The cost of raw materials for both fish processing and aquaculture production have soared across Europe this past year.
While prices were already high thanks to the effects and supply chain uncertainties created by the Covid-19 pandemic, Russia’s invasion of Ukraine in February 2022 and the resulting international sanctions exacerbated the situation and sparked even more-dramatic increases for these essential inputs. Of almost equal importance to the seafood economy and its markets – energy prices have also soared.
Outlining the industry’s present position in a recent webinar organized by the European Commission’s European Market Observatory for Fisheries and Aquaculture (EUMOFA), Mike Turenhout, a fisheries and trade expert with the Dutch Fish Federation (Visfederatie) and a member of the E.U. Fish Processors and Traders Association (AIPCE-CEP) said the region’s low self-sufficiency when it comes to seafood has made it especially vulnerable to the impacts of global price surges.
As the world’s leading market for fishery and aquaculture products, the E.U. is heavily dependent on imports from third-countries to meet market demand. In terms of raw materials, the EU-27 consumes 10.1 million metric tons (MT) of seafood after imports, exports, and non-human consumption trades are accounted for, and a large proportion of what remains in the bloc goes to the processing sector ahead of consumption, Turenhout said.
“Only 35 percent of the seafood consumed in the E.U. is produced here,” Turenhout said.
Even prior to the Russia-Ukraine war, material prices have trended upwards, which Turenhout attributed to three central causes. First, there’s a “disbalance” between supply and demand, with quotas decreasing for some key species for the E.U. processing industry, such as U.S. pollock and Barents Sea cod and haddock.
“That’s created the situation where buyers are frightened of not having enough seafood and it has made the prices higher for raw materials,” he said.
At the same time, the U.S. dollar and Norwegian kroner used to purchase products from key third-countries have become more expensive, he said.
The third cause is increased logistics costs, according to Turenhout.
“During the Covid crisis, the cost of containerized freight increased, as did airfreight. Then, with the start of the Ukraine war, we saw oil prices increase and that has also had an impact,” he said.
To help the industry reduce these costs, Turenhout suggested a number of potential actions. Firstly, the E.U. could look to increase its domestic production both through the optimized utilization of all its quotas, with just 75 percent of its maximum sustainable yield (MSY) used up in 2021, and also through investment in ramping up the region’s aquaculture production.
Turenhout also advocates for more outward-focused E.U. trade policies, including forging new trade agreements with third-countries and beneficial autonomous tariff quotas, which would allow limited quantities of in-demand seafood species to be imported at a reduced rate.
Alongside optimizing logistics to reduce transport costs, Turenhout suggests better product utilization – boosting the value of the raw materials at the processing sector’s disposal while also reducing its waste. Furthermore, more should be done to retain and reward seafood workers throughout Europe, and to gain knowledge from other sectors and regions.
“There is a lot to learn from other industries when it comes to animal welfare but also for adding value and using all the parts of animal products. These are things that can inspire us and give us ideas to optimize our own industry and make it more sustainable where needed,” he said.
Turenhout said Europe needs to get better at using all processing byproducts and limiting what goes to landfill,
“There’s still much more to win,” he told SeafoodSource.
Photo courtesy of EUMOFA
