Industry experts say the seabass and seabream sector is still doomed to another year of struggles, with oversupply and low prices spreading like wildfire in European markets.
Prices are expected to remain weak until the fall, mainly due to increasing supplies from of Turkish seabass and seabream, more so for the former than the latter, Paul Steinar Valle, who monitors the bass and bream markets for Kontali Analyse, told IntraFish.
Turkey’s output climbed rapidly compared to demand, despite growth in both emerging and new markets in northern Europe and Asia becoming market leaders especially when it comes to fillet products, Valle said.
“I hoped they had learned from earlier boom-and-bust cycles which the Mediterranean sea bass and sea bream sector has experienced, and the history will repeat itself unless things are done differently,” Valle said.
“We have given signs of moving into another bust cycle and were quite surprised by increasing and high stocking volumes also in 2018."
Demand for the two species is growing by at between 5 percent and 6 percent annually -- not enough to avoid oversupply -- pressuring producers to search for new markets for the fish. However, it takes time for marketing to take effect.
Demand in Northern European countries is accelerating at a speed surpassing Mediterranean neighbors, but other markets also have a growing appetite for the species, such as the Gulf region, Middle East, and the United States.
Lower volumes ahead?
This year, stocking is on a major downswing so a reduced harvest is expected from 2020, allowing for a better balance between the growing demand and supply.
Kontali Analyse is still updating production levels in Greece, Turkey and Spain for the past year including how much stocking will be going down in the coming year.
Significant seabass and seabream production has been initiated in Gulf countries and the Middle East. The region might become a potential competitor in the European market in the future, but it could equally be regarded as a door for European exports to the region.
“Middle East production is in its beginning and growing, but hasn’t entered into Europe massively yet and mainly supplying their own markets," he said. “Oman has interesting plans and with the volumes planned for, they will likely need to ventilate with volumes to other sea bass and sea bream markets, like Europe."
One development coming out of the current economic stress may be further consolidation in Turkey, following in the footsteps of the European producers, Valle noted.
