Pangasius prices in the U.S. have nearly doubled over the past year-and-a-half and that increase has done little to deter demand for the fish, according to an expert panel at the Global Seafood Market Conference, currently taking place from 15 to 17 January in Coronado, California, U.S.A.
Pangasius production globally has continued to increase, with estimates putting the production in 2019 at around 3 million metric tons (MT). The lion’s share of that is produced in Vietnam, with estimates putting that country’s production at 1.31 million MT in 2019.
While increases in production have been observed, prices for boneless/skinless frozen tilapia fillets have risen from an average of USD 1.70 (EUR 1.49) per pound to USD 3.20 (EUR 2.80) per pound and held steady for the past several months. Despite that rapid increase in price, according to Michael Holley, the commodity procurement manager for US Foods, the demand from restauranteurs has hardly slowed.
“It’s just amazing how the demand has not gone away,” Holley said during the GSMC value finfish panel.
Data shows that broadline sales have decreased somewhat in certain market areas, such as amongst medium and large commercial chains. However, an increase in demand from micro chains (chain restaurants with three to 19 units), coupled with relatively flat demand from independent restaurants, has meant that demand has hardly slowed at all despite the near-doubling in price.
That continued demand comes alongside the continued drop in price, and demand for, tilapia. Across the board, demand for tilapia has been on a steady downward trend since 2014, and that demand shows no signs of slowing.
Even with China’s global harvest increasing through October 2018, U.S. demand for the fish remains on a downward trend, according to data from the National Fisheries Institute. Broadline sales, as well, have fallen across the board. The largest percentage drop is in medium chains (restaurants with 100 to 249 units) where sales have dropped by 46 percent.
Once thought to be an equivalent whitefish to pangasius - in a similar vein to the interchangeability of haddock and cod in some markets – tilapia’s more appealing price point hasn’t swayed customers at all.
Even with prices sitting at just over USD 2.10 (EUR 1.84) for seven- to nine-ounce frozen fillets, restaurants are still asking for pangasius that costs significantly more, said Holley, particularly in Texas and Oklahoma.
“Those markets were adamant that they had to have the fish,” Holley said. “They’re going to pay more money ... to have tilapia.”
The high values have made farming pangasius an attractive prospect in Vietnam. Recently, the government announced that pangasius is one of the three species on which the country will focus its farming capacity.
While demand for pangasius in broadline markets isn’t slowing, imports in the U.S. have decreased. According to Sang Phan, president of Coast Seafood, China’s demand for the fish will likely increase on into the future, even as that country’s tilapia consumption also decreases.
Regardless of demand outside the U.S., the price trend shows no signs of slowing.
“I don’t think the demand goes away, I think people have accepted the fish, I think it’s still inexpensive enough that the American public or restauranteur can still make a lot of money,” Holley said. “The demand is going to stay there.”
