There are mounting concerns that the Mediterranean sea bass (Dicentrarchus labrax) and sea bream (Sparus aurata) farming industries could soon implode amid reports of very cheap fish being put on the market.
A number of northern European wholesalers have confirmed that at the end of 2012 and the start of this year there have been unusually large volumes of both species, but mainly bass, appearing on many major markets. As a result, supply and demand has been thrown off-balance and prices have dropped below production costs.
Sources say fish are being sold for less than EUR 3 (USD 3.85) per kilogram (kg) despite production costs being between EUR 4 (USD 5.14) and EUR 4.50 (USD 5.78) per kg.
Initially, there were large volumes being exported out of Greece due to worries over a Norovirus outbreak. In order to clean the farms, a lot of fish was put onto the market ahead of traditional harvests. But the situation has been exacerbated by the dire economic circumstances prevalent in many Mediterranean fish-farming countries — fish continue to be harvested early to provide producers with much-needed cash flow.
According to one London-based trader, there will be much more smaller bass on the European market this year and there have been complaints of fish weighing just 200 to 250 grams arriving in the U.K. market in recent months.
The frustration for the industry is that Mediterranean producers have been through these “boom and bust” cycles numerous times before.
The last big crash was in 2007 and since then the sector has tried to operate on much more sustainable footing by putting fewer juveniles in the water. However, it’s widely acknowledged that several producers are again farming too much fish, which means they are back chasing short-term gains.
It should be noted that this time around, the situation has been made more complicated because most independent farms don’t have access to credit like they did five years ago. In order to bring money in, they are selling fish at “stupidly cheap” prices, which “sets a precedent” and causes a downward spiral, said the trader.
The only people who are likely to benefit from this are the retailers, he added.
Another concern is that fish welfare has started to suffer. Because many farmers are struggling to find the resources to buy good-quality feeds, they are either starving the fish or buying cheap, inferior feed products.
But what level of output are we talking about this year? Fry production, which takes place in seasons between September and the following May, is the engine for grow-out with typical harvest weights of 330 to 350 grams per unit.
Historically, total fry production has risen over the past decade to more than 1 billion juvenile fish — assuming 3.5 fish are needed for 1 kg of biomass, 1 billion juveniles will yield a biomass in excess of 300,000 metric tons (MT).
In the 2007/2008 season, fry production reached 1.1 billion, which resulted in too many adult fish being harvested. This oversupply, particularly of bream, saw prices crash. The next season, fry production decreased by approximately 30 percent and prices eventually began to recover. However, the scars were there: There was a lot of consolidation in the industry, some hatcheries closed and many farms were either bought up or went out of business.
The big worry is that for the last three seasons fry production has been at around the 1.1 billion mark — again too much for current market demand.
It should also be noted the problems in the 2007/2008 season were largely blamed on an overproduction of bream (555 million); the current season is expected to see around 450 million bream produced. But bass production in 2007/2008 was 475 million and this season around 600 million bass is expected, which means the split has changed from 60:40 bream/bass to 40:60 bream/bass. This, say sources, also points toward a price crash in the bass market and the unwanted possibility of a few dark years ahead while the sector addresses its problems once again.
