Tilapia Market Report - May 2009

Tilapia production worldwide continues to grow

The global financial crisis has reduced demand for tilapia and other Chinese export species, causing their domestic market prices to fall. However, it is likely that demand will revive soon, as lower priced seafood products are expected to sell well in coming months. On the other hand, Chinese tilapia production, which experienced a drop in 2008 due to cold winter temperature, is likely to grow rapidly. Prices of tilapia are forecast to stay stable at their present level.

Further production increases in China

As the demand for tilapia continues to grow worldwide, production is expected to reach 3 million tonnes worldwide by 2010, compared with 2.6 million tonnes in 2007. China accounts for about half of global tilapia production, while Asia, including China, grows roughly 75% of the world’s
tilapia. China, the world’s leading tilapia producer, announced that it expects to produce 1.2 million tonnes of tilapia by 2010. China aims to export USD 460 million (EUR 360 million) worth of tilapia by 2010; China also plans to improve technology in eastern coastal cities, including a planned research facility for disease prevention, high-quality feed and ecologically friendly cultivation methods.

China enters fresh tilapia fillet market

US imports of fresh tilapia fillets were 29 200 tonnes in 2008, a 10% increase over 2007. This was mainly due to higher Chinese and Honduran shipments. However, Ecuadorian exports declined to only 8 500 tonnes, 3 000 tonnes less than in 2007. Local producers are affected by competitors that take advantage of their closer proximity and lower production costs. Ecuador has to produce in dollars and thus has very high production costs. Ecuador used to be the sales leader of tilapia to the US, followed by Honduras and Costa Rica, but has lost that position in the last few years.

In 2008, the main exporter of fresh tilapia fillets to the US market in value terms was Honduras, with sales of USD 61.7 million. Meanwhile, Ecuador generated USD 54.7 million in revenue from fresh tilapia shipments. At this time, fewer tilapia are harvested in Ecuador; only those already contracted for sale. Production has fallen, as tilapia cannot be placed in other markets as is being done with shrimp. The Central American producers are taking advantage of their competitive edge and that will have lasting effects on tilapia and other products.

In terms of frozen tilapia, China leads the market, both for the whole and the fillet market. Despite the crisis in production that had influenced the market in early 2008, China managed to ship more tilapia to the US market in the second half of last year, and will continue to do so in coming years.

Overall, 2008 US tilapia imports rose 3.3% to 179 500 tonnes from 173 800 tonnes the year before. The value of tilapia imports also increased, rising from USD 559.8 million in 2007 to USD 734.4 million in 2008, reflecting rising prices for the popular freshwater species.

China was the leading exporter of tilapia to the USA last year, sending over more than 119 000 tonnes worth more than USD 436 million.

The bulk of China’s
exports are primarily in frozen fillet form, which represents roughly 73% of all tilapia exports from China. But trade data show a sharp increase in fresh tilapia fillet imports from China in 2008. Imports rose to 3 100 tonnes from just 17 tonnes in 2007.

Stable prices foreseen

Similar to pangasius, tilapia should be able to compete well on the world market, even in this period of economic crisis. In addition to the US market, the European market is likely to open up. In Spain, Pescanova, the main seafood trader and producer, is aiming to sell 10 000 tonnes in the Spanish market. Tilapia prices are likely to stay stable in coming months.

Report prepared by
Helga Josupeit