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Hake
Market Report - June 2008
Chile
Landings
In 2007, landings of hake (including hoki) in Chile totaled
134 793 tonnes, 7.2% less than in 2006, when landings were 145 280 tonnes. These
figures show that 2007 hake production was the lowest over the last ten
years, and landings have been continuously falling since 2001. Hoki
(Macruronus magellanicus) remained the main species and, with 63 739 tonnes,
it accounted for 47% of total landings, followed by common hake (Merluccius
gayi), with 45 591 tonnes (34%) while southern hake (Merluccius australis),
with 25 463 tonnes, accounted for the remaining 19%. Since 2001, hoki has
been the species with the most significant fall in landings, as seen in the
chart below.
During the first four months of 2008, landings amounted to 33 480 tonnes,
1.2% down on the same period in 2007 (33 895 tonnes). Lower landings of
common and southern hake were balanced by higher landings of hoki. The latter
species accounted for 39% of landings in the period under review, and grew
12% compared to the figures of the previous years. The other two species
showed a reduction in landings, -7% for common hake, and -11% for southern
hake. The evolution of landings between January and April for the last three
years can be observed in the following graph.
This species has suffered a reduction of stocks in recent years. In order to
reverse this trend, the Fishing Subsecretary (SUBPESCA) is preparing a
conservation and recovery plan. According to an analyst from that office,
common hake still has a chance to recover. Landings of this species dropped
significantly but in the last few years they have stabilized. According to
this officer, most of the stocks are formed by juveniles, and adults are of a
lower quality than before. However, the measures adopted in the past (such as
reduction in quotas) have managed to stop the decline in the biomass. The
hake fishery is one of the oldest activities in the country’s fishing sector,
and it has already gone through similar cycles. Several factors could have
jointly affected the resource, such as squid, one of the species’ predators,
as well as bad fishing practices both in the artisanal and industrial
sectors. The elaboration of a program, to deal with such practices with the
participation of the Chilean National Confederation of Artisanal Fishermen
(CONAPACH), should benefit the resource. Also, at the end of 2007, a project
was presented by a member of parliament to ban trawling which would help the
recovery of groundfish species.
Growth in the value of exports reflected in higher unit values
Last year, Chilean exports of hake reached US$ 165.5 million, which represents
a 6.7% growth in export values compared to 2006, when the value of exports
was US$ 155.2 million. In terms of volume, however, exports showed a 12.4%
reduction, from 60 093 tonnes in 2006 to 52 618 tonnes in 2007. These
variations result in a 22% increase in the unit value of exports between 2006
and 2007. This is probably a result of the lower supply from other South
American countries.
The main export product category during 2007 in terms of value was frozen
whole and H&G southern hake, with US$ 44.6 million and 8 934 tonnes. This
category accounted for 27% of the value of total exports. In terms of volume,
the most significant item was fresh whole and H&G southern hake, with 10
838 tonnes worth US$ 40 million. In the overall results, whole and H&G
hake was the top group category, both in terms of volume and value, with 25
126 tonnes worth US$ 92.7 million (-12% and +12% respectively compared with
2006). This category showed the strongest growth in terms of unit values,
+27%.
In the first trimester of 2008, Chilean exports of hake fell both in terms of
volume and value compared to the same period in 2007, from 9 481 tonnes worth
US$ 27.9 million between January and March 2007, to 7 941 tonnes worth US$
27.4 million in the same period in 2008 (-16% and -2% respectively). These
variations imply a 17% growth in unit values.
The main exported product for the first quarter of 2008 was fresh whole and
H&G southern hake, with 2 987 tonnes worth US$ 11.3 million, accounting
for 38% of the exported volume and 41% of the value. It is interesting to
note that among the significant export products, the only one that showed
positive results in the period reviewed is frozen fillets of hoki. This item
grew strongly both in terms of volume and value, +37% and +65% respectively. As
for unit values, the strongest growth was shown for frozen whole and H&G
southern hake (+35%), which was also the second most important export item,
with 1 339 tonnes worth US$ 7 million.
In 2008, a new category, canned products, appeared in export statistics which
was not present in 2007 or 2006. During the first three months, exports of
this category amounted to 15 tonnes worth US$ 2.8 million.
Main export species
The main export species during 2007 was southern hake, which accounted for
41% of total export volumes and 57% of values. This share grew compared to
2006, when it accounted for 36% and 52% of volumes and values respectively. The
second export species during 2007 was hoki, which accounted for 37% and 26%
of volumes and values respectively. This species experienced a fall in its
share of total exports, since in 2006 it accounted for 43.5% and 33% of the
volume and value respectively of exports.
In the first three months of 2008, southern hake showed a similar trend
compared to the same period in 2007 while its share of total export volumes
and values grew from 53% and 67% respectively to 57% and 71%. Hoki also
increased its share of total exports, from 16% and 11% of volumes and values
between January and March 2007 to 24 % and 15% in the same period in 2008. As
a result, in the period reviewed, common hake saw a drop in total export
volume and value share from 31% and 22% respectively to 18.5% and 13%.
It is interesting to note the difference between the share of the different
species in the volume of landings and the volume of exports. Probably, the
main cause of this discrepancy is the fact that while southern hake is mainly
exported whole and H&G, common hake and hoki are exported mainly as
fillets.
Spain is the main
buyer of Chilean hake
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Last year, Spain was the main destination for
Chilean exports of hake. This nation accounted for 40% of total export
volumes and 53% of total values (21 105 tonnes worth US$ 87.8 million). The
second destination in terms of value was the US market, with 8 781 tonnes
worth US$ 15.6 million, followed by Japan (4 021 tonnes; US$ 9.5 million),
Poland (3 738 tonnes; US$ 7.7 million), and Venezuela (765 tonnes; US$ 7.2
million). The latter shows the highest unit value for purchases of hake, US$
9.5/kg.
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Between
January and March 2008, Spain and the US remained the main buyers of Chilean
hake in terms of value (US$ 18.3 million and US$ 1.8 million respectively),
as well as in terms of volume (4 396 tonnes and 730 tonnes respectively). The
Spanish share in total exports, was higher in the current period (55% and 76%
respectively in terms of quantity and value). The third market in importance
was Portugal (300 tonnes worth US$ 1.5 million, followed by Germany and
France. Venezuela again is placed as one of the main markets for Chilean hake
in terms of value with the highest unit value (although lower than the level
for 2007 of US$ 8.1/kg).
Outlook
After suffering strong reductions, Chilean stocks of hake now seem stable at
relatively low levels. The Chilean authorities are concerned and are
preparing additional measures, apart from lower quotas, to improve the level
of stocks. In addition, the lower landings are causing conflicts between
industrial and artisanal fishermen, not only because of the distribution of
the quotas, but also because some artisanal fishermen organizations accuse
the industrial fleet of being partly responsible for the current crisis.
The lower supplies of hake also appear to be behind an increase in average
export prices as reflected in an increase in export unit value. Higher fuel
costs are also likely to be impacting prices. However, it is possible that
the appreciation of Chilean peso has helped to counteract average export
price increases With the information
available so far, a conservative scenario would suggest that supplies of
Chilean hake for the international market show a further reduction in 2008.
Argentina
Landings
In 2007, Argentinean landings of hake amounted to 392 928 tonnes, 18% less
than in 2006. The main species was by far hubbsi hake (Merluccius hubbsi),
which accounted for 75% of total hake landings. The second species was hoki
(Macruronus magellanicus), with 94 919 tonnes and a 24% landings’ share. Finally,
with 2 477 tonnes, southern hake (Merluccius australis) accounted for the
remaining 1%. All species showed a drop compared to 2006, hoki showing the
most significant (-21%).
Between January and May 2008, landings of hake were 167 073 tonnes which
represents a decline, -11%, compared to the same period in 2007 (187 624
tonnes). With 115 898 tonnes, hubbsi hake had a 69% share in total landings,
followed by hoki with 49 684 tonnes (30%). Landings were lower for all
species with hoki showing the most significant drop at -19%.
Landings of hubbsi have been declining continuously since 2004. In 2007 they
reached the lowest level for the last five years. In the first five months of
2008, as seen in the chart above, there was a further reduction in catches. The
deterioration of the state of the resource is a consequence, according to
several analysts, of years of over-exploitation, and a lack of measures to
provide long term sustainability. As a consequence, the Agriculture,
Livestock, Fishing and Food Secretary (SAGPyA) cut the total allowable catch
(TAC) of hubbsi hake by 20% for 2008, from 340 000 tonnes in 2007 to 270 000
tonnes. That TAC was set also for the next five years. On the other hand,
according to several reports of the National Institute of Fisheries Research
and Development (INIDEP), the stocks are formed mainly by juveniles, which
implies special measures to preserve them. The effects of the lower quotas
and a raw material shortage are starting to show. As an example, the yellow
fleet from Puerto Rawson, in the Province of Chubut, was forced to return to
the port since they exhausted, in the first five months, the quota set for
the entire year. Many operators were hoping to benefit from a “social quota”,
but it is small and part of it must be kept for incidental captures of hake
when the fleet is targeting shrimp. The situation in Puerto Madryn, although
it is not as extreme, is not very different, and operators there are very
concerned regarding the imminent slowdown of activities. This not only
affects vessels and crews, but also processing plants as well as transport
services and other associated activities.
Falling exports balanced by higher unit values
In 2007, exports of Argentinean hake amounted to 161 620 tonnes worth US$
370.2 million. Compared to the 197 028 tonnes worth U$S 365 million
registered in 2006, these figures represent an 18% volume drop and a 1.4 %
value increase, implying an average unit value increase of 27% between 2006
and 2007.
The most important product category was frozen fillets, with 107 925 tonnes
worth US$ 287 million, accounting for 67% and 77% of total volumes and values
respectively. The second most important category was frozen whole and H&G
hake, with 43 106 tonnes worth US$ 66 million (27% and 18% respectively of
total volumes and values).
At a higher disaggregation level, the main export product was frozen hubbsi
fillets, with a 57% and 68% share in total volumes and values respectively. Among
the most significant export products, hubbsi fillets showed the strongest
unit value increase at +24.5%. The second product category in importance
during 2007 was frozen whole and H&G hubbsi hake, which accounted for 20%
of total volumes and 13% of total values. A strong increase in average unit
values is also evident for this category at +24%. The only other category
showing a comparable volume and value increase over 2006 was fresh hubbsi
fillets ,at +7% and +30% respectively, and with a 21% unit value increase. The
main destination for this product in 2007 was Uruguay (probably as raw
material for further processing and export), which purchased almost 90% of
total volumes and 77% of values, followed by Spain with a 10% and 23%
respective share of volumes and values.
In the first quarter of the present year, exports were 10% lower in volumes
(from 41 324 tonnes to 37 070 tonnes) and 4.5% higher in values (US$ 88
million vs. US$ 92 million) compared to the same period in 2007. The overall
average unit value growth over this period was 16.5%.
However, first quarter trends for individual product categories were
different to the annual trends for 2007. The main category remained frozen
hubbsi fillets (17 897 tonnes, US$ 56 million), with a share of 48% and 60%
respectively of total volumes and values, followed by frozen whole and
H&G hubbsi hake with 8 100 tonnes worth US$ 14 million (shares of 22% and
15% respectively). But some categories showed in the first three months of
2008 remarkable variations compared to 2007. Exports of whole and H&G hubbsi
grew 127% and 149% in terms of volume and value respectively; however, the
average unit value for this item grew below the overall average of +10%. Also
whole and H&G products of southern hake showed a very good performance in
the period (+87% and +105% respectively in terms of volume and value). Fresh
fillets, despite being a minor export category, grew significantly, +80% in
quantity and +105% in value, and if we consider that exports have almost
reached half of the volume exported during the entire 2007, it can be
expected that sales of this item for 2008 as a whole will be up on 2007. Spain
was the main buyer of fresh fillets, with respective shares of 91% and 89% of
total volumes and values.
Brazil consolidated its leading market position as
importer of Argentinean hake
Last year, Brazil was the main destination for Argentinean hake, both in
terms of volume and value (28 184 tonnes; US$ 70 million). Among the top
importers of Argentinean hake, France was, however, the only country that
registered higher purchases both in terms of volume and value compared to
2006 (+1.5% and +20%). In a context of lower volumes, Brazil nevertheless
consolidated its leading position with an 18% increase in the value of
imports. In 2006, this country was the main value destination and was placed
second in terms of volume after Spain. 98% of Argentinean hake volumes traded
with Brazil in 2007 were frozen fillets, mainly of hubbsi (96% of total
trade), and sales of fillets represented 99% of export values (97%
corresponding to hubbsi fillets).
Sales to the Spanish market (25 386 tonnes; US$ 57 million) were more
diversified. 52% of total volumes were frozen fillets and 41% whole and
H&G, and in terms of value, the share of each category was 53% and 38%
respectively. Again, hubbsi hake was the most important species, 40% of total
volumes were frozen fillets and 34% were whole and H&G frozen hake (in
terms of value, the share of these products was 42.5% and 26% respectively). Frozen
fillets of hoki hake accounted for 12% and 10.5% of total exports to Spain in
terms of volume and value.
Sales to Italy and the US in 2007 were not very different in volumes (10 978
and 10 536 tonnes each respectively), but the value of sales to the Italian
market was sensibly higher (US$ 35.5 million vs. US$ 27 million for the USA).
In both cases, the most important product was frozen fillets of hubbsi hake,
which accounted for 88% of volumes and 94% of values for Italy; and 90% of
volumes and 92.5% of values for the USA. The higher values for Italy are
reflected in higher average unit values of almost US$1/kg for Argentinean
fillet exports to this market compared to the USA.
In the first quarter of 2008, Brazil was an even more significant
destination. With 8 180 tonnes worth US$ 24 million, this country accounted
for 22% of the quantity and 26% of the income generated by total exports. Frozen
fillets were the main category (86% and 89% of total volume and value), being
86% hubbsi fillets and 11% hoki fillets. In terms of value, 89% of total
exports were frozen hubbsi fillets, and 9.5% were frozen hoki fillets.
Spain remained as the second top buyer, with a volume of 5 004 tonnes worth
US$ 14 million, its share remained similar to the one registered in 2007. 45%
of total exports to Spain in the period reviewed were frozen hubbsi fillets
(and 46% of total value), followed by frozen whole and H&G hubbsi hake
(28% and 19%), and thirdly, whole and H&G southern hake (12% and 19% of
total volume and value respectively). In general, exports to Spain remain
more diversified than to other major destinations.
Among the top three destinations for Argentinean hake, Italy was the only one
to show an increase in volumes (+16%) and values (+14%) (2 456 tonnes worth
US$ 8 million) between January and March 2008 . Another interesting point is
the remarkable growth of sales to Jordan that placed it in this period as a
significant destination. While between January and March 2007 exports to this
country were 463 tonnes worth US$ 636 100, in the same period in 2008 trade
totaled 1 355 tonnes worth US$ 2.3 million (+193% and +253%).
Outlook
Argentina is at the edge of a crisis in the hake fishery sector with the
industry adversely affected by the fragile state of the resource. In some
ports, fleets have already completed the quota allowed for the entire year. This
is causing obvious concern for many operators both in terms of livelihoods
and corporate profitability with corresponding employment implications for
the various ancillary activities.
The lower availability of hake was reflected in the volume of exports, which
fell in 2007 and with no signs of recovery in 2008. Higher international
prices have helped ease this situation, helped by a strong exchange rate
policy (although it has weakened somewhat more recently).. The short term
scenario for the hake fishery in Argentina is not very optimistic. Additional
measures to assure the long term sustainability of the resource are being
requested by many operators, but this is likely to have a strong negative
impact on activities in the short term.
Uruguay
Landings
Trends observed in Uruguay in 2007 were not very different to those in the
other two countries. Last year landings of hake totaled 31 865 tonnes, 3%
below the volumes captured in 2006 (32 708 tonnes). Hubbsi hake (Merluccius
hubbsi) was the main captured species, it accounted for 96% of total
landings, while the remaining 4% were landings of hoki hake (Macruronus
magellanicus). This
structure of landings was similar in 2006 (95.5% and 4.5% each).
In the first third of 2008, captures of hake were 32% higher than in the same
period in 2007. Hoki hake accounts for most of this growth. Landings of hoki
totaled 1 742 tonnes, 687% higher than the 221 tonnes registered in the first
four months of 2007. Catches of hubbsi hake were 9 954 tonnes, +15% compared
to 2007. This growth in landings of hubbsi is a result of better performance
of captures in the Uruguay-Argentina Common Fishing Zone. This better
performance has also benefited Argentinean vessels which in many cases have
moved from the Argentinean Sea to this area to exploit the greater
availability of hake.
Exports affected by closure of the EU market
Uruguayan exports of hake in 2007 fell both in terms of volume and value
(-17% and -5%). These rates imply a growth in unit values of 14.5%.
Reductions were observed in all export categories with the strongest
reduction observed in the, albeit minor, “other frozen products” category. The
main export category was frozen fillets, which accounted for 65% of total
volumes and 85% of total values. The main item within this category is frozen
fillets. 58% of total volumes and 75% of the exported values. It is
interesting to observe the remarkable growth of exports of frozen fillets
with sauces, both in terms of volume and value, +64% and +85% respectively. 99%
of this item is sold to European markets, mainly Italy, France, Belgium and
Spain (respectively 38%, 21.5%, 23.5% and 16% of volumes and 40%, 22%, 21%
and 16% of values). Breaded frozen fillets exhibited the highest increase in
unit values during 2007 (+24%). 47% of volumes of this product is sold to
Italy and 44% to Spain.
In November 2007, after a visit of inspectors of the European Commission, the
EU lifted the restrictions on imports of Uruguayan fishery products. The
reason for this decision was not only the lack of company compliance with
several health requirements, but also the lack of controls from the competent
authority, as well as a lack of knowledge of some legislation on food safety.
This decision had a direct impact on imports of hake during the first five
months of 2008. Exports of hake fell in terms of volume, value and unit value
(-21%, -35.5% and -18% respectively). The only category which showed positive
results in the period reviewed was frozen whole and H&G hake, which grew
45% and 53% in terms of volume and value respectively. This product is sold
mainly to African, Middle-East and East European countries and so was not
greatly affected by the EU resolution.
After a new visit of the inspectors in May, the EU allowed again the National
Direction of Aquatic Resources (DINARA) to authorize exports to its member
countries. This resolution is pending on the approval of the member countries
by mid June.
In
2007, European markets were the main destination for Uruguayan exports of
hake. Italy, France, Germany, the Netherlands, Spain and Belgium together
accounted for 56% of total volumes and 57.5% of total values. The main buyer
of Uruguayan hake during 2007 was Italy, with 4 813 tonnes worth US$ 23
million. As already mentioned in other reports, Uruguay is one of the main
suppliers for the Italian market, with a 15% share of total supply in terms
of volume, it is placed third behind Argentina (36%) and Spain (18%).
Apart from European markets, the other significant destination for Uruguayan
hake during 2007 was Russia with 3 370 tonnes worth US$ 5 million. It is
interesting to note that among the main markets for Uruguayan hake, this is
the one indicating the lowest unit values. While in European markets the
average export unit value was US$ 4.1/kg, in the Russian market the average
value was US$ 1.5/kg. Both for the EU and Russian markets, the main traded
products were frozen fillets.
Between January and May 2008, and after the closure of the EU market, the
structure of the main buyers of hake from Uruguay changed significantly. Italy
remained the main destination in terms of volume, with US$ 3.6 million (683.5
tonnes). Considering the volume of exports, the main market was Russia with 1
145 tonnes worth US$ 2 million. But it is important to highlight the immediate
effect that the
European Commission had on Uruguayan exports of hake. In terms of volume,
sales to the main European markets fell significantly: Italy, -64%; Spain, -44%; Germany, -62%, France, -71%,
the Netherlands,
-76%; Belgium,
-86%. On the other hand, other countries showed an outstanding growth on the
volume purchased from Uruguay,
what might be seen as an effort of exporters to allocate the production
surplus to other markets, probably with less non-tariff barriers. As an
example, sales to Ukraine
in this period were 788 tonnes worth US$ 1.2 million (+382%, +513%), trade
with Canada
was equivalent to 192 tonnes and US$ 1 million (+22%, +51%, and with Brazil, 545
tonnes worth US$ 766 500 (+147%, +197%). However, sales to these “new”
markets, excepting Canada,
have a much lower unit value than the European market, while sales to Italy and Canada have an
average unit value of US$ 5.3/kg, unit values in the other main markets in
this period were US$ 1.7/kg in Russia and US$
1.5/kg in Ukraine.
Sales to Spain
and Germany
have an intermediate unit value (US$ 3.3/kg and US$ 2.9/g each). Now that the
EU market reopens, it should be expected that sales to those countries
recover, although special attention should be paid to Canada, as a
potentially expanding market.
Outlook
Uruguayan production of hake is, as well as Argentinean production, affected
by the fragile state of the resource, despite improved results this year in Uruguay. In a
context of increasing international prices, Uruguayan exports had an important
setback after the EU, the main buyer, closed its markets for fishery products
from this country. This was immediately reflected by export figures, which
showed a strong reduction in the first five months, as well as a change in
the structure of markets of destination. However, now that sales to those
markets are allowed to resume, it should be expected that these nations
recover their importance, specially considering that products achieve a
higher unit value there. On the other hand, it seems that the closure of the
main markets, allowed other potentially interesting purchasers to appear,
such as the case of Canada.
It will be interesting to observe if the increase in sales to that country
was only temporary or if it becomes a strong permanent customer.
Report prepared by Javier López
(INFOPESCA)
FAO CLOBEFISH 2008
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