The slowdown in the growth of fish supplies that started in 1997-1998 is likely to continue for a few years. The main reasons for this are the stable or decreased landings from marine capture fisheries and a slower rate of growth in aquaculture production than that recorded for the early 1990s. The negative impact of El Niño on capture fish production was already evident in 1997. In 1998, landings are likely to have declined even further, and production is expected to take some time to recover. Supplies - particularly those from aquaculture - will be affected by a drop in demand over the next two to four years, particularly in Japan and in other Asian economies. The production of high-value aquaculture products will stagnate, as will international trade in those products.
The State of World Fisheries and Agriculture 1996 predicted increasing real prices for fish2 over the next 15 years. This projection was based on exploratory calculations of supply and demand for fish in the year 2010, using data from 1992.
A review of these projections in 1998 shows that the pressure for increased real prices for fish in the coming decade is decreasing. It seems clear that demand will not grow as rapidly as foreseen in mid-1995, while supply has been increasing more rapidly than expected and, after a few years of relative stagnation, may resume growth in the early years of 2000-2010. The slowdown in demand is due to a slower population growth rate than that predicted, projections of slower economic growth and, possibly, the increased competitiveness of poultry and pork.
Supply projections for fish have improved mainly on the strength of the continued and rapid expansion of aquaculture production but also because improved capture fisheries management means there is less likely to be a decline in capture fisheries production.
The growth rate of world agricultural production is slowing down. From an anuual rate of about 3 percent in the 1960s, it dropped to about 1.6 percent during the decade 1986-1995 (mainly because of the drastic production decline in countries formerly comprising the USSR) and is expected to be in the order of 1.8 percent for the period 1990-2010. Furthermore, since the 1950s, the average real price of agricultural products has declined globally.
A different situation is true for the fisheries sector, as both production and real prices have increased over the past three decades. Production increased at a compound rate of 3.4 percent per year in the period 1960-1990, and this growth rate has been maintained over the past decade. During the last 15 years, this growth has essentially been a result of the rapid increase in aquaculture output, which recorded an annual increase of 11.8 percent in the period 1984-1996. Although information on prices is weak, indications are that prices have increased somewhat in real terms. This has occurred in parallel with a slow increase in per caput supplies, supporting the idea that fish generally falls into the category of preferred food items along with other livestock products, in particular poultry and pork.
Thirty to 40 years ago, developing countries as a group were significant net exporters of food. The situation has since changed and, by early next century, developing countries as a group can be expected to become net importers of food. For the poorest of these countries - most of which are found in sub-Saharan Africa and South Asia - the financing of food imports will be a high priority, and capture fisheries and aquaculture will come under strong pressure to provide exportable products.
The future demand for fish will basically be determined by the number of consumers and their eating habits and disposable income as well as by prices of fish.
The economic and financial crisis that has engulfed Asia and is also being felt in other parts of the world has led to a downward revision of economic growth projections for most Asian countries as well as for a growing number of countries elsewhere. In fact, some of the larger Asian economies are expected to contract over the next two to three years. An unavoidable consequence in the immediate future will be a reduction in the demand for fish in Japan and in emerging Asian economies, and fish exports to the latter will most probably decrease in volume. At the same time, the fisheries sectors of developed Asian economies will face increasingly stiff competition from developing economies whose currencies have undergone devaluations.
In Africa and Latin America, too, consumers will experience stagnation and, in some cases, a decline in their disposable income. This will reduce demand for fish and fishery products. However, the decline will be small in absolute terms, as consumption is relatively modest at present. Consumption in North America is sensitive to economic growth and, even with a degree of growth in disposable income, there may be room for some expansion in the immediate future - at least in quantity terms. European demand will not change much under the predicted slow economic growth scenario.
Projections of demand made by FAO in 1995 for the year 2010 assumed that economic growth would have only a slight influence on the per caput consumption of fish in Africa, Europe, Latin America and Oceania; in Africa because of slow - or zero - per caput growth, and elsewhere because changes in income were not seen to have a major influence on demand. For Asia and North America, the assumptions were different. The average per caput consumption had been projected to grow considerably owing to expected growth in disposable income. By late 1998, there was still no global consensus on when the economic fortunes of Asia would improve. However, for the purpose of developing a supply and demand scenario for the year 2010, it is assumed that growth will resume early in the next decade.
In the first few years of the next century, the demand for fish in Europe and North America is likely to shift downwards as competing livestock products - particularly poultry and pork - become significantly cheaper. This is expected to come about as a consequence of projected modifications to the European Community's (EC) Common Agricultural Policy (CAP). The modifications are aimed, inter alia, at reducing grain prices and subsequent livestock production costs. Given that poultry and, in some areas, pork are preferred food products, it seems likely that consumers in Europe and North America will eat less fish than they would have done in the absence of a modified CAP. This shift in consumer demand will occur gradually after the year 2000.
In October 1996, the UN projected that the world's population in the year 2010 would be about 140 million (i.e. 2 percent) less than it had predicted two years earlier. This downward revision is the consequence of lower population growth rates, particularly for Asia which accounts for a reduction of about 100 million in the revised projections. In brief, the effect of a slower population growth in the short term will be a decline in demand for high-priced aquatic products, although some of this demand may be shifted to lower-priced fish products.
It also seems prudent to revise downwards the medium-term projections of world demand for food fish. Based on a scenario of modest reductions in the per caput demand in Europe (down by 6 percent compared with 1995), North America (-4 percent) and Asia (-8 percent), and incorporating the effect of a smaller population, the demand for food fish in 2010 may be 105 million to 110 million tonnes (live weight equivalent), whereas FAO's 1995 prediction was 110 million to 120 million tonnes.
The supply of cultured finfish, crustaceans and molluscs has continued to expand rapidly, and growth has been much faster than was envisaged only a few years ago (Figure 43). Asia continues to dominate production, with its growing share in total world output reaching 55 percent (in volume terms) in 1996, up from 51 percent in 1994. Within Asia, China is by far the largest producer; in volume terms, its finfish production accounted for a major share of the world total. Almost all of China's production is for domestic consumption, however. In terms of export revenue, the culture of penaeid shrimps is the most important aquaculture activity in Asia, with shrimps accounting for 26 percent of the value of the region's fish exports in 1996.3
Chinese aquaculture production started to increase rapidly in the mid-1980s in response to very precise policy measures intended to stimulate production. Households were given the authority to manage their own aquaculture activities, prices for high-value aquaculture species were freed and the government supported farmers through research and extension. It is generally believed that production will continue to increase, although in some parts of the country it will change in nature as farmers attempt to generate more value-added products from their plants - possibly by selecting more expensive species. In the northern and inner parts of China, production will probably increase mainly through the expansion of carp culture.
There are several reasons why Chinese aquaculture should be able to withstand the present slowdown in the world economy. First, since consumption is predominantly domestic, exports play a relatively small role and hence the sector is little affected by world market forces. Furthermore, consumption patterns observed during the recent period of economic growth indicate that fish (and livestock) products are strongly preferred food items. Technologically, Chinese aquaculture activities are self-reliant and use few imported inputs. Although the country has become a major importer of fishmeal, a share of which is used in aquaculture, access to imported fishmeal is not likely to be an obstacle for the bulk of Chinese aquaculture in the medium term. It is most likely, therefore, that Chinese aquaculture production will continue to grow in volume and that the culture of higher-priced marine products will also develop.
Culture provides more than 90 percent of the world's carp supplies and carp account for about 14 percent of all finfish produced by both culture and capture fisheries. China produces more than four-fifths of this amount. In China, as is the case elsewhere, carp is consumed locally. With a few exceptions, producers of Chinese and major Indian carps have been unable to find markets outside Asia. In fact, carps as a group are not traded globally to the same extent as shrimps and salmon.
Carp culture in China, but also in India and countries of the CIS, will probably continue to increase steadily - at least in the near future - in response to population growth. In the long term, a substantial increase in the culture of Chinese and major Indian carps will depend on the development of carp products for which there is a demand in world markets.
Among the finfish produced in aquaculture, tilapias seem to be assured a future owing to their specific production characteristics. First, there are several different culture technologies available for these species, some of which permit farmers to produce tilapia at a relatively low cost. Second, the flesh of tilapia is generally white and can be used to produce white fish fillets, one of the basic products in the international fish trade. Third, tilapia has spread outside Africa and is common in Asia, Latin America and the Caribbean.
Tilapia has an established and rapidly expanding market in the United States and is also being sold in Japan and in European countries. World cultured production has risen steadily (at an average annual rate of 12 percent4) for the past 12 years (Figure 44). The expansion of tilapia production can be expected to continue for the following reasons:
These arguments apply not only to the present major tilapia producers in Asia but also to prospective producers in Africa, where production may expand rapidly if conducive macroeconomic environments prevail. Furthermore, both developed and developing economies will provide markets for tilapia and its products. In 1996, tilapia accounted for about 5 percent of all cultured finfish; this share is very likely to increase significantly over the next ten years.
The culture of salmon and trout is mostly carried out in Europe and in the Americas. The volume of cultured salmons and trout is now catching up with landings of these fish in capture fisheries, although the rate of expansion in farmed production is slowing down. The industry is advanced, both technologically and commercially, and in many countries is making systematic efforts to open new markets and stimulate further demand in existing ones. Production costs are likely to be further reduced and the industry is also likely to develop different products for new markets. Consequently, there is likely to be a continued expansion of production.
Shrimps are an important source of income and hard currency in many developing economies; they are less significant as a source of food. The total volume of cultured penaeid shrimps is now close to half that produced by capture fishers. In volume terms, the increase in production is tapering off in Asia and Latin America, while production in Africa - although still small - is expanding fast.
There are, however, reasons to believe that growth in the immediate future will slow down significantly and might even come to a halt. The main reason is the short-term prospect of no economic growth occurring in Japan, the world's largest market for shrimps, as well as the slow economic growth expected in the other developed economies. In addition, management of shrimp culture is not at a uniformly high level. Production from areas that have recovered from disease is invariably offset by losses resulting from disease problems affecting other areas - a pattern that is not likely to change for some time. Furthermore, the emergence of stringent environmental regulations will slow down the expansion of shrimp culture, although production should recover and output should start to expand significantly early in the period 2000-2010.
Mollusc culture is almost always destined for sale, and culture for household needs is very rare. A large part of molluscs are sold to markets located near to the place of production. However, some producers such as Canada, New Zealand and Spain depend on international markets, and international trade in mollusc products is in fact growing. Nevertheless, for mollusc culture - as is also true for carp culture - the economic conditions within the producer country are an important factor. On the whole, it seems that mollusc culture in Asia will not be affected much by the present economic downturn and will continue as a source of growth in aquaculture production.
In the near future, the present economic crisis will probably curb the rate of growth in aquaculture worldwide. This is in line with already established trends - excluding those relating to China. Asian production will grow moderately for products consumed in internal markets, which absorb the bulk of the output volume. The projected stagnation - and even decline - of certain aquaculture products that are traditionally exported to developed economies will effect the value of global aquaculture production much more than its volume.
Judging from the situation at the end of 1998, aquaculture seems more than likely to show sustained growth in the medium term. In the light of previous studies5 and recent trends, it seems quite probable that total world aquaculture production will have reached between 35 million and 40 million tonnes of finfish, crustaceans and molluscs in the year 2010.
Global capture fisheries production in 1996 was slightly greater (+1.6 million tonnes) than in 1995. The preliminary estimates for 1997 are for a contraction of about 0.9 million tonnes (Table 1), mainly owing to the decline in stocks of small pelagic species off the west coast of South America (see Box 15, El Niño: the consequences for fisheries). Between 3 and 5 percent of the reduction in global landings by marine capture fishers can be attributed to the El Niño phenomenon.
However, since most of the reduction will be absorbed by the fishmeal industry, supplies for human consumption are expected to have increased by more than 3 million tonnes in 1997, which means that the average per caput supply (including aquaculture) would have risen to a new maximum of about 16 kg. This peak would not have been reached had it not been for the sharp rise in reported Chinese fish production. The world's capture fishery production has probably contracted further in 1998 owing to the ongoing effects of El Niño.
The expansion of fishing capacity, as measured by number of vessels and fishers, slowed during the first part of the 1990s (see the section Fishers and fishing fleets). The change was most noticeable in Asia, with the exception of China where fishing capacity recorded a sharp increase in the same period. There are several plausible reasons for a slowdown in the buildup of fishing capacity in Asia, the most significant being: employment opportunities generated outside fisheries and agriculture by past economic growth; the general realization that available wild stocks in Asia are being reduced through overfishing; and governments' efforts to provide appropriate management frameworks for capture fisheries (see the section National fisheries governance).
The present economic crisis might possibly lead to fisheries again becoming a source of employment for those without work as well as the logical source of livelihood for young members of fishing communities. If the economic crisis persists over the coming years, managers and management structures will come under increasing pressure to allow and facilitate an expansion of fishing capacity. It is also possible that, after giving a small initial boost to production, such expansion will result in reduced capture fishery landings for developing economies by 2010.
In the developed economies, fisheries governance should improve, making it easier to maintain stocks at a level that permits the maximum sustainable yield (MSY) to be harvested. Furthermore, better fisheries management (a direct result of improved governance) will be supported by technological developments (Box 16, Telecommunications: benefits for capture fisheries). In some developed economies, cheap fish imports are likely to contribute to a reduction in fishing effort. These imports will originate in developing economies whose currencies are losing value vis-à-vis those of OECD countries. However, by 2010, better management should have resulted in economically sounder fisheries and improved catch levels in most developed economies. This may lead to strong pressure from national industries for the application of trade measures to control fish imports. On the other hand, several countries are making a parallel effort to promote freer trade in fish and fishery products (Box 17, Agreements regulating international fish trade).
Diverging trends in inland capture fisheries are evident for the different regions. With regard to food fisheries, the rapid expansion in Asia is likely to continue, while growth in other regions is expected to be slower. In the CIS and the Baltic states, this is because of political and economic difficulties; in Latin America because of a lack of demand; and in Africa because of financial, administrative and logistical difficulties. Recreational fisheries are gaining importance mainly, but not exclusively, in North America and Europe. In most regions, the practice of stock enhancement will continue and probably become more widespread. In all regions, inland fisheries yields are being negatively affected by environmental degradation, with Europe and North America also having experienced significant negative impacts in the past.
In conclusion, by about 2010, there should be a slight increase in capture fisheries production as fisheries in developed economies exploit recovered stocks in a more sustainable manner and make increased use of small pelagics, both for human consumption and reduction to fishmeal. The use of small pelagics should be facilitated by advances in electronic technology and artificial intelligence systems that enable the size and species of fish targets to be identified using echo-sounders and sonars. Such systems, which establish more accurately the probabilities and confidence limits of species, will allow skippers to assess their expected catch, by-catch and discards as well as to estimate the profitability of fishing in a particular area before deploying their fishing gear. Ultimately, this increased efficiency should also reduce wastage.
Thus, for 2010, it is not unreasonable to estimate a modest increase in landings from inland and marine capture fisheries to between 95 million and 100 million tonnes.
During the 1990s about 30 million tonnes of total finfish supplies have been converted annually into fishmeal and fish oil. In 1997/98, reduced supplies were mainly a consequence of difficulties in obtaining the raw material. The present downturn in the world economy will reduce growth of the livestock sector (a main user of fishmeal), and the production of fishmeal could well fall below the present level for some years. Early in the period 2000-2010, European livestock producers will probably increase their use of grains slightly, as real grain prices are expected to fall. Fishmeal and fish oil production is likely to recover when stocks of small pelagics again become plentiful off the west coast of South America and fishmeal prices regain competitiveness. In the medium term, it is assumed that about 30 million tonnes of fish will continue to be converted into fishmeal and fish oil.
Total fish supplies will probably remain below or at the level of 125 million tonnes for the next three to four years and then increase towards the end of the period 2000-2010. At that time, supplies may be in the order of 135 million tonnes, of which 105 million tonnes would be available as food fish and the remaining 30 million tonnes for the production of fishmeal and fish oil.
It is clear that both supply and demand in capture fisheries will remain stagnant in the near future. On the supply side, a low availability of major pelagic stocks is exerting a negative influence. Also in the near future, some export-oriented aquaculture industries will reduce their production in response to weak markets.
The medium-term prospects are somewhat better for both supply and demand. Total demand for capture fisheries was estimated to be between 105 million and 110 million tonnes in 2010. As supplies are estimated to be 105 million tonnes, the demand-induced upward pressure on prices will be weak, especially since the world population is not expected to top 7 billion by 2010. A supply of 105 million tonnes of fish in that year would in fact imply the stagnation of per caput supplies at about 15 kg per year.
This scenario is dependent on several crucial assumptions, with the main one hinging on developments in the world economy. The basic assumption is that the present economic crisis will continue into the next century and will also affect the more developed economies. Technology is another important factor: while it has been assumed that capture fisheries - particularly in developed economies - will benefit from developments in modern communications and electronic technologies, no similar assumption has been made for aquaculture. This may be unduly pessimistic. For example, genetic improvements in salmon, tilapia, catfish, carp and oysters have already been successful in raising production, and work in this area is likely to continue to yield positive results. Furthermore, on-farm management should improve, in both the areas of business and technology. It is not inconceivable, therefore, that the developments in aquaculture technologies will allow production to have increased further by 2010 even without the stimulus of higher real prices.
1 Main contributor: U. Wijkström, FAO Fisheries Department.
2 Including finfish, crustaceans and molluscs.
3 Including intra-Asian trade.
4 Tilapias and other cichlids as a group.
5 J.F. Muir. 1995. Aquaculture development trends: perspectives for food security. Paper presented at the Government of Japan/FAO International Conference on Sustainable Contribution of Fisheries to Food Security, Kyoto, Japan, 4-9 December 1995; and FAO. 1997. Review of the state of world aquaculture. FAO Fisheries Circular No. 886, Rev. 1. Rome.