Seabass & Seabrean

Difficult times for bass and bream sector as stubbornly low prices stifle growth

The Mediterranean seabass and seabream industry suffered from severely depressed prices and challenging market conditions in 2018. Demand has been growing but not fast enough to keep pace with rapid supply expansion led by Turkey. The expected slowdown in production growth this year is long overdue but prices are likely to remain low.


A combination of factors, including a favourable exchange rate, government assistance and development opportunities in Middle Eastern markets has seen Turkey quickly rise to become the world’s leading producer of farmed seabass and seabream. Turkish harvests of both species, primarily from large-scale offshore cage farming operations, have more than doubled in the last decade. In the last five years or so, this growth rate has accelerated as exporters sought to simultaneously undercut European producers in EU28 markets and avail of new opportunities elsewhere. Encouraged by their rapid market share gains, the Turkish sector pushed for further expansion, licensing and opening multiple new sites in areas such as Mersin and Hatay while increasing juvenile production. At the same time, sector-wide investment drove efforts to develop improved production processes and technologies while growing aquaculture companies acquired and built hatcheries and feed plants to secure a more vertically integrated supply chain.

Meanwhile, Greek production has also picked up in the last few years after a long period of poor growth conditions, as the industry sought to take advantage of improved price levels in 2015 and 2016. Greek aquaculture companies previously rescued by banks were restricted and sold off, with the most notable deal being the joint acquisition of Nireus and Selonda by foreign investors. As of early 2019, the European Commission has approved the merger of these two companies with Andromeda, another large Greek aquaculture firm owned by the acquiring fund. The merger is conditional on the sale of some assets including farms and hatcheries and the transfer of knowledge to the purchasing entity in order to create a viable competitor, but the newly created company will nevertheless command around 60 percent of total Greek production, which has increased by some 25 percent since the banks originally took control of Nireus and Selonda in 2015 and 2014 respectively.

The end result of the rapid expansion in Turkey and a recovery in Greece has been an approximately 60 percent rise in combined global production of seabass and seabream from 2010 to 2018, and an increase of some 34 percent in the three years from 2015 to 2018. Despite Turkey’s success in developing new markets and an upward demand trend in a number of important EU28 markets, supply has increased too fast for the market to keep pace. With prices suffering and profitability taking a major hit, the situation for Mediterranean producers of seabass and seabream has deteriorated significantly. Greek companies begun posting financial losses in 2017 and this continued into 2018 as further increases in production pushed prices below the breakeven level. In Turkey, a progressively weaker lira helped stave off the worst effects of the price decline initially but this depreciation was a symptom of wider economic problems that have now begun to impact both the Turkish domestic market and the industry itself. After a long period of expansion, largely built on debt financing, financial conditions are tightening and access to credit is being restricted. At least one large aquaculture company has filed for bankruptcy as a result.


In the large markets of Italy, Spain and France, where seabass and seabream imports are almost entirely comprised of fresh whole fish, the market in 2018 was universally characterised by oversupply and weak prices. Although demand has been relatively good in these countries due to moderate improvement in economic conditions, the market saturation point had already been reached well before the hike in production levels in 2017 and 2018. Historically there has been limited scope for product innovation or value addition in these traditional markets and as a result there are few options for marketers looking to soften the price impact of a spike in supply. In Northern Europe, however, fillets have been increasing steadily in popularity due to increased interest in convenience products, a trend that is only slowly beginning to catch on further south. This is a welcome diversification in the seabass and seabream product range, providing an outlet for Turkish producers in particular, who have developed their processed product supply chains to a greater degree than their Greek counterparts. The recent introduction of an Aquaculture Stewardship Council (ASC) standard for seabass and seabream is a development that will allow for much needed segmentation of the market. Several aquaculture companies have already started the certification process, expected completion in late 2019.


Full year export statistics reported by Greece, Turkey and Spain in 2018 point to seabass and seabream exporters’ need to find alternative outlets for excess production volumes. Total fresh whole export volume of both species from these three major producers combined was up by around 14 percent and 6 percent for seabass and seabream respectively in 2018, compared with the previous year. Exports to markets outside the top eight were up by 45 percent for seabass and 18 percent for seabream over the same period. Export revenues were flat for both seabass and seabream despite higher volumes. Lower prices failed to stimulate additional demand in Italy, Portugal, France or the Netherlands, but Spanish importers took advantage of increased availability of cheap Turkish bass. In the Russian Federation, imports of fresh seabream were down by 1 percent year-on-year to 3?600 tonnes in 2018 while bass imports were up by 6 percent to 3?400 tonnes. Almost all of the Russian Federation supply is exported from Turkey, primarily directed to Moscow and St. Petersburg, although frozen product is now being transported to Ekaterinburg and Kaliningrad.

Out of the other secondary markets, Lebanon and the United States of America also saw imports increase in 2018, but relatively speaking the consumer base in these countries is still small compared to the large EU28 markets.


The average unit value of fresh whole bass exports by the major producers was down by around 12 percent for 2018, at around EUR 4.40 per kg. For fresh whole seabream, the drop was limited to around 7 percent, to EUR 4.15 per kg. Euro prices for medium-sized Greek seabass and seabream observed on the Italian market in late 2018 were touching the lowest levels seen in five years. For Turkish exporters, prices in Turkish lira terms rose significantly in 2018, up by almost 20 percent for seabream and 22 percent for seabass. However, these increases should be understood in context of the broader economic situation within Turkey that saw inflation rates spike to 25 percent by late 2018.


Total supply of farmed seabass and seabream should stabilize in 2019, with flat or slightly negative production growth expected by most analysts. Low prices, slowing economic growth in the EU28 as a whole and a negative outlook for the largest market, Italy, combined with the poor economic climate in Turkey, have contributed to conservative business planning as companies seek to minimize further losses. The gloomy outlook also means there is limited appetite for investment into infrastructure or research and development. At the same time, however, the experience of the farmed salmon sector has shown that periods of excess supply can also represent good opportunities to increase penetration in old and new markets. Cheap and plentiful fish are easier to market to otherwise hesitant buyers, particularly when prices for many other key whitefish species are now prohibitively high.