The tilapia market is continuing to seesaw after the low supplies of 2008 were followed by a bounty in 2009. But when supplies are plentiful, prices fall and farmers respond cautiously when gearing up for the coming year.
China and South and Central America are the major tilapia producers. In 2009, China exported 322 million pounds to the U.S. market, with frozen fillets outnumbering whole frozen fish by nearly 2.5 to 1. In the fresh category, Ecuador led the way with 22.4 million pounds exported, followed by Honduras with 15.7 million pounds and Costa Rica at 12.8 million.
“Challenging” is how Don Kelley, manager of procurement for Western Edge Seafood in Claysville, Pa., labels the tilapia supply this year, pointing out the roots of those challenges go back to 2009. Rising production costs and low prices resulted in less farming in China. Add to that unfavorable weather and a typhoon while consumer demand stayed steady.
Prices for frozen tilapia from China have risen from the mid- to high-$1 mark last year to more than $2 per pound this year for 3- to 5-ounce fillets, according to Kelley. A decision this year by the Chinese to allow some further currency changes between the dollar and China's renminbi, or yuan, will likely send prices higher still, he says.
China, which experienced a freeze in 2008 that severely damaged fish in the ponds, rebounded completely in 2009, he says. In fact, some shrimp farmers, upset by what was happening in that market, switched to tilapia, which led to oversupply and lower prices when the fish came to market.
“The past two years have been a tough cycle” for tilapia, says Richard Stavis, president and CEO of Stavis Seafoods in Boston. Stavis sources his tilapia from Taipei, China, and has witnessed the same up-and-down availability cycle as prices rise and fall.
“In mid-2008, people were buying fish and the price went up,” he says. “Then it stopped, and people were stuck holding the bag.” He says that influenced some farmers to hold back.
“But as we get consumption back to regular levels, there’s not enough fish,” he says, which has resulted in shortages, higher prices, suppliers not honoring contracts and fears that quality may be compromised as farms look to meet demand.
To read the rest of the feature on tilapia, click here. Written by SeaFood Business Contributing Editor Joanne Friedrick, the story appeared in the November issue of SeaFood Business magazine.
To read SeafoodSource Editor Steven Hedlund’s interview with Norbert Sporns, CEO of tilapia producer HQ Sustainable Maritime Industries, click here. The story ran on 26 October.
