28/5/2007 - A shift in the world's largest seafood market

WEEKEND FEATURE: A shift in the world's largest seafood market

JAPAN
Friday, May 25, 2007, 23:30 (GMT + 9)


The news spread on radio, TV, Internet, and newspapers in most seafood exporting countries around the world, and was carried by Agence France Press, Reuters, other news agencies, as well as on FIS.com: Japanese consumers are shifting their taste preferences from seafood to meat.

Seafood is too expensive, it is difficult to prepare, it carries an unpleasant smell, are only some of the many hard-hitting arguments Japanese consumers used to explain why they are increasing their consumption of meat and eschewing seafood, according to a Japanese Government whitepaper.

Is this recent development in Japanese seafood consumption unexpected? Hardly. In a world where many fisheries are in trouble, and an aquaculture industry is producing large volumes but with little variation in species, it is only natural.

Large populations in many countries are increasing their purchasing power. In China seafood is seen as a luxury item. As millions of Chinese are increasing their wealth Japanese consumers have to accept that even if they always have been willing to pay premium prices for quality, there is an increasing number of consumers in other countries also willing to pay top price for quality.

Japan Today sees it this way

But there is no real reason for deep concern about the Japanese market. It is still and will continue to be, an important market for many seafood exporters worldwide. Before looking at the supply and consumption of different seafood products in the Japanese market, it is interesting to look at how the Japanese newspaper Japan Today presented the governmnet findings this way:

“Household consumption of seafood here may be surpassed by meat in the near future because strong demand for fish in China and other countries is pushing up prices amid a growing taste for easy-to-cook meat, the government said in a report released Tuesday.

Japan should put the brakes on declining seafood consumption by diversifying its sales networks and expanding catches to stabilize prices, according to the fisheries white paper for fiscal 2006.

There is potential demand for seafood, given that health-conscious consumers tend to prefer fish over meat, the report notes. Citing a survey by the Internal Affairs and Communications Ministry, the white paper says annual per capita volume of seafood purchased in Japan came to slightly less than 13 kg in 2005, marginally topping meat.

Seafood purchases have been on a downward trend since a per capita total of 16 kg was reached in 1965. Meat purchases have been above 12 kg since the mid-1980s, compared with 6 kg in 1965, it says.

The white paper says children are getting fewer chances to eat seafood. Busy parents are reluctant to prepare and cook fish and wash up afterward because all these things take time, it says.

Based on a survey by the government-backed Agriculture, Forestry and Fisheries Finance Corp., the report says 70 percent of housewives in their 30s do not fillet fish and 10 percent do not grill it.

In China, Europe and the United States, meanwhile, seafood consumption is increasing on the back of growing interest in fitness and health, leading to higher seafood prices on global markets and reduced purchases by Japanese importers, the white paper says.

Meanwhile, Japan's consumption of such fish as Norwegian salmon, US red salmon, and cod has fallen, it says.

According to the internal affairs ministry survey, young people eat less fish then their elders.

While in the past, people began to prefer fish over meat as they grew older, today's middle-aged consumers are eating more meat and less fish the same as the young, according to the ministry."

The message to the world is that the consumption of some species has fallen, but this is a far cry from all species experiencing a fall in consumption. For some products there is currently a lack of supply. A reduction in Japanese seafood consumption does not necessarily mean fewer opportunities for the world's seafood industry. It depends on Japan's own catches and aquaculture production.

Japanese catch volume has been relatively stable over the last four years. Larger variations in catch are mainly seen for pelagic species like anchovies, pacific mackerel, and Japanese sardines. In fact, Japan is, due to large catches of Pacific mackerel ,a large net exporter of this species.

Where Japan used to be a very important consumer of Norwegian mackerel, it is suddenly a large competitor for Norway in some markets.

Understanding the Japanese market is becoming more and more important so time is not wasted trying to sell the wrong seafood products to a finicky consumer.

Japanese packaging

A very important factor in understanding the behaviour of the Japanese market is knowledge about how products are presented to its consumers. When European and American consumers are buying seafood by the kilo, the Japanese consumers are more moderate, preferring to purchase nicely presented seafood in much smaller quantities.

Therefore sometimes lower catches of specific fish species result in the need for very quick imports, as the number of portions or consumer packs are reduced substantially. There is a lot more portions of sushi in a tonne of bluefin tuna than there are steaks of 200 grams.

A way to locate potential

What sort of information could give a good idea about the potential ad market conditions for products that exporters have for sale? Five easy points on a check list to stay abreast of the market trends:

What the local fleet is catching. This fish is usually fresh and will reach the consumers first.
What have been imported in the past and lately.
What have been exported in the past and lately
The latest frozen stock holding figures.
Price developments on Market Prices FIS.com.
Catches by Japanese fishing fleet

The easiest obtainable information on Japanese catches can be found in figures that gauge sales volumes and average ex.vessel prices in the main Japanese harbours. The authorities present them in Japanese, but the following table shows the catch figure for 2003 – 2006:

Landed volumes
by Japanese vessels in major ports
( tonnes) 2003
2004
2005
2006

Bluefin tuna
1,158
4,914
4,050
2,892

Albacore tuna
25,019
32,949
20,214
26,820

Bigeye tuna
10,142
11,668
9,413
14,776

Yellowfin tuna
11,163
7,557
8,703
8,626

Striped marlin
2,597
2,449
1,904
1,654

Swordfish
4,784
5,228
5,043
5,899

Skipjack tuna
89,733
58,905
95,455
78,964

Japanese sardine
37,597
27,927
9,763
39,171

Round herring
10,280
12,305
14,445
17,778

Anchovy
239,642
202,863
113,995
133,205

Jack mackerel
165,910
158,069
126,474
109,117

Mackerel-scad
22,190
16,292
12,072
17,603

Pacific mackerel
254,151
237,301
515,878
536,144

Saury
225,068
181,348
198,556
208,463

Cod
23,827
28,596
34,373
35,550

Pollock
125,620
121,480
98,195
100.395

Atka mackerel
112,608
138,526
111,056
79,336

Japanese flying squid
66,577
79,958
69,579
41,248

Flying squid
560
20
729
14

Yellowtail
27,530
25,469
20,433
28,822

Flatfish
12,178
11,395
11,469
12,569

Sea bream
6,483
7,520
6,938
5,879

Tanner crab
696
692
376
466

Octopus
6,982
6,222
6,631
6,578

FROZEN





Bluefin tuna
2,615
1,795
1,371
1,423

Albacore tuna
30,105
21,456
15,615
9,521

Bigeye tuna
22,307
23,066
22,339
20,767

Yellowfin tuna
32,712
29,565
30,584
32,180

Striped marlin
25
13
5
13

Swordfish
11
18
0
0

Skipjack tuna
198,861
207,497
246,460
220,431

Pollock
3,073
4,811
4,070
7,610

Japanese flying squid
distant water
19,768
4,040
5,476
6,332

Japanese flying squid
coastal
55,458
43,559
47,507
53,021

Flying squid
41,886
46,713
38,852
49,237

Total
1,889,316
1,762,186
1,908.023
1,812,209



Source: Japan Fisheries, FIS.com, NMFS

When there are important changes in catches information regarding the sudden shifts or even gradual tendencies are always available in FIS.com World News or Market Reports. The figures above are available monthly with approximately eight weeks delay. This is still fresh enough information to make us of when making decisions.

In addition to wild supply and fish from fish farms imported volumes are interesting to follow, and can be looked up on FIS.com, updated monthly with eight weeks delay. Check information by country, and just select Japan.

Frozen and salted inventories

To keep stable supply Japanese processors and importers are keeping relatively large frozen and salted stocks of products.

Frozen inventories
by 28 February 2007 Species
Tonnes
Change % 1 month
Change % 12 month

Albacore tuna
10,571
-9
-5

Bigeye tuna
16,932
-3
3

Yellowfin tuna
17,153
-4
-1

Other tuna
18,984
10
4

Skipjack
32,064
-
1

Salmon
109,319
4
1

Pacific pink salmon
11,731
-
3

Herring
16.068
-16
13

Sardine/anchovie
34,165
-6
35

Japanese Sardine
22,531
-5
53

Jack mackerel
39,299
1
-8

Mackerel
136,333
-7
21

Saury
42,700
-14
-26

Flatfish
20,434
2
-

Cod
10.974
6
30

Pollock
2,850
-3
-9

Sea bream
5,260
5
-18

Other finfish
214,518
-2
6

Clam
30,916
-1
17

Shrimp
87,877
-4
5

Squid common
47,733
-3
-4

Cuttlefish
8,332
-
-20

Other squid
31,964
-5
-12

Octopus
16,610
-4
-29

Pollock surimi
36,161
-7
-5

Other surimi
33,504
3
4



Source: Japan Fisheries, FIS.com, NMFS
These inventories have a significant nfluence on the interest or willingness to import new supplies.

Salted inventories by Feb 28 2007 Species
Tonnes
Change % 1 month
Change % 12 month

Salmon
10,573
6
48

Pacific pink salmon
1,692
-1
74

Pollock roe
21,769
-1
7

Salmon roe
6,541
-12
-22

Herring roe
3,247
-10
3



Source: Japan Fisheries, FIS.com, NMFS

Good opportunities

Using the holdings of frozen stocks is a guide to good opportunities for sales of sea bream and saury. For both species there is significant reduction in frozen stocks. In the following table there are some main species shown. It indicates movement of stocks from a 12-month and one month perspective.

Salted salmon is up 46 per cent on last year, and up six per cent in one month. It is a indication that the market for the salmonid species used for salting is getting saturated.

Sardine inventories dropped in a one-month term in February, but were up 53 per cent on last year. Another specie that currently has reduced market potential in Japan is a sardine. The reason is a bumper catch last year, therefore the frozen stocks are higher than the total Japanese catch in 2005.

It is important to keep in mind that inside each species group there are special products being imported despite high inventories. An example of this is large mackerel with high fat content. But the markets slows down as large volume of smaller mackerel is being pushed towards consumers with lower than normal prices.

Meanwhile, In February last year frozen mackerel stocks were 12 per cent higher than the same time one year earlier. This combined with good local catches of Pacific mackerel caused some trouble especially for Norwegian exporters.

The Japanese importers could simply not enter into negotiations before they were sure there was a market for imported mackerel.

February this year the stock of frozen mackerel was 21 per cent higher than by the end of February last year. There was more than 136,000 tonnes in stock. The positive aspect can be found in that there was a reduction of eight per cent in stock sfrom end of January to end of February.

However, a reduction was expected as catches of Pacific mackerel have been falling early in the first few months of the year. So this should not give too much hope to European mackerel exporters.


A look at the Japanese import figures for mackerel clearly shows a falling trend:

Japan Mackerel Imports Country
Tonnes 2004
Tonnes 2005
Tonnes 2006
Tonnes Feb-Mar 2004
Tonnes Feb-Mar 2005
Tonnes Feb-Mar 2006
Tonnes Feb-Mar 2007

Rep. Of Korea
804
1,463
430
525
86
174
85

China
2,023
1,474
1,027
717
538
303
270

Thailand
-
22
-
-
-
-
-

Philippines
-
103
-
-
103
-
-

Indonesia
-
10
-
-
-
-
-

Iceland
-
25
-
-
25
-
-

Norway
85,100
71,377
40,234
12,232
11,455
8,560
9,477

Denmark
1,173
2,019
847
741
1,460
729
496

United Kingdom
2,443
6,374
1,326
460
2,705
1,237
50

Ireland
3,477
3,485
682
813
246
421
35

Netherlands
1,507
550
195
54
10
9
-

France
34
222
12
-
-
12
-

Germany
221
79
-
210
41
-
-

Canada
3,018
6,599
3,205
583
1,979
2,637
236

USA
1,040
876
59
244
240
22
-

Chile
-
23
426
-
13
-
-

Argentina
-
13
-
-
-
-
-

New Zealand
116
167
6
34
84
-
-

Total
100,956
94,881
48,409
16,613
18,985
14,104
10,469


Source: Japan Fisheries, FIS.com, NMFS
If other factors like catch and export are added to the numbers above, it is easy to see why Japan is a buyer's market today, given the abundance of supply.

Mackerel market
supply (tonnes) situation
2003 - 2007
2003
2004
2005
2006
2007 – 28 Feb

Catch
254,151
237,301
515,878
536,144
121,678

Import
128,269
100,956
94,881
48,409
8,904

Export
6,288
22,354
55,749
172,985
22,512

Net supply
376,132
315,903
555,010
411,568
130,582

Frozen stock
94,956
95,598
121,581
141,605
136,333



Source: Japan Fisheries, FIS.com, NMFS
Similar studies can be made on each species or species group, clearly indicating the market situation. What is certain is that, despite falling consumption is there are also rising opportunities in the Japanese market. However, for salmon and pelagic species there is currently a glut of fish on the market. For other products and species such as sea bream, cuttlefish, octopus, surimi, saury, pollock, and some tuna species there are falling inventories, increasing the chance of making a sale.

Related articles:

- Giant catches of mackerel making market tough to navigate
-Japanese mackerel importers in an unceremonious 'hara-kiri'
- Seafood companies facing off against meat in the market

More on Japanese market:

- FIS Import Statistics
- Market Prices


By Terje Engoe
www.fis.com