Seabass & Seabrean

Unexpected bass and bream volumes halt price rise

After a year of slowing production growth and firming prices, an improved outlook has led to some much needed investor confidence in the farmed seabass and seabream sector. However, caution still prevails in 2016. Although prices for both species have remained relatively high in the first quarter, surplus volumes from Spain and Turkey have slowed this upward trend.

In Greece, a fragile bass and bream aquaculture sector has been buoyed by the upturn in prices resulting from a cut back in harvest volumes. As a result, the major farming companies have seen a steady improvement in financial results continuing into 2016. Not all companies have pulled themselves out of the red yet, however, and in their case improvement means a reduction in heavy losses rather than an overall return to profitability.

Considering that progress on cost reduction in Greece is lagging well behind that of other aquaculture industries, a recent paper from the University of Stavanger outlines that it is important for the sector that the price level is maintained at current or high levels.
Though Greek production volumes are marginally down, Spanish producers and Turkish exporters have together increased the total bass and bream supply in the EU market this year. This increase could potentially exert downward pressure on prices, particularly if the market uncertainty that has followed the UK's referendum vote worsens.

In the longer term, with the future stability of the Greek sector still far from guaranteed, it is likely that further consolidation with be necessary to reap the much needed benefits of economies of scale and ensure the continued competitiveness and profitability of the industry.
In the first quarter of 2016, Greece exported 2.3% less combined volume of bass and bream compared with the same period in 2015, comprised of a 5% drop in fresh bream exports and a 1.3% increase in fresh bass exports.

These figures broadly reflect flat production growth at farms for the latter species and an estimated 10% increase for the former. Average prices for both species rose marginally in the first quarter, building on 2015 gains, but dropped below 2015 levels in major markets by June.
In Italy, prices for bream were some 10% down compared with June 2015, while prices for bass were around 14% lower. Exports to Italy, traditionally accounting for around half of all Greece's bass and bream exports, fell by 8% in volume terms while the Netherlands was notable in the first quarter for boosting imports of Greek bass and bream by 76%.