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Global Pelagics Supply Outlook Improving

03 March 2017

GLOBAL - With recent research indicating that North Atlantic mackerel and herring stocks are improving, the outlook for 2017 appears to be strong. In contrast, for South American anchovy, lower catches are expected for the remainder of 2016 although forecasts are somewhat mixed, according to FAO GLOBEFISH.

Mackerel

The international summer survey for mackerel in the North Atlantic gave some very encouraging results this year. The so-called stock index was the highest since this research was initiated in 2007, and was set at 10.2 million tonnes, which is 2.5 million tonnes higher than last year. The main reason for the high stock levels appears to be the very strong 2014 class, which now is beginning to show itself in the research results. According to the head of the research team at the Norwegian Institute of Marine Research, the advice given by researchers to set the quotas low has not been very accurate in previous years. The findings of this year's research may result in higher quotas in 2017.

Also in Norway, research vessels have registered a significant amount of large and fat mackerel during their surveys this summer. The average size of the mackerel caught in the area southeast of Jan Mayen Island had increased from 380 g to 530 g. In Iceland, vessels also report good mackerel fishing along with large sizes. The average size of mackerel caught in the Icelandic waters was somewhat lower (388 g) than that around Jan Mayen.

There are concerns about the stocks of chub mackerel in the northern Pacific Ocean. In an effort to improve recruitment and stabilize the stocks, the six members of the North Pacific Fisheries Commission (Japan, Canada, China, Russian Federation, Republic of Korea and Taiwan Province of China) recently agreed to curb chub mackerel catches in the region. Particularly Chinese fishing efforts have been increasing in later years, as the number of Chinese vessels going for chub mackerel increased from 20 to 80 in a short time. According to the The Japan Times, Chinese landings of chub mackerel increased from 24 000 tonnes in 2014 to 134 000 tonnes in 2015.

Herring

As with mackerel, researchers are optimistic about the North Sea herring stocks. According to representatives of the Institute of Marine Research in Bergen, this year's surveys show that the 2013 class of NVG (Norwegian spring-spawning) herring is in good shape, and researchers are excited about following this class in the years to come. However, so far, researchers are reluctant to suggest quota advice.

In the USA, herring is scarcer, and this is worrying the lobster industry, which needs the herring for bait. Fishers on the Northeast coast are complaining that the summer quota will be caught too quickly, and leave little or no herring for the lobster industry.

Anchovy and sardines

According to the Instituto del Mar del Peru (IMARPE), Peru's anchovy biomass is in good shape, and things therefore look positive for the next fishing season. During the last survey performed by IMARPE, 7.3 million tonnes of fish was registered, with this and other indicators demonstrating a healthy stock.

El Niño has significantly disrupted the anchovy season in Peru, and landings are well below normal. According to estimates, landings this year will drop 20 percent to about 2 million tonnes. The total amount processed as of the end of August amounted to only 72 000 tonnes, compared with 293 000 tonnes at the same time last year. Low landings are due to the fact that Peru decided to close its first anchovy season on 27 July – even though only less than half the quota had been landed – as the stocks had entered into their reproductive stage. Chile decided to close its season on 14 July for the same reason. However, Chile had by then landed about 70 percent of the quota. The fishery could remain closed through October and November.

Operators in Peru are optimistic about the second season in the centre north fishing area. However, this second season in the northern and central area of Peru may be delayed, with the final decision dependent on the recommendations of IMARPE. Preliminary studies indicate that sea temperatures are cooling at a slower pace than usual and there is a delay in spawning.

El Niño has prompted Peruvian authorities to allow industrial anchovy fishing to move closer to shore this year. While previously the vessels could not operate closer than ten nautical miles from shore, they are now allowed to operate as close as five nautical miles from shore. According to the Ministry of Production, El Niño forces shoals of anchovy to swim closer to shore. The area inside of the five-mile limit is reserved for small-scale fishers.

Market and demand

At the Nordea/Norwegian Seafood Council market seminar during Nor-Fishing in August, representatives of the pelagic industry in Norway called for more consumer orientation in the pelagic sector. The industry needs to develop new and consumer-attractive products as most of the Norwegian mackerel and herring production is exported as round frozen, thus adding no or very little value to the raw material. According to some analysts, an increase in fillet production would help the mackerel industry grow.

Overall demand for mackerel appears strong with prices higher than a year ago. The Nigerian market particularly seems to be on the move again, as Nigerian authorities have relaxed its embargo on import quotas allowing the Nigerian niara to float against the US dollar.

The Russian Federation market is mainly supplied by the Faroe Islands and Greenland, as these countries are not subject to the Russian Federation import ban.

Trade

Major pelagic exporters (Norway, the Netherlands and China) registered increases in their exported volumes during the first half of 2016. Norway saw a significant increase (+35.7 percent by volume), and China also had a large increase (+28.4 percent by volume), while the Netherlands registered just a marginal increase (+3.7 per cent).

Despite these increases, the largest market for Norwegian mackerel – Nigeria – imported less during this period even though authorities have relaxed import regulations somewhat. Demand on the Nigerian market will likely remain strong in the long-term.

Russian Federation imports of whole frozen mackerel increased during the first half of 2016 by some 46.5 percent, to 29 600 tonnes. Imports from western countries such as Norway, the UK and the EU are still banned, and therefore the Faroe Islands accounted for no less than 83 percent of the total, with China, Greenland and Morocco accounting for the rest.

German imports of small pelagics increased during the first half of the year with frozen mackerel imports growing by 47 percent to 7 500 tonnes. The largest suppliers were the Faroe Islands and the Netherlands. German imports of frozen herring fillets went up from 5 500 tonnes to 6 900 tonnes (+25.5 percent), with the largest suppliers being Norway, Denmark and the Netherlands.

In contrast, Japanese imports of fresh and frozen herring went down in 2016. During the first half of the year, imports dropped from 19 300 tonnes to 18 000 tonnes (-6.7 percent). The main suppliers were the USA, the Russian Federation and Canada.

Russian Federation imports of whole frozen herring declined sharply during the first half of 2016 compared with the first half of 2015. Imports went down from 31 700 tonnes to just 10 700 tonnes (-66 percent). Almost all of the imports originated from the Faroe Islands.

US imports of canned sardines have over the past five years been relatively stable. After a slight decline in 2015, there was an increase in imports during the first half of 2016, when imports went from 14 300 tonnes in 2015 to 15 800 tonnes in 2016 (+10.5 percent). The major suppliers were Poland (accounting for 24 percent of the total), Morocco (18 percent of total), and China (13 percent of total).

Increasing demand for feed for the aquaculture industry is pushing prices of blue whiting up, according to Norges Sildesalgslag (Norwegian Herring Sales Organization). Average first-hand prices in 2016 are NKr2.80 per kg, compared with NKr1.91 in 2015 and 1.47 in 2014. Norwegian landings of blue whiting in 2015 amounted to 496 000 tonnes. By the end of August this year, landings had reached 327 000 tonnes (Source: FiskeribladetFiskaren).

Outlook

The outlook for North Atlantic mackerel and herring is positive for this season, with the potential for it to be even better next year. In the South American anchovy fishery, the situation is not so bright, as the industry expects a 20 percent drop in landings. In terms of pricing, mackerel prices are on the way up, especially for larger sizes. Whole frozen herring prices are also rising, while prices for frozen herring fillets are flat.

The report analyses the market situation over the period January-October 2016

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