Euro frailty

Published on
May 30, 2010

While the falling value of the euro has caused headaches in international money markets and highlighted a lack of confidence in Europe's economic outlook, it has provided an environment conducive for many of the region's seafood producers to ramp up their exports.

After years of watching Europe's single currency appreciate against the U.S. dollar, exporters operating within the 16 countries that use the single currency could now be briefly excused for rubbing their hands together at the opportunities presented by the steady decline of the euro against the greenback.

Currently, this five-month slide shows no indication of abating, amid mounting financial concerns of member states such as Greece, Portugal and Spain.

At last month's European Seafood Exposition (ESE), it was encouraging to note the number of Mediterranean sea bass and sea bream producers introducing strategies designed to create point of difference as well as product diversification in order to hang on to and hopefully grow their shares of traditional markets.

But in light of the euro's frailty, many exporters, particularly in southern Europe, hope their increasingly affordable products can find larger audiences outside the bloc. Certainly their products have the necessary quality and attributes to win over new consumers. For example, producers such as Greece's Kefalonia Fisheries and Croatia's Riba Mljet have elected to follow organic production methods and are pleased with the results.

Kefalonia is currently producing 400 metric tons of Naturland-certified sea bass and sea bream. The company concedes it isn't a big producer by global standards — generating a total of 2,000 metric tons of bass and bream per year — and therefore felt compelled to create point of difference through organics.

Riba Mljet has both Naturland and BioSuisse organic approval for its bass and bream. It has also added meager, or "corvina" as it's often called in the Mediterranean) to its product mix. It is currently growing 150 metric tons of organic meagre and expects to produce 200 metric tons next year.

Due largely to the price of specialty feed, organic production costs an estimated 30 to 40 percent more than non-organic production, but due to the euro's decline in value such products have become more price-accessible.

Spain's Andromeda Group also heavily promoted meagre as its new whitefish at ESE. Its largest sizes are 2 to 3 kilograms, and the company is producing around 1,000 metric tons of fish per year. The company said meagre prices are quite stable at around EUR 6.20 (USD 7.59) per kilogram, but again factoring in the deflated euro this price and the current wholesale price of EUR 5 (USD 6.12) for bass and bream make all three species appealing to larger buyer and consumer bases.

Having had a torrid time in recent years, compounded by a considerable drop in the number of producing companies, this could be just the tonic the industry needs.

But for every up there is a down, and while Mediterranean exporters have every reason to be optimistic, the biggest losers from the euro crisis are likely to be U.S. and Canadian seafood exporters now fronted with a rising dollar.

Contributing Editor reporting from London, UK

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