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Pausing to chart future landmarks to steer global fish, seafood trade by.

Pausing to Chart Future Landmarks To Steer Global Fish, Seafood Trade By

History is the key to understanding tomorrow. While the industry's `players' and technologies have dramatically changed, the `game' of supply and demand remains much the same. But there is one big difference on the supply side: aquaculture.

There are new frontiers of opportunity, risk and challenge ahead for the frozen fish and seafood industry. An infrastructure of refrigeration technology has been put in place throughout the world which will accommodate a sizeable increase in the production and marketing of frozen products.

This magazine's 30th anniversary issue provides the ideal occasion to review the past with an eye to the future. An examination of back issues of Quick Frozen Foods International has resulted in gleanings for use in determining the direction in which this industry is headed.

A recent forecast of world demand for 100- to 110-million metric tons of fish and seafood annually was made by the director general of the United Nations' Food and Agriculture Organization (FAO). Fulfillment of this prediction is attainable in view of what has occurred in this industry during the past three decades.

Using 1959 as a base year, the annual world-wide production of fish and seafood has increased from 35-million to 92-million metric tons. Without the universal application of the freezing process as a means of preserving fish and seafood, such a growth rate would have been impossible to achieve.

One problem with analyzing the fish and seafood industry is that it really is not one industry. Rather, it is made up of a series of parts such as a salmon industry, a shrimp business, a tuna industry, and so on. Furthermore, our interest is essentially in the frozen fish and seafood industry.

During 1959, the year that E.W. Williams launched the international edition of Quick Frozen Foods as a separate publication, about 3-million metric tons of fish and seafood were packed and sold in frozen form. In 1987 more than 22-million metric tons were marketed frozen, a growth which exceeded all other classifications by a wide margin.

Furthermore, it is impossible to calculate the additional volume of fish and seafood which has been frozen first, then canned, cured or marketed "fresh." Estimates run into the millions of tons.

Advances in refrigeration technology have kept pace with processing and warehousing requirements. Blast freezers have replaced coils for the most part, and spiral, tunnel and plate freezers are now in use on processing lines.

The makers of refrigerating equipment have done an outstanding job of transferring technology to developing countries. Manufacturers in Europe, Japan and the U.S.A. have provided seafood processors engineering and financial assistance in both developed and developing countries. Without the close cooperation between the manufacturers and processors, such rapid expansion of the fish and seafood industry would have been impossible.

The proliferation of factory freezer ships around the world in the 1960s and '70s had an important bearing on the international frozen fish industry. These vessels contain sizeable refrigerated storerooms. Often acting as a "mother" ship, they process by freezing, canning, or reducing to meal or oil whatever fish is delivered to them. Some employ as many as 500 men and women aboard, and are equipped to remain at sea for months at a time. Reportedly, more than 50 such vessels from the U.S.S.R. now ply the seven seas which could explain why the Soviet Union holds number two position in the line-up of world harvesters of fish. The Japanese fishing companies use a number of such ships, and the U.S.A. tried a couple unsuccessfully.

The widespread culturing of fish, crustaceans and mollusks has expanded immeasurably the need for refrigerating equipment in the form of mobile freezing units, ice-making equipment, in-plant freezing and processing lines, and machinery for cold storage warehouses. The need for new facilities to process, freeze and store cultured shrimp, alone, extended to all parts of the globe.

Almost all frozen seafood is traded between countries as a commodity. This was true in 1959, and it is still true today. The number of traders -- buyers, sellers and middlemen -- has grown exponentially, with at least 60 countries now involved either importing, exporting or financing any number of frozen seafood products.

Trading frozen seafood requires close attention to price cycles, fluctuating supply/demand, and changing rates of foreign exchange. Because of the number of producing countries involved and the countless markets in need, it is safe to say that trading in frozen seafood requires a greater degree of sophistication than trading in any other commodity.

Looking back to the 1960s and early '70s, the strength of the dollar gave U.S. importers quite an advantage over competitive buyers in other countries, so supplies flowed into markets from New York to Los Angeles at prices the consumer would find reasonable. With the ascendency of the value of the Japanese yen, keen competition developed resulting in a lift in prices of those fish and seafoods which were desired in both nations. Producers in those countries supplying both Japanese and U.S. customers found a very favorable development during that period as they could take advantage of which ever market bid the best price.

World trade in fish and seafood was affected by the general acceptance of the "exclusive economic zone" in the '70s. Negotiations between the "haves" and the "have-nots" resulted in higher prices in the markets affected.

The Japanese trading companies came into preeminence in the marketing of frozen seafoods in the late '70s as a result of their successful development of reliable sources of supply around the world. As the economy of Japan grew stronger and the value of the yen in relation to the U.S. dollar increased, those Japanese firms which had offices in the producing countries were in perfect positions to develop joint ventures and other financial arrangements that guaranteed supplies for an expanding market at home.

Looking ahead, the European Common Market will enter a three-way race for supplies in 1992, and the relative value of foreign exchange between the various nations seeking supplies will take on an even more important role in the quest for product from the developing countries producing the seafood. Higher market prices will result as the demand increases and the available supplies decrease.

All markets have benefitted from aquaculture. Forecasts by the FAO of an annual production of 22 million tons, or about 20% of the total world output, will further enhance the importance of freezing as a means of preserving and marketing as most cultured seafood has been and will continue to be processed in that manner.

Marketing Frozen Seafood

In 30 years the functions involved in marketing frozen seafood -- processing, freezing, packaging, branding, transporting, storing, financing and selling -- have not changed, but most of the participants have. In the U.S. the National Fisheries Institute Yearbook for 1959-60 listed 92 importers, most of whom traded in frozen fish and seafood. The number grew to over 450 in 1988, with only 26 of the importers listed in the earlier Yearbook still operating. Several foreign companies with offices in the U.S. are listed in the latest edition.

Many who are importing are not members of the National Fisheries Institute. With the rise of the entrepreneurial economy during the '80s many men and women -- experienced and inexperienced -- have entered into some phase of the marketing of frozen seafood, with an ever increasing number becoming importers, brokers or agents.

The most dramatic change in the frozen seafood market has been brought about by aquaculture. More orderly marketing is possible, and speculation is reduced. Aquaculture is more akin to farming than fishing. Many opportunities for creativity and innovation in marketing methods for cultured species lie ahead. More merchandising and less dependency on price bargaining in the market will result.

As for The Future?

According to the landmarks posted during the past three decades, the opportunities for growth for the frozen seafood industry lie principally with the aquaculture industry. To date, almost all of the farmed fish and seafood has been processed and marketed frozen, and no other method of preservation is likely to take its place.

The population of the world, now at about 5-billion people, will reach 6-billion in a decade. Annual worldwide per capita consumption of fish and shellfish (for human food) averages about 27 pounds (estimated live weight equivalent), with a range from 164 pounds per person in Japan to 42 pounds in the U.S.

Recently, the director general of the FAO warned that stocks of many species of bottom-dwelling fish as well as crustaceans were being depleted. He also cautioned against evident widespread pollution, and declared that aquaculture was the means by which growth in fish and shellfish production will be provided on into the future.

There are risks involved for both fishermen and fish farmers. The fisherman faces the long-range risk of a depletion of resource. The farmer runs the short-term risk of producing for a market in which the supply temporarily exceeds the demand. Conservation will help the fisherman, and improved marketing will help the farmer.

The principal challenge is to improve marketing methods which include planning production to meet the market's needs, streamlining the flow of product from producer to consumer to reduce costs, and shortening the length of time between harvesting and sale to the consumer. There is no lack of demand, but at what price? That all depends upon the overall marketing effort.

In international trade, frozen fish and seafood products comprise the largest segment of the frozen food industry today. As in the past, so in the future QFFI will supply important and timely information.

PHOTO : Developing countries with tropical climates are playing an increasing role in aquaculture.

PHOTO : This shrimp hatchery is in Java, Indonesia.
COPYRIGHT 1989 E.W. Williams Publications, Inc.
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Article Details
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Author:Branstetter, Henry R.
Publication:Quick Frozen Foods International
Date:Jul 1, 1989
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