22/06/2007 - The pangasius attack on whitefish

WEEKEND FEATURE: The pangasius attack on whitefish

WORLDWIDE
Friday, June 22, 2007, 23:50 (GMT + 9)


The production of pangasius is showing a higher growth rate in volume than any other high volume fish species. From 1997 until 2005 pangasius production increased from 22,000 tonnes to 376,000 tonnes, while export of fillets increased from 7,000 tonnes to 140,000 tonnes. This year its production, which mainly is centred in Vietnam, will increase to around an incredible one million tonnes.

Pangasius the quixotic resource

For most Europeans the pangasius has been seen as an exotic species. But with increasing volumes entering the European market, it is becoming an accepted and ordinary fare on many dinner menus. Whether it is competing against salmon or whitefish has not yet been determined, and there is no easy way of knowing for sure.

Salmon is showing an increase in consumption, while whitefish (bottomfish) species are facing lower catches. Meanwhile, the cod fishery in the North Sea and Baltic Sea is very restricted, and falling catches should result in increasing prices. The pangasius invasion in many markets worldwide has been putting pressure on cod prices.

Haddock have a different market than cod, but supply, a short time ago, was so high that Norwegian exporters were complaining of a dramatic fall in prices. But what is the situation if analysed in a longer perspective?

Russia imported around 40,000 tonnes of pangasius last year, while import to the European Union increased from 55,000 tonnes in 2005 to more than 110,000 tonnes last year.

Nearly all pangasius being exported to Europe goes through the Netherlands, and from there fillets are distributed trhoughout all of Europe. Most large retailers are able to offer boneless fillets without skin for EUR 2.50 – EUR 3.00 per kilo.

The pangasius is a fast growing fish, reaching commercial size in around six months, and compared with farmed cod its cost of production makes farmed cod take last place. It is a very competitive fish species along the parameters of price, availability, taste, growth, and so on.

While the price of cod fillets is higher, haddock filets are also more costly in most retail outlets around Europe and the United states. Still cod and haddock are far from losing market shares.

Different markets

The main reason for the prevalence of cod and haddock is the different uses given to those species. The Norwegian export of cod, and how it is used for products with long traditions in many markets, is it easy to see why cod, and also haddock, saithe, tusk, ling, atlantic redfish, hake and other whitefish is still being competitive.

Cod is sold fresh, salted, semi-dried and dried, as whole fish, fillets, portions, and several other presentations. Clipfish, the semi-dried salted cod product has long traditions in markets such as Portugal, Brasil, and Spain. Some 81 per cent of Norway's clipfish exports, also known as bacalao in the many markets, is exported to Brazil and Portugal. Portugal is also a large importer of salted and frozen cod, which is used for the production of bacalao.

Dried cod, also known as stockfish, is enjoying the two main markets of italy and Nigeria. Italy imports 61 per cent of the Norwegian production, but represent 81 per cent of the export value. Nigeria being the market for 24 percent of the production only represents six percent of the value. The reason is different qualities produced for the different markets.

In 2006 China imported 5,444 tonnes of cod from Norway. This was mainly small cod. China is a cheap place to process this cod into other products. Very much of the cod China imports from the North Atlantic is re-exported to Europe after processing.

The United Kingdom has a taste for filleted and fresh cod, and is an important market for Norway, Faroese Islands, and Iceland.


Export of different cod products - Norway 2006
Product
Market
Value in NOK million
Quantity in tonnes
% share of product export value
% share of product exported quantity

Clipfish whole
Portugal
1,027
18,500
58
58

Clipfish whole
Brazil
430
7,490
24
23

Stockfish
Italy
440
2,983
81
61

Stockfish
Nigeria
34
1,191
6
24

Salted
Portugal
487
12,070
50
50

Salted
Spain
233
5,992
24
25

Frozen whole
China
124
5,444
30
31

Frozen whole
Portugal
96
3,670
23
21

Frozen fillet
UK
398
9,304
48
48

Frozen fillet
France
195
3,674
23
19

Fresh whole
Denmark
246
8,583
45
48

Fresh whole
France
112
3,186
20
18

Farmed
France
40
1,052
29
29

Farmed
Netherlands
32
724
24
20



From 70 to 80 per cent of all pangasius imported to Europe is sold in the HoReCa segment, but is also available in supermarkets. Though it is still a novelty in major fish markets, it is available as fresh fish, the consumption of which has been growing faster in Europe than it has for frozen fish.

Prices are increasing

It is interesting to see the development in the prices on cod and haddock. Last year market prices was higher than in 2005, and for most sizes, products and qualities the highest recorded for the period 2002 until 2005.

Price examples
Cod 2002 - 2006
Faroese Island ex.vessel
Average price
Currency DKK

Average price
2002
2003
2004
2005
2006

Cod 7.0 kg
21.16
23.49
18.32
21.58
24.22

Cod 4.0 - 7.0 kg
19.57
21.42
17.90
21.37
23.45

Cod 2.0 - 4.0 kg
14.00
14.82
16.72
18.68
20.15

Cod 1.0 - 2.0 kg
10.58
10.51
11.25
13.98
16.47

Denmark auction average
Currency DKK

Cod
20.51
20.63
20.34
22.26
24.26

Denmark ex.vessel average
Currency DKK

Cod
18.17
15.50
15.12
16.96
17.51

Vest-Norges Fiskesalgsl ex.vessel
Currency NOK

Cod
not available 12.44
13.64
14.08
16.34

Export FOB Norway
Currency NOK

Cod, all products
37.12
35.64
40.63
40.52
45.06





Price examples
Haddock 2002 - 2006
Faroese Island ex.vessel
Currency DKK

Average price
2002
2003
2004
2005
2006

Haddock 1.0 - 2.0 kg
14.29
10.27
9.67
11.96
13.97

Haddock 0.5 - 1.0 kg
12.44
8.35
8.43
10.63
13.03

Haddock 0.0 - 0.5 kg
7.69
5.26
6.90
9.17
11.37

Denmark auction average
Currency DKK

Haddock
9.48
10.42
10.17
10.44
12.98

Denmark ex.vessel average
Currency DKK

Haddock
9.04
8.36
9.96
9.87
12.45

Vest-Norges Fiskesalgsl ex.vessel
Currency NOK

Haddock
na
8.25
2.37
10.13
12.76

Export FOB Norway
Currency NOK

Haddock all products
21.83
15.01
14.95
17.52
21.82




Prices on haddock were as high in 2002, and if figures are adjusted for inflation, prices were a bit higher. However, in 2003 prices dropped. And since than prices have increased steadily.

The figures above illustrate the price paid for landings in the Faroese Islands, to vessels landing cod in Denmark, and at all Danish auctions combined, along with the price paid to vessels in West-Norway, and also for all cod and haddock products exported from Norway, listed. The picture is very clear. They have not suffered very much because of the increased import of pangasius.

Future development

It looks as if pangasius has been absorbed in a way not affecting the whitefish market, neither in Europe nor in the United States. As long as the fish is supplied frozen the competition will not be great.

Falling cod quotas in most European fisheries, together with the reduction in illegal catches will continue to push the prices on cod and comparable species upwards. Probably the reduction in illegal fishery in the North Atlantic alone will create a large enough gap to fill in most of the pangasius being imported to Europe. If so, pangasius will continue to fall in price, at the same time that cod will continue to rise as long as the quotas are kept at the current level.


By Terje Engoe
www.fis.com