted for 39% of landings in the period under review, and grew 12% compared to the figures of the previous years. The other two species showed a reduction in landings, -7% for common hake, and -11% for southern hake. The evolution of landings between January and April for the last three years can be observed in the following graph. Between January and March 2008, Spain and the USA remained the main buyers of Chilean hake in terms of value (US$ 18.3 million and US$ 1.8 million respectively), as well as in terms of volume (4 396 tonnes and 730 tonnes respectively). The Spanish share in total exports, was higher in the current period (55% and 76% respectively in terms of quantity and value). The third market in importance was Portugal (300 tonnes worth US$ 1.5 million, followed by Germany and France. Venezuela again is placed as one of the main markets for Chilean hake in terms of value with the highest unit value (although lower than the level for 2007 of US$ 8.1/kg). Between January and May 2008, landings of hake in Argentina were tonnes which represents a decline of 11%, compared to the same period in Hubbsi hake had a 69% share in total landings, followed by hoki with 30%. Landings were lower for all species with hoki showing the most significant drop at -19%. As a consequence of the deterioration of the state of the resource, the Agriculture, Livestock, Fishing and Food Secretary (SAGPyA) cut the total allowable catch (TAC) of hubbsi hake by 20% for 2008, from tonnes in 2007 to tonnes. That TAC was set also for the next five years. On the other hand, according to several reports of the National Institute of Fisheries Research and Development (INIDEP), the stocks are formed mainly by juveniles, which implies special measures to preserve them. The effects of the lower quotas and a raw material shortage are starting to show. Frozen hake fillets: Germany Argentina USA Peru Chile Russian Fed. * Others Total Source: Statistisches Bundesamt 14 GLOBEFISH Seafood Highlights 2/2008