The sense of cautious optimism that returned to the European farmed seabass and seabream sector in 2015 on the back of improved prices was somewhat dampened in 2016 as the market was hit by unexpectedly large volumes of farmed Turkish bream. With further increases in supply now on the horizon, all stakeholders must take steps to prevent a repeat of the long period of unsustainable low prices that previously crippled the Greek industry.

Although bass and bream are generally farmed together as part of the same operation with the markets relatively integrated, there has been a noticeable divergence of the two species over recent years in market terms. While bass prices have remained stable, bream prices have been volatile as supply tightened and then rapidly expanded in 2015 and 2016 respectively. It is also worth noting that bass has found a foothold in the potentially lucrative US market, whereas US buyers have still shown little to no interest in imported bream. This preference could potentially be due to the fact that bass is more a familiar fish to US consumers, whereas bream remains lesser known. Addressing the imbalance in the bream market before prices fall further is now a priority for the Mediterranean industry as a whole.

Despite previous forecasts pointing to an overall production decline, both Turkey and, to a lesser extent, Greece, reported significant increases in bream export volumes in 2016. As a result, bream export prices began falling in early summer and have dropped steadily since then. By December, the average Greek export price for fresh whole bream was €4.59 per kg while the equivalent price for bass was €5.27 per kg. Total revenue taken in by Greek exporters rose due to higher volumes, but this does not translate into profitable business when €5 per kg is considered the minimum required breakeven price. In the case of bass, an average export price of around €5.50 per kg has now been maintained each year since 2014.

Turkish exporters, meanwhile, have significantly benefitted over recent years from a sustained depreciation of the Turkish lira versus the euro. Combined with the fact that the Turkish bass and bream sector was government subsidized until recently, this has meant that Turkish suppliers have been able to offer a price to European buyers that has been very difficult for the majority to resist. This reality is reflected in 2016 trade statistics, which show large increases in imports of Turkish fish, particularly bream, by almost all major EU markets. Even Greek importers have tapped into the plentiful supply of cheap bream, posting a 205 percent increase in imports of fresh bream from Turkey in volume terms.

After the downward trend in Turkish bream prices in the last quarter of 2016 and early 2017, prices recovered moderately in February in March with ex-farm (ice-packed) prices growing about 20 percent in Turkish lira terms. The increase was relatively greater for smaller sizes, increasing by about 30 percent for 200-300 g bream compared with 11 percent for the 800-1 000 g sized class. Turkish bass prices continue to weaken however, as farmers try to sell large-sized fish before maturation during the spawning season (March–April). Greek export prices for both species have shown little movement so far in 2017, but can be expected to begin climbing as summer approaches and the weather improves.

Italy

Italy is the largest market for bass and bream in Europe, supplied by both Greece and Turkey in addition to its own domestic production. Traditionally, domestically produced fish has been sold as a premium product and thus does not compete directly with imported supply. Italian fish continues to be sold at the supermarkets for often times 50 percent more than imported fish with consumers pushed to buy Italian products by fishmongers. Imported fish constitutes a much larger market, however, with approximately 55 000 tonnes sold each year compared with 15 000 tonnes of Italian fish. Underlying demand in Italy remains firm for both species, and import volumes were up overall in 2016. However, with more bream available in Greece, Turkey and Spain, Italian buyers have been available to negotiate lower prices.

Spain

The Spanish market differs from its Italian counterpart in that it is supplied primarily by its own domestic aquaculture sector, which also produces significant volumes for export. Historically a major bream producer, Spain has seen a rapid increase in bass production over the last decade, bringing harvest volumes almost level with bream (estimated 2016 figures were 18 000 tonnes and 21 000 tonnes for bass and bream respectively). Although lower prices this year are certainly a factor, the Spanish market is seemingly well capable of absorbing both growing domestic supply and rising import volumes, suggesting underlying demand is strengthening.

France

Out of the three major Mediterranean markets for bass and bream (Italy, Spain and France), France is where Turkish exporters continue to find it most difficult to establish themselves, despite their significant pricing advantage. For French consumers, the closer the source of produce, the better, and if buying imported fish at all, they would much sooner buy from Greece or Spain than Turkey. Spain, in particular, is directing its growing bass production to the French market where prices are very healthy. However, even French buyers took advantage of the surplus of Turkish bream available in 2016, almost doubling their import volumes of the product.

Other markets

In the Russian Federation, overall demand for bass and bream has stagnated over the last two years due to higher consumer prices, a weaker currency and general economic deterioration. Russian Federatin imports of fresh bass accounted for 2 030 tonnes in 2016, declining 24 percent compared with the previous year. Imports of fresh bream were more stable reaching 1 675 tonnes (+1 percent) in 2016, reflecting the stimulating effect of lower bream prices. Almost 100 percent of the bass and bream imported by Russia is supplied by Turkish companies, with very minor volumes originating from Morocco and Tunisia.

In the UK, strong import demand was seen earlier in 2016 when buyers were targeting cheap Turkish fish, but this activity diminished in year-on-year terms as the effects of Brexit took hold in the last two quarters.

Outlook

The major challenge presently facing the bass and bream sector is the higher harvest volumes expected in the largest producing countries of Greece, Turkey and Spain over the next two years. It should be recognized that production forecasts in the sector have not been particularly reliable in the past, but in fact, realized supply volumes have historically been more likely to exceed forecasts rather than vice-versa. Although the still fragile Greek industry is particularly at risk, the Mediterranean industry as a whole will need exert a coordinated effort to cut production costs, develop a more varied product range for the modern consumer and diversify its export markets if sustainable price levels are to be maintained. Continuing development of the Turkish domestic market is another focus area for the sector, as Turkish consumers are an important source of demand that will be needed to absorb the additional supply volumes.

It also remains to be seen exactly how total supply growth will be split between the currently oversupplied bream market and the relatively stable bass market. Industry sources in Turkey suggest that bass accounted for around 60 percent of the 400 million juveniles to be used for on-growing in 2017, with the remainder being bream. The same industry sources report that landings of anchovy, the main source of raw material for production of good quality local fishmeal, have not been sufficient to meet demand in Turkey, with the result that some large-scale vertically integrated bass and bream aquaculture companies have been looking for alternative supply sources and are acquiring fishmeal plants in countries like Mauritania.

The report analyses the market situation over the year 2016 and the first quarter 2017.