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Getting fish into the pricing index

Thursday,6 September,2012 10:52:27

Have you ever wondered about what is included when you hear about the OECD Food Index?

Well surprise, surprise the OECD has never included fish/seafood in its index. That I find quite interesting as seafood is the most traded global food commodity by a long, long way. The United Nation’s Food and Agriculture Organization believe that fish should be a part of the index so they have been working for a few years to get all the correct statistics together in a fashion that enables the fish price index to be created.

My personal view is that to be taken seriously seafood needs to be involved in this index. Seafood is an extremely important part of a nutritious diet and is a very important industry, especially to developing nations, so I am personally very supportive of the actions by the United Nations Food and Agriculture Organization in this regard.

In order to start promoting this, FAO put on a workshop just prior to AQUA12 in Prague. The organizer of this was Audun Lem, Globefish leader through FIPM/FAO. This was the 4th workshop held by the group but the first that has taken place outside of Rome, the headquarters of FAO.

There were a number of interesting presentations and there were lots of discussions that added to the quality of the workshop.

Sigbjorn Tveteras presented on behalf of the group of experts who have been collating and organizing data. Initially they have been working on the trade figures relating to EU/Japan and U.S. between 1990 and April 2012.

If you are not an economics expert the process might seem a little hard to understand but clearly they have tried to simplify what is a complex issue. Seafood seems to be a much more difficult food product to get quick accurate data than many others. Maybe over the years to come this can be changed but certainly, for now, we are stuck with what we have.

In his presentation, Sigbjorn said that 78 percent of global seafood is exposed to international trade competition and that clearly the data is showing that global markets are becoming more tightly integrated.

Stephania Vannuccini, FAO statistician, gave some insights into assumptions that have been made in order to produce information for OECD-FAO Agricultural Outlook 2012-2021. Some of these most people would easily accept but as with all such work it is always open to comment, criticism and improvement. As we all know, predicting into the future can be fraught with all sorts issues and hindsight is always easy.

In amongst the global presumptions, aquaculture is mentioned to increase by 33 percent and seafood consumption is to increase from 18.5 kilograms per head of population to 19.6 kilograms in the next decade.

One thing I particularly noted was the comment that expected rising prices in the market will risk the effect of substitution of certain species.

This is something that the industry and governments have the ability to work on to ensure the integrity of the industry is maintained because it is already a problem in many countries.

In the next presentation we learned from Victoria Chomo, who is working with FAO on "Certification and Labeling and their potential impacts on Trade," that there is still much confusion and no reliable independent data on environmental effectiveness and value or effectiveness of eco-labels.

From the discussion that ensued we learnt of a report that will soon be published concerning the traffic-light system used in California. This paper will be important for all of industry to see as, according to the information supplied, it highlights that customers are loathe to change their habits. Customers were apparently not avoiding "red" and increasing "green" and the major finding was that sales were falling on all seafood.

Governments around the world made massive errors in communicating a simple message to pregnant women. Creating a warning about avoiding certain species or limiting consumption on other species saw total seafood sales dropping. Lessons should have been learned. It seems that the traffic-light process is putting a question in the mind of the consumer. This makes the purchase of seafood a decision-making process and in the fast pace that we live this makes life too difficult so the consumers choose to eat other competing products avoiding seafood. They find it confronting and confusing to buy seafood because of all the logos, competing information, and concerns created.
FAO made it clear it is not their role to assess whether particular seafood or countries are meeting their guidelines, as they are not an organization that does this sort of work, but they welcome others to do this.

They were seemingly encouraged by Iceland creating a third-party certification process based on the FAO code. Of course this process has now expanded to Alaska and with many others looking to engage. It seemed to those I spoke with from the audience that this was an acceptable innovation that is beneficial and sustainable.

Junning Cai, FAO Aquaculture Officer, explained about the user friendly tool that has been created which enables trade data to be interrogated. This is too complex to explain in a blog but we have been promised more detailed information so as and when I get that I will post it.

Finally we heard all about the issues on fishmeal and fish oil. The word about the future supply of both items is "caution."

Fish oil is becoming more and more an important item for human consumption (capsules) and that will clearly put pressure on the demand relating to aquaculture (and for that matter other animal) feeds. Added to that is that there are issues with the main suppliers of fishmeal (Peru and Chile) in that tonnages are unlikely to increase despite the demand.

It was highlighted that China creates approximately 50 percent of their own fishmeal by utilization of residual product. This was discussed as one of the ways forward ensuring that byproducts were not wasted.

The workshop concluded with Audun Lem giving an update on recent fisheries events in the WTO. It was noted that now that Russia has joined the WTO that all the major countries are now engaged.

The U.S. has been brought to task about two major issues — one by Mexico (tuna) and one by Vietnam (shrimp). The other main issue at

WTO is the subject of fishing subsidies and that is a complex issue that must be resolved as there is clear evidence that such policies have an effect on the sustainability of the industry.

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