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Market Report Mediterranean sea bass defies the odds Sector remains buoyant despite Eurozone crisis D espite a tough eco- nomic backdrop, which will continue to threaten most busi- ness sectors in southern Europe into next year, Mediterranean sea- bass (Dicentrarchus labrax) farming con- tinues to flourish. Te secret of pro- ducers' success is they haven't chased short- term rewards by grow- ing out too many fish. It seems lessons were learned from the market price crashes of the early 1990s and 2008, when sea bass far too much raw mate- rial was made available to the market and the sector nearly collapsed. Te industry-wide policy of scaling back production, introduced in 2009/2010, kept de- mand and supply nicely balanced in 2011 and this has ensured the market price of bass has remained high this Red tide raises bream prices Issues with Korean flounder boost demand P rices of red sea bream, or "madai" sea bream are up in Japan. At To- kyo's Tsukiji wholesale market, 1- to 2-kilo- gram (kg) fish sold at JPY 1,000 to 1,100 per kg, about 10 percent higher than last year's average, and 30 percent higher than at this time last year. Supermarket prices have so far risen 10 percent year-on-year to about JPY 1,400 ($17.75) per fish. Seasonal and substitution demand, decreasing production and a red tide are to blame. Demand for sea bream is strongest in the spring and New Year celebrations, but stays low in the summer and fall. Tis year, the rising price trend began to stand out as spring demand kicked in and has continued. Since last fall, when a food poisoning case in Japan was blamed on Korean flounder, some Japa- nese and Korean consumers turned to Japanese sea bream as an alternative. Tis substitution effect boosted demand. Additionally, because prices for the fish have been low for the past few years, some farmers had curtailed production, so supplies grew tight when the spring demand strengthened. Ten in July, a red tide damaged aquaculture (Continued on page 13) 16 SeaFood Business September 2012 year, albeit with sea- sonal fluctuations. Tra- ditionally, there's ample supply during autumn months, often in com- petition with wild local fish for the same fresh markets. From Decem- ber onwards, the mar- ket tightens as a result of strong demand and diminishing supplies. Bass prices at Merca- madrid wholesale mar- ket in August stayed strong with fish of up to 600 grams achiev- ing €6.30 ($7.82) per kilogram; 600 grams to 1 kilogram at €7.65 ($9.50); and 1 kilogram- plus at €8.70 ($10.81). All these prices were Turkey closing gap with Greece Estimated Mediterranean sea bass and sea bream production in 2011, in metric tons 20,000 40,000 60,000 80,000 100,000 120,000 0 Sources: FAO, company financials, other sources up slightly from those achieved last August. Greece's aquaculture accounts industry a the world's total bass production. it for large proportion of Together with gilthead sea bream (Sparus aurata) farm- ing, contributes around €400 million ($497 million) to the country's economy. Greek production of the two species stood at around 118,000 metric tons (MT) last year. Te majority of bass consumers are in Medi- terranean countries, but sales have been steadily growing in north Eu- ropean markets as well as in Russia, the United States and the Middle East. Tese emerging Chilean salmon continues to rebound SalmonChile targets Brazil exports to diversify markets T continues from the he Chilean farmed salmon industry to rebound infectious salmon anemia (ISA) virus crisis that affected it from 2007 to 2010. Te trade association SalmonChile antici- pates farmed salmon exports this year will surpass those of 2011, which totaled 385,325 metric tons (MT). Last year's exports were 30 percent higher salmon than 2010's and represented 64 percent of the to- tal amount harvested (439,456 MT). Te majority of Chil- salmon ean exports are sold frozen (74.38 percent), while 24.54 percent of exports are fresh. Te largest mar- ket for Chilean salmon was Japan, with 45 percent of exports, fol- lowed by the United States in a distant sec- ond at 18 percent and Brazil at 12 percent. SalmonChile is explic- itly targeting exports to Brazil to diversify its markets and shield itself from the risks en- tailed with depending on any single market. Fresh fillet prices have dropped from $5.10 per pound in 2010, to $4.90 per pound in 2011 and $3.70 per pound in July. However, producers believe decreased prices should be resolved in the short term. Margins are expected to be con- solidated and no major variations are expected. No new outbreaks of ISA have been reported since December 2010 and the industry ex- pects to return to 2006 levels of production this year or next. Te indus- try also highlights that while improved site sanitary management has increased costs, this has been more than off- set by lower mortality, better growth and im- proved parasite control and medication use. — Brewington & Co. Visit us online at www.seafoodbusiness.com Greece Turkey Spain Italy France Portugal