After a year of lower harvests, firming prices and relived pressure on producer margins, 2016 has started off well with a sharp upturn in seabass and seabream prices on European markets. Further reductions in supply from the major sources should see this situation continue, giving a further boost to the expanding Turkish industry and allowing Greek companies the opportunity to build on what are now more solid foundations.

Total supply of bream fell by approximately 6% in 2015, according to figures from a recent Kontali analyse report, with the expected impact of pushing prices strongly upwards. Multi-year highs were reached in the peak mid-summer season on the major Italian market, with 300-450 g sizes reaching EUR 5.80 per kg (CIF). Bass production, meanwhile, remained flat compared with the previous year, which kept prices for this species relatively lower. Forecasts are for a further 3% drop in production this year, with both Turkey and Greece seeing the results of reduced juvenile production over recent years.

With fewer fish to sell, Greek exporters reduced volumes to many major Mediterranean markets in 2015. Exports to Italy fell in particular, and Turkish exporters managed to further increase their share of this important market with cheaper product and more readily available volumes. Greek exports to Spain also fell significantly for the second year in a row as investment in the Spanish farmed bass and bream industry is boosting domestic production. In contrast to Turkey, Greece remains heavily dependent on the core EU markets, with Italy, France and Portugal taking more than three quarters of its total export volume.

That said, the increase in Greek export revenue despite the drop in volumes, points to an improvement in margins and hence business stability for an industry that has been struggling for some years now. After refinancing, restructuring and efforts to reduce costs, investor confidence in the sector appears to be recovering slowly as profitability returns. The newly consolidated and revitalized industry will now be looking to build steadily on the back of technological and product innovation, although there is still a distinct wait-and-see attitude amongst understandably cautious would be investors.

In Turkey, the rise in prices for bream in early 2016 was below expectations as domestic sales and exports for bream were lower than expected resulting in a surplus stock for 400-600 and 600-800 g fish. Slightly rising prices remained flat in March. In contrast, there was a price boost for bass and specifically large fish exceeded exceptions. According to industry sources, losses in stocks of bass due to diseases and accidents (poor sea conditions) in 2014 and 2015 will continue to boost the prices of bass in 2017.

According to some sources, the demand for Turkish juveniles in 2016 is expected to be around 400 million. The breakdown for production is likely to be 250 million bass and 150 million for bream.

A new development in the Turkish industry is a shift in hatcheries’ sales strategies, which will have an impact on supply of fish in the near-term. Previously, Turkish growers usually stocked their cages with juveniles of around 5 g, which are more resistant to disease and marine conditions. To mitigate the risk associated with growing fry to 5 g juvenile size, however, hatchery operators have begun encouraging their growers to start with smaller fish by lowering the price for 2 g juvenile. This also carries a risk though, as early stocking of cages with 2 g juveniles has increased the incidents of flexi bacteriosis outbreaks, resulting in an estimated 5% loss of stocks. Though slight, this 5% loss will have an impact on supply of marketable fish for 2017 and 2018.