3rd AD-HOC FISH PRICE INDEX WORKSHOP
by Stefania Vannuccini
Fishery Statistician (Commodities)
FAO Fisheries and Aquaculture Statistics and Information Service

• Key role of outlook models
• Importance to have a good understanding on perspectives of developments in the food and agriculture sector
• Need to develop a model to analyze the outlook of the fisheries and aquaculture sector

• In terms of food security
• The significant growth of aquaculture production
• The expansion of the coverage of food products and of the oil and feed markets
• The links and interactions with the agriculture sector

• Integrating farming
• Ecosystems, markets, products, prices, innovation, technology
• Competition on water and land resources
• Feed
• Fish meal, fish oil
• Raw material from agriculture and livestock

• OECD FAO Aglink-CO.SI.MO. modelling system
• Partial equilibrium model for international agriculture and food markets
• Medium term projections
• Perform alternative scenarios
• OECD-FAO Agricultural Outlook publication

• OECD
• Dynamic, partial equilibrium supply-demand model
• Yearly basis since early 1990s
• Medium-term projections
• Agricultural key commodities
• Assumptions
• Coverage
• Close collaboration with member countries
• Influence of agricultural policy

• FAO World Food Model
• FAO COmmodity SImulation MOdel
• Yearly basis since 2004
• Updating Cycle
• Coverage
• Commodities
• Macro economic assumptions
• Parameters

• Country views are the starting point
• AGLINK CO.SI.MO is used to get a consistent and coherent picture
• Model outcomes adjusted through expert opinions
• Final reviews in OECD commodity working groups
• The datasets are available at: www.agri-outlook.org

• Construction of a satellite model on fish and fishery products
• After a few years of use as a stand alone component, possible merging to the AGLINK-COSIMO model
• Benefit also for the model as will expand the coverage of food consumption and in particular of protein as well as of the oil and feed markets

• Two supply functions (capture and aquaculture)
• Capture: either exogenous, endogenous but only affected by el Niño and endogenous but responding to price (13%)
• Aquaculture, 99% endogenous and responding to price of output and feed
• Fish meal and oil are composed by two components: from whole fish and from fish residue

• Demand is split to three end uses, food, fishmeal/fish oil and other uses (kept exogenous)
• Demand for fish meal and oil responds to the need of aquaculture, the own price and the price of the respecive oilseed products
• Imports and exports of fish are either exogenous or a function of domestic and world prices adjusted for tariffs and transport costs

• El nino will affect South American capture in 2010, 2015 and 2020.
• Fishing quota under-fill will be minimal.
• Aquaculture productivity gains will be smaller than in the previous decade.
• New feeding technics will not prevent increase in the ratio of fish to oilseed meal price.
• Japan fish and seafood production affected by tsunami in 2011 and gradually returning after.

OECD-FAO
Agricultural outlook 2011-2020

Agricultural outlook 2011-2020
• Agricultural commodity prices in real terms higher compared to 2001-2010.
• Production costs are rising and productivity growth is slowing (1.7% compared to 2.6%)
• Energy related costs and feed cost will continue to increase
• Resource pressures on water and land are increasing
• Need of further investments into productivity enhancements
• Per capita food consumption will expand most rapidly in Eastern Europe, Asia and Latin America, with highest increases for vegetable oils, sugar, meat and dairy products
• Trade is expected to grow by 2% per year, slower than the previous decade

TOTAL FISHERY PRODUCTION million tonnes
180
160
140
120
100
80
60
40
20
0
1990 1996 2002
Capture
2008
Aquaculture
2014 2020

Projections for capture fisheries million tonnes
100
Capture
80
60
40
20
0
1990
El nino
The share of fish reduced in fish meal will stabilize around 22%
1996 2002 2008 2014 2020

Capture fisheries
* Indicates excluding USA, China and EU27 respectively

Projections for aquaculture production
1 000 tonnes
90000
80000
70000
60000
50000
40000
30000
20000
10000
0
Trend

6
4
2
0
-2
Least-squares growth rate (%)
12
10
8
Aquaculture
Source: FAO
Capture
1981-1990
1991-2000
2001-2010
2011-2020

Aquaculture production
Total= 54.6 mt Total=72.4 mt
* Indicates excluding USA, China and EU27 respectively

Fish meal production million tonnes
8
5
4
3
7
6
2
1
0
1997 2000
From whole fish
2005
From fish residue
2010 2015 2020

Chile and Peru, fish meal million tonnes
8
7
6
5
4
3
Others
Chile
2
1
Peru
0
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020

160
140
120
100
80
60
40
20
0
2000
Source: FAO
Utilization in million tonnes
180 kg/capita
18.5
15
14.5
14
2020
16.5
16
15.5
18
17.5
17
2005 2010 2015
Fish for human consumption
Non-food uses of fish
Per capita fish supply

Fish for human consumption
(%)
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
1990 2000 2010 2020
From capture
From aquaculture
Source: FAO

Surpass in 2015 million tonnes
100
90
80
Total capture
70
60
50
40
Capture for food
Aquaculture
30
20
10
0
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020

World per capita fish consumption kg per capita
20
18
16
14
12
10
1992 1996 2000 2004 2008 2012 2016 2020

20
15
10
5
0 kg/capita
35
30
25
2008-2010
2018-2020
North
America
Latin
America
Europe Africa Asia Oceania World
Source: FAO

Trend in world trade of fish and fishery products million tonnes live weight
60
50
40
Trend
Imports excluding intra EU
30
20
10
0
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020

Rest of world
41%
Exports
USA
6%
China
20%
EU27
9%
Rest of world
33%
Norway
7%
Viet Nam
8%
Thailand
9%
Russian
Fed
5%
Thailand
6%
Imports
Japan
9%
EU27
23%
China
9%
USA
15%
Source: FAO

Share of 7 major exporters to increase
Total= 34.8 mt Total= 43.4 mt

Share of major importing countries to remain rather stable (about 68%)
Total= 34.1 mt
Total= 43.46 mt

Fish price projected to increase as prices of other commodities
Traded products

2009-2011=100
150
140
130
120
110
100
90
80
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Aquaculture
Fish, trade
Capture
Source: FAO

Source: FAO-OECD

2009-2011=100
150
140
130
120
110
100
90
80
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Fish oil
Fish meal
Source: FAO

• Projections indicate a continuous rise in demand for fish and fishery products, with growing trade and consumption
• Need to long-term resource conservation and effective management of resources as well as of aquaculture
• Differentiation of consumption, opening of new markets
• Risk of increase of costs of production due to stable production of fishmeal/fish oil
• Too high prices in the market will risk the effect of substitution with other emerging commodities

• Major increases will depend on aquaculture.
• Factors to influence future growth of aquaculture:
– costs/availability of feed for selected species; access and availability of areas/water
– environmental impacts
– availability of technology and finance
– effects on biodiversity
– climate changes
– governance
– food safety and traceability issues
• Capture: importance of implement more cautious and effective fisheries management

• Population/rural/urban
• Income
• Retail concentration in developed and developing which will affect demand
• Product development, technological innovation
• Continuous increase of trade
• Increased imports from developing countries
• Outsourcing of processing will continue
• Slow growth in per capita consumption

• obtaining better transport cost data
• obtaining more representative tariffs for the aggregated components
• obtaining or estimating FH food demand elasticities
• obtaining or estimating FHA supply elasticities
• identifying a better way to estimate value of capture fisheries

• Present the fish model to the OECD
Committee of Fisheries
• Ameliorate the fish model. Possible inclusion of the Fish Price Index in the
Fish model
• Establish a better collaboration with
OECD Fisheries
• Prepare a new run of the fish model and insert a new fish chapter in the OECD-
FAO Agricultural Outlook 2012-2021
• Final goal: inclusion of the Fish Model in the Aglink-CO.SI.MO. overall model

• Three major links exist:
– introduction of the FH consumer price in the food demand functions of
AGLINK/COSIMO
– the feed demand system
– the interaction between the FM and FL markets with their oilseed counterparts

• The Fishery and Aquaculture
Department of FAO is also investigating for the possible integration of a fisheries and aquaculture component in some of the already existing models as well as to look for other potential models of FAO and other institutions/organizations

• Fish to 2030 report, updating of Fish to 2020 (Delgado, et al. 2003)
• IMPACT model of the IFPRI
• Database prepared
• Modeling in development phase

• Review
• Long-term projections (30-40 years)of consumption and production of agricultural products and food, and of trends in world food security
• Recommandations by consultant to include fishery component in the studies

• Project run by the UK Government for
Science
• The project looks out to 2050 and take a global view of the food system, considering issues of demand, production and supply as well as broader environmental issues