COFI:FT/VII/2000/2  |
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COFI:FT/VII/2000/2 |
Item 4 of the Provisional Agenda |
COMMITTEE ON FISHERIES |
SUB-COMMITTEE ON FISH TRADE |
Seventh Session |
Bremen, Germany, 22-25 March 2000 |
STATUS AND IMPORTANT RECENT EVENTS CONCERNING INTERNATIONAL TRADE IN FISHERY PRODUCTS |
FAO ACTIVITIES RELATED TO INTERNATIONAL FISH TRADE
1. The purpose of this document is to inform the Sub-Committee of major facts and developments regarding international trade in fish and fishery products which have occurred since its Sixth Session in June 1998. The document contains a brief review of world fish production, exports and imports. It also includes a summary of the current trade situation of major fishery commodities. The activities of FAO and other international organizations in the field of world fish trade are described providing an update of the report submitted to the Sixth Session of the Sub-Committee.
2. World fish production declined substantially from 122.3 million tonnes in 1997 to 116.6 million tonnes in 1998, mainly due to decreased catches of small pelagics fisheries in Chile and Peru, caused by the "El Niño". This decline affected mainly fishmeal production, while food fish production stayed the same. China is now the top producer with some 38 million tonnes in 1998. Japan was the second major fishing nation with catches of 5.9 million tonnes. The importance of aquaculture continues to expand, especially for freshwater species such as carp.
| 1993 | 1994 | 1995 | 1996 | 1997 | 1998 | ||
| World fish production Growth over previous year | million t % | 104.4 3.7 | 112.2 7.5 | 116.0 3.4 | 119.9 3.4 | 112.3 2.0 | 116.6 - 4.7 |
| Export of fishery products Growth over previous year | `000 million US$ % | 41.4 3.0 | 47.5 14.6 | 51.8 9.2 | 52.9 2.0 | 51.4 - 2.8 | 48.9 - 4.9 |
| Developed countries Growth over previous year | `000 million US$ % | 21.3 - 2.4 | 23.7 11.1 | 25.6 7.9 | 26.8 4.7 | 26.1 - 2.5 | 25.5 - 2.2 |
| Developing countries Growth over previous year | `000 million US$ % | 20.1 9.1 | 23.8 18.6 | 26.3 10.4 | 26.1 - 0.6 | 25.3 - 3.0 | 23.4 - 7.4 |
| Import of fishery products Growth over previous year | `000 million US$ % | 44.6 - 1.5 | 51.3 15.1 | 56.2 9.6 | 57.2 1.8 | 56.4 - 1.5 | 55.0 - 2.4 |
| Developed countries Growth over previous year | `000 million US$ % | 37.9 - 1.7 | 43.3 14.2 | 47.4 9.6 | 47.6 0 4 | 46.8 - 1.7 | 47.0 0.4 |
| Developing countries Growth over previous year | `000 million US$ % | 6.7 - 0.4 | 8.0 20.3 | 8.8 9.4 | 9.6 9.1 | 9.6 - 0.3 | 8.0 - 15.8 |
| Developing countries' surplus exports over imports Growth over previous year | `000 million US$ % | 13.4 14.5 | 15.7 17.7 | 17.5 10.9 | 16.5 - 5.5 | 15.7 - 4.6 | 15.4 - 2.3 |
| Developed countries' net imports Growth over previous year | `000 million US$ % | 16.6 - 0.7 | 19.6 18.1 | 21.9 11.6 | 20.8 - 4.7 | 20.7 - 0.8 | 21.4 3.6 |
3. Developed countries accounted for more than 80% of total imports of fishery products in 1998 in value terms. Japan was again the biggest importer of fishery products, accounting for some 30% of the global total, but Japanese imports of fish and fishery products have declined recently due to the economic recession. The European Union (EU) further increased its dependency on imports for its fish supply. The United States, besides being the world's third major exporting country, was the second biggest importer.
4. The increase in net receipts of foreign exchange by developing countries - deducting their imports from the total value of their exports - is impressive, rising from US$ 5 200 million in 1985 to US$ 15 000 million in 1998. For many developing nations, fish trade represents a significant source of foreign currency earnings.
5. Major issues of international trade in fishery products during in recent years were: the change in quality control measures in the main importing countries; the concept of risk assessment as a potential trade barrier; the concern of the general public on overexploitation of the resource; environmental concerns with regard to aquaculture; the end of the tuna-dolphin issue; the discussion on responsible fish trade.
6. The economic crisis in Japan and the low value of the yen led to lower demand for shrimp there. The main supplying countries had to reduce prices and to look for other outlets, in order to sell their production. Fortunately, the United States (US) market continued strong, and at the discounted price level, shrimp consumption in this country grew. Demand for shrimp in Europe is improving, in parallel with the overall economic situation.
7. Disease problems were experienced in Central America and Ecuador, and the 1999 cultured shrimp production will be far below the 1998 output. India and Indonesia also reported low production, while Thai cultured shrimp production seems to be growing after the problems experienced in 1996 and 1997.
8. The Japanese shrimp market is expected to improve, as the economy shows signs of recovery. On the other hand, the US market might slow down in the coming future. EU shrimp demand will stay strong. Prices are expected to pick up in the near future.
9. Tuna catches in 1999 were well ahead compared to 1998 in practically all major fishing areas and particularly catches in the Eastern Pacific continued the positive trend experienced in 1998. This may lead to further reduction of prices, which had started to decline in mid-1998. Demand for sashimi tuna has improved in Japan, though sales are still not back to normal. Canned tuna is also selling well in the two main markets (United States and European Union). For the first time in years, Japan imported less fresh tuna in 1999. The biggest declines were experienced in fresh bigeye imports, but yellowfin also lost ground. Indonesia is the main supplier of fresh tuna (mainly yellowfin) to the Japanese market.
10. Thailand continues to be the main exporter of canned tuna to the United States market and experienced higher sales in 1999. Better availability of raw material to Thai canneries and the economic interest of the main US brands in the Thai tuna industry were the main reasons for this recovery. The Philippines remained in second position. The use of tuna loins by Italian canners continues to expand. Loins as raw material now account for about 60 percent of total Italian canned tuna production. Ecuador and Colombia are benefiting from their special duty-free status as Andean pact countries and are increasing their shipments to the EU.
11. Yellowfin prices on the European market have been declining, as strong arrivals from the Eastern Pacific have been keeping the market well supplied. Mexico has developed into an important supplier of whole tuna to the Italian canneries. In November 1999, prices of whole yellowfin from Mexico reached a low of US$ 1 000 per tonne, compared to a high of US$ 1 800 per tonne in May 1998. Tuna loin prices are less subject to fluctuation, as producing companies have generally exclusive contracts with buyers or directly with owners of foreign companies. Nevertheless, in November 1999, tuna loins on the Italian market were quoted at US$ 3 000 per tonne, almost US$ 1 900 per tonne less than the May 1998 price.
12. The European and African markets appear dull. Canners are not selling as some distributors in Europe have built up large inventories since last year. Some traders have also accumulated canned product during the last quarter of 1998, when raw fish prices in Thailand declined.
13. Groundfish supply was very limited in the first half of 1999. In Namibia the hake quotas have been increased from 165 000 tonnes in 1998 to 195 000 tonnes in 1999, while those in South Africa are set at the same level as last year (151 000 tonnes). However, this increase will not fill the gap expected from South America, caused by the closure of hake fisheries in Argentina, Chile and Uruguay and their slow recovery in Peru. A further reduction in Alaska pollock catches is forecast for 1999 on the wave of the constant decline (with the exceptions of 1995 and 1996) experienced since the peak of 6.8 million tonnes in 1986.
14. Cephalopod fisheries were good in 1999, especially Illex catches, and supplies on the world market were very strong. Octopus catches in the Eastern Central Atlantic were good in the beginning of 1999, leading to higher exports directed to Japan, and lower prices on the world market. However this trend is expected to reverse.
15. It is anticipated that Illex prices will suffer substantial reductions in the medium term. The buying interest in Spain, where price levels have remained relatively high, is not expected to absorb the huge quantities of Illex caught in the South West Atlantic. Once the inventories build up in Spain, the Illex price will start to decline, which could lead to a strong downward spiral of squid prices on the world market. A similar situation has already occurred several times over the past years.
16. The 1999 fishmeal production is forecast at 5.7 million tonnes, which is a 20% increase from the 1998 low, but still some 800 000 tonnes short of the average annual production. Various fishing bans and problems with the jack mackerel resource in Chilean waters are the main reason for the rather disappointing catch. The forecast for the year 2000 is better. Fishmeal prices are expected to increase due to higher prices of the main competing product, soybean meal.
17. The overall climate on the oil market was very quiet in 1999, with some improvements reported in price levels. Latin American producers reported a strong increase in output, and fish oil production levels went back to pre-El Niño levels. There is little availability of fish oil on the market at present, and production is not expected to increase before the end of the year. Competing vegetable oils seems to be in shorter supply than initially forecast, and their prices are expected to move up. As a result, a further increase in fish oil prices is likely.
18. The use of fish in food aid continues to decline. In 1998, some 14 400 tonnes were donated which compares to 21 300 tonnes in 1989. Canned fish is the main product, while edible fat reported a dramatic decline in recent years. Norway continues to be the main supplier of fish for food aid, and reported a sharp decline in 1998. Developing countries are practically not tapped as a source of fish for food aid.
| 1989 | 1992 | 1995 | 1997 | 1998 | |
| Canned fish | 13 070 | 14 533 | 11 902 | 12 794 | 9 069 |
| Dried fish | 1 429 | 448 | 0 | 75 | 114 |
| Stock fish | 415 | 411 | 0 | 0 | 0 |
| Edible fat from fish | 6 251 | 7 338 | 3 113 | 5 636 | 5 185 |
| Total (include others) | 21 298 | 22 730 | 15 012 | 18 505 | 14 368 |
| 1986 | 1992 | 1995 | 1997 | 1998 | |
| Norway | 11 628 | 10 021 | 11 160 | 11 915 | 5 515 |
| Canada | 3 506 | 4 336 | 2 781 | 2 031 | 3 311 |
| Germany | 2 517 | 2 218 | 2 000 | 688 | 380 |
| Japan | 3 489 | 3 460 | 3 485 | 4 535 | 3 926 |
| Total (include others) | 22 860 | 20 835 | 19 590 | 19 369 | 13 380 |
19. Over almost 20 years, FAO has created various entities working in the field of fish trade, information and technical activities: GLOBEFISH, INFOFISH (Intergovernmental Organization for Marketing Information and Technical Advisory Services for Fishery Products in the Asia and Pacific Region), INFOPECHE (Intergovernmental Organization for Marketing Information and Cooperation Services for Fishery Products in Africa), INFOPESCA (Centre for Marketing Information and Advisory Services for Fishery Products in Latin America and the Caribbean), INFOSAMAK (Centre for Marketing Information and Advisory Services for Fishery Products in the Arab Region), EASTFISH (Fish Marketing and Information Service for Central and Eastern European Countries), INFOYU (Assistance to the Fishery Industry Marketing Information in China). Most of the regional services are now operating as independent intergovernmental organizations, but there is a strong networking function which is operational in the system. With greater trade liberalization and globalization, unbiased information on price developments and market trends becomes essential for producers and traders, especially medium and small size companies in the developing world.
20. The Fish Marketing and Information Service for Central and Eastern European Countries (EASTFISH) has now entered its second phase. So far 10 countries (Belarus, Bulgaria, Denmark (Host), Estonia, Georgia, Latvia, Lithuania, Moldova, Poland and Ukraine) have signed the project document. The project aims to facilitate the structural adjustment of the fishery sector in participating countries by providing marketing information and managerial expertise, particularly in the field of business procedures and in the preparation of investment proposals, feasibility studies and business plans according to the requirements of financing institutions. In October 1999, the member countries decided to create an Inter-governmental Organization (EUROFISH) to continue this work after the end of project funding.
21. FAO, financed from August 1997 to July 1999 the establishment of INFOYU, which created a network of fish market information, advisory and trade promotion centres in China. The unit was successfully established and the Government of China decided to continue its activities through Government funding.
22. FAO is now launching the FISH INFOnetwork formed by GLOBEFISH, INFOFISH, INFOPESCA, INFOPECHE, EASTFISH, INFOYU and INFOSAMAK. The INFOnetwork has a user friendly home page: www.globefish.org. New global activities will be carried out, such as investigations on tariff and non-tariff barriers, the impact of freezing on board on employment, training courses in WTO matters for member countries, to cite only the recently approved ones.
23. Fisheries is a subject of discussion in the Committee on Trade and Environment (CTE) of the World Trade Organization (WTO). COFI:FT/VII/2000/8 (Subsidies and their Effects on Fish Trade) reviews the activities of this Committee in the field of subsidies.
24. Under the dispute settlement procedure of the WTO, various disputes deal with seafood products. On 8 October 1996, India, Malaysia, Pakistan and Thailand complained against the United States ban on importation of shrimp and shrimp products based on environmental considerations (enforcement of Turtle Excluding Devices on shrimp trawlers). The Philippines placed a similar complaint on 25 October 1996. On 6 April 1998, the WTO panel ruled against the United States ban. On 13 July 1998, the US notified its intention to appeal certain issues of law and legal interpretations developed by the Panel. The Appellate Body reversed the Panel's finding that the US measure at issue is not within the scope of measures permitted under the chapeau of Article XX of GATT 1994, but concluded that the US measure, while qualifying for provisional justification under Article XX(g) fails to meet the requirements of the chapeau of Article XX. The report of the Appellate Body was adopted on 6 November 1998.
25. On 5 October 1995, Canada complained against Australia's prohibition of imports of salmon from Canada based on a quarantine regulation. On 10 April 1997, a panel was established. The US and the European Communities reserved their third-party rights. The Panel found that Australia's measures complained against were inconsistent with Articles 2.2, 2.3, 5.1, 5.5, and 5.6 of the SPS Agreement, and also nullified or impaired benefits accruing to Canada under the SPS Agreement. The report of the Panel was circulated to Members on 12 June 1998. On 22 July 1998, Australia notified its intention to appeal certain issues of law and legal interpretations developed by the Panel. The Appellate Body reversed the Panel's reasoning with respect to Articles 5.1 and 2.2 of the SPS Agreement but nevertheless found that Australia had acted inconsistently with Articles 5.1 and 2.2 of the SPS Agreement; broadened the Panel's finding that Australia had acted inconsistently with Articles 5.5 and 2.3 of the SPS Agreement; reversed the Panel's finding that Australia had acted inconsistently with Article 5.6 of the SPS Agreement but was unable to come to a conclusion whether or not Australia's measure was consistent with Article 5.6 due to insufficient factual findings by the Panel. The report of the Appellate Body was circulated to Members on 20 October 1998. The Dispute Settlement Board (DSB) adopted the Appellate Body Report and the Panel Report, as modified by the Appellate Body Report, on 6 November 1998.
26. The Sub-Committee is invited to take note of the information provided and contribute additional experience. It is requested to provide guidance for future work of FAO in the area of international trade in fishery products, particularly with regard to:
The Sub-Committee is also invited to comment on its experience with the FISH INFOnetwork.
