Seafood aftershock to impact U.S.

Articles
March 15, 2011

Seafood aftershock to impact U.S.

With no more Asian seafood for a while, many questions arise about the shape and direction of the U.S. market.

The length and degree of seafood supply disruptions from Japan and China to the United States will clearly take time to determine. While rescuers and others continue to assess the toll of the devastating earthquake and tsunami in Japan, vivid images of death and destruction have brought offers of aid from nations worldwide.

The people most directly affected will still struggle to right themselves over time. Even with help, Asian seafood exports won’t likely be available in the U.S. for a significant period. Americans have developed a growing taste for seafood – more than 16 pounds per capita, the National Oceanic and Atmospheric Administration reports – and it’s unlikely to stay on hold until Asian sources are sailing once again.  

Markets can be unforgiving, regardless of circumstances. Therefore, The Lempert Report wonders which suppliers and species will try to fill the gap between supply and consumption, which producers might attempt to fill demand and secure market share, how could this affect seafood prices, and would effects pass over quickly or linger? Once Asian supplies are restored, could they win back their share of the U.S. market?

There are many more questions than clear answers. We do believe seafood prices at U.S. retailers will have to rise until Asian supplies come on stream again, and then a price war could ensue. Time will tell which U.S. fisheries could step up without overfishing and damaging their own resources. But between the Gulf of Mexico oil drilling disaster and continuing questions about the feed on fish farms, there are limits to the aggressiveness of U.S. resources to fill a large demand gap.

How large? China alone, the world’s top producer and consumer of fish and seafood products, exported more than $11.5 billion in fish and seafood products in 2009 – 20% of it to the U.S., notes Canada’s Agri-Food Trade Service. Fish filets and other fish meat were $3.5 billion of the total exports, crustaceans $1.2 billion, and prepared or preserved fish $1.2 billion. By contrast, the U.S exported to China less than $500 million worth of fish and seafood products in 2009.

Japanese combined exports of fisheries, farm and forestry products rose 13.1% to $2.38 billion – 35% of it to the U.S., the Japanese Farm Ministry reports, in a Japan Today account. 

If supplies remain short, prices should remain higher longer, and the focus on the integrity of fish sourcing should only intensify.