While global tilapia production increases, US imports fall
Tilapia production globally has steadily increased over the past decade – with 2018 production estimated at nearly 6.3 million metric tons (MT) – yet U.S. imports were forecast to likely be at their lowest level in several years.
The data, shared at the Value Finfish panel during the 2019 Global Seafood Market Conference in Coronado, California earlier this month, estimates that the U.S. imported around 300,000 MT of tilapia in 2018. That’s significantly lower than the 500,000 MT high in 2012.
“Through October, through 2014, things have been on a pretty steady decline,” Todd Clark of Endeavor Seafood said.
The declines are clear in U.S. broadline sales, with virtually every commercial category having a steady three-year decline in sales. Commercial medium chains, representing chains with between 100 and 249 units, fell the most with a 46 percent drop in sales. Non-commercial restaurants, which make up the largest share of tilapia purchasing at over 14 million pounds, dropped six percent.
“Each one of those categories has been on a steady decline,” Clark said.
Sales in virtually every region of the U.S. were down as well. Only the South Atlantic region saw any growth at just two percent. Even with that growth, demand was still lower in 2018 than it was three years ago.
Low demand and high supply has resulted in low prices, with seven- to nine-ounce frozen fillets sitting at just over USD 2.10 (EUR 1.83). That’s down from USD 2.90 (EUR 2.53) just four years ago. But even with prices of tilapia falling lower than many other similar fish, demand isn’t coming back in the U.S.
According to Heath England, COO of The Fishin’ Company, a lot of the decline has come from public perception of the product.
“We’ve commissioned a monthly survey that we’ve been running for 18 months specifically concerned to attitudes to everything that we sell,” England said. “The preliminary outcomes of that is that it’s not so much tilapia, it’s the country of origin.”
Specifically, the fact most tilapia is associated with China has helped to dampen sales in the current political climate.
While worldwide tilapia production has increased in countries like India, Thailand, and Indonesia, most of that fish is consumed in the region.
“The product is produced there, and it stays there, because there isn’t a lot of cold chain,” Clark said.
Political climate also plays in to what the future of the tilapia market in the U.S. could look like if escalating tariffs on Chinese goods hit 25 percent in March. Previously scheduled for 1 January, the tariffs have been temporarily delayed until March.
As a result, cold storage of tilapia in the U.S. is at an all-time high as companies anticipate not being able to source product as cheaply after the tariffs jump.
In addition, farmers in China could shift away from producing tilapia as one of the most lucrative export markets dries up.
“We’re getting a little bit of feedback in China that some of the farmers, because of the tariff issues, because of the historic low prices, some of the farmers are beginning to experiment with other species,” England said. “I think if the 25 percent tariff goes through, it will be a demise that will just kill sales.”
The question, England added, is what fish takes tilapia’s place if tariffs hit. With prices as they are now, the boost in tariffs on tilapia could put it on a similar price point as pollock, presenting opportunities for that sector, and others.
“We’ve seen a lot of seafood buying dollars transfer from tilapia to pink salmon,” England said.
Demand could also shift to Europe, as low prices and the challenging U.S. market make the region more appealing.
“There’s a lot of effort right now in European markets to increase the consumption of tilapia over there as a replacement for pangasius. They’re having some issues with pangasius in Europe, as I understand,” England said.
Image courtesy of National Fisheries Institute