FAO fish price index decreasing based on fall in salmon, shrimp prices

News 13:32 12/09/2012 KT
(seafood.com) While the FAO overall food price index rose 6% in July 2012, largely due to increases in grain prices due to weakening outlooks. This index does not include seafood.

The FAO fish index, calculated separately, is moving in the opposite direction.  After reaching its highest level in August 2011, the index has steadily fallen. The decline is the largest for salmon and shrimp whereas both tuna and the small pelagic category are higher today than last year. The explanation lies partly in the fact that capture fisheries are able to respond more quickly to demand changes whereas aquaculture, like agriculture, is bound by production decisions taken the previous season.

Because of this surge in aquaculture volumes, the FAO expects seafood export volumes to increase again in 2012, despite a fall in demand in some key markets.

According to the FAO, countries such as the US and Canada, China, Japan, Thailand, Australia and Brazil all saw the value of imports grow during the first six months of the year. Other markets, including Spain, France, Germany and Russia, registered a decline in imports as domestic consumer spending weakened.

Production has held up to some extent. Supply from many wild stocks is growing again as a result of more effective fisheries management and enforcement. This includes some pelagic catches in the Northern hemisphere and several groundfish stocks. At the same time, small pelagic catches in South America are drastically down because of lower quotas this year. There is also some indication that another El Niño may arrive at the end of 2012, or early 2013, resulting in a strong decline in small pelagic catches

The FAO sees problems continuing for aquaculture producers, as higher feed costs will occur at the same time that prices continue to fall.   Their outlook for the year is uncertain.

‘Domestic demand in many markets is still strong, boosting local aquaculture production. International markets will weaken over the next quarter with a higher impact. Rising prices on a number of other protein sources including grain will cause food prices in general to increase. Feed prices generally are also expected to end higher. This will create additional problems for many producers in the aquaculture sector, leading to restructuring in a number of countries with larger and more integrated companies as a result.’

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