Despite what seems to be almost weekly reports asserting that the world’s oceans are already or soon be will barren and contain no stocks of fish, Scotland’s fishermen seem to have remarkably little difficulty in continuing to catch and land superb quality fish. 

White Fish and Shellfish
Demand for fish has remained relatively buoyant throughout the recent recessionary period.  Sales in the UK have been maintained, and whilst the prices paid in some foreign markets have fallen back slightly, the volume of sales of shellfish and other prime species such as megrim and monkfish appear to be unaffected by the economic difficulties reported in Italy and Spain.  They may be facing difficult economic times, but they seem to be determined to continue eating the best fish and shellfish available.

Landings of the major species in the first half of 2010 comfortably outstrip those achieved in the corresponding period of 2009. Landings of North Sea cod are up by 35% to 7,700 tonnes, while North Sea haddock landings are up to 12,500 tonnes.  The vital langoustine catch is up to over 9,500 tonnes and continues to earn valuable export revenue, whilst landings of plaice and sole have also shown significant increases.  The question now confronting industry is whether these fisheries can last until the end of the year, given the constraints imposed by the Total Allowable Catches set by the European Council of Ministers last December.

North Sea
The catching sector is not just restrained by limits on what they can catch, but also face restrictions on the amount of time they can spend at sea.  This year the amount of time Scottish vessels can spend fishing in the North Sea is some 10% less than last year and most white fish vessels are restricted to 120 days for the entire year.  Some vessels are now approaching that target and will have to tie up.  This will impact on the volume of deliveries to the market, and processors are particularly concerned about shortages of supply as the year end approaches, which is traditionally one of the best times in the year for selling fish. 

Discussions are currently taking place between the catchers and processors in an attempt to avoid any disruption to supplies. 

However, it is hoped that a “pot of days” made available to the catching sector in the North Sea through the Conservation Credits Group will be sufficient to see operations through till the end of the year. 

Processors are also having difficulties maintaining a steady flow of product when landings at Peterhead can be <1100 one day and >6000 the next.  This also impacts on the return to fishermen.  It has been suggested by many processors that the POs need to take a long, hard look at restructuring landings, to help fishermen maximise profits from their landings.  Two short closed landing periods in the year (in September and March) have also been suggested to help eke out quota. September is traditionally a poor month for prices as the market is flooded with Icelandic fish.  What is important is that all parties need to work together because the fishermen and processors are interdependent on each other for their future, yet currently work poles apart. 

There are also concerns that the level of effort being expended by the shellfish sector in the North Sea will need to be restrained before the end of the year.  As this segment of the fleet contains many of the smaller vessels, its activities are more prone to disruption by the weather, so a poor autumn could see a resolution of the potential problem.

West Coast Fisheries
Activities on the West Coast of Scotland have been severely restricted by quota cuts in the current year.  With the exception of haddock, landings of virtually every other species have fallen as a result of quota cuts imposed at the start of the year.

Pelagic
Secondary pelagic processors continue to find difficulty in the retail markets due to the downward pressures on all prices.

Herring
The pelagic industry is gearing up for the start of the North Sea herring fishery in August, now that the 2^nd annual audit for MSC certification of the Scottish Pelagic Sustainability Group (SPSG) North Sea Herring stock has gone to plan.  The audit report can be viewed on http://www.msc.org/track-a-fishery/certified/north-east-atlantic/spsg-north-sea-herring/assessment-downloads.  

The stock assessment for North Sea herring has been revised upwards from 900,000 tons to 1.3 million tons, leading to pressure for an increase in this year’s quota.  Part of the argument is that in the mid 90s when the assessment was revised downwards, the industry volunteered a 50% reduction.  At the moment this plea seems to be falling on deaf ears, but pressure is being applied through the Pelagic RAC.  Most of the focus is on next year’s management measures, as any increase must first be agreed with the EU Scientific, Technical and Economic Committee of Fisheries (STECF) and also with Norway, as the stock is jointly fished. This process is unlikely to be completed before the end of 2010.

The Maatjes herring fishery from the North Sea is now finished. High demand for this product from Dutch processors has meant that Norwegian vessels have used quota in this market.  This has led to fewer fish for Scottish processors, which have traditionally relied on Norwegian landings at this time of year. 

Volume is essential to keeping primary processing plants viable, so loss of tonnage is a major concern. If the Scottish fleet also loses mackerel quota, this will add to the problem.

It is now almost impossible to sell West of Scotland herring into the main western European markets because it is not MSC certified.  The weak condition of this herring stock mitigates against a favourable MSC assessment at present, but SPSG hopes that the situation may change within the next few years.  It is encouraging that although the stock is at a low level, it is stable, and mortality has reduced since a long term management plan was introduced in 2008. 

Mackerel
On the mackerel front there is an ongoing dispute over quota with Iceland, which has set itself a large TAC of 130,000 tonnes.  Traditionally Iceland has only had minor catches of mackerel.  This action has brought the country into conflict with the EU and Norway, and the EU Commission has promised to stand firm against them, warning that they are endangering the current management of mackerel stocks.   The current total allowable catch ( TAC) is 572,000, the majority of which is shared between the EU and Norway. 

There is real concern in industry that if no progress is made in the negotiating process, then SPSG could lose its MSC certification for mackerel or face severe cuts in quota.  Loss of MSC certification would have a major impact on mackerel sales.   The certificate was awarded in January 2009 and a new condition states that no more fish should be taken out of the stock than the scientific advice allows.  If Iceland goes ahead with its plans, the combined fisheries will exceed that advice.  Industry is actively lobbying at the highest level for a resolution to the dispute. 

The Faroese had also talked of setting a similar high quota, but recently settled on a preliminary 14,000 tonnes.  It is believed that this precautionary level is directly linked to a recent objection by the Scottish Government (supported by the Scottish pelagic industry, the Pelagic RAC and Norway), to the MSC certification of the Faroese Pelagic Organisation (FPO) North East Atlantic mackerel stocks.

At least 4000 tons of mackerel from Iceland has been shipped into Russia.  Quality is said to be poor, but nevertheless the concern is that the market could be softened by the additional quantities.

UK Salmon Market
In the period ending 30^th June 2010 the value of the fresh salmon market increased year on year by 4% to £495m, and in the 12 week period by 1% to £114m. The average selling price per kilo increased by 5% to £15.68p per kilo and by the same amount in the 12 week period to £15.68p per kilo. This increase was not matched in volume terms, with the year on year market flat at 31,602 tonnes. 

In the Multiple Sector, year on year value was up 4% and volume down 1%, while in the past 12 weeks value was flat and volume down 5%

When taken against the total chilled fish market, this was a disappointing performance for salmon, as the chilled fish market increased year on year by 4.8% in value and 5.2% in volume.  However, salmon supplies have been restricted in the UK and this has driven up the ex factory prices.  An ongoing disease/supply situation in Chile has opened new doors for exporting to the USA, which many Scottish suppliers have tapped into.

Prices in July to dates have been- delivered Glasgow:

                                                                  Last Year
2 – 3kg             £4.30kg                                 £3.50kg                         + 22.8%
3 – 4kg             £4.80kg                                 £4.00kg                         + 20.0%
4 – 5kg             £5.00kg                                 £4.30kg                         + 16.2%
5 – 6kg             £5.20kg                                 £4.50kg                         + 15.5%

As a result of the limited supply situation, promotional activity has been reduced and the full extent of increased prices has yet to be fully passed on to consumers.  However, this is expected to have an adverse effect on sales.

While salmon remains the number one species in volume terms, there is concern that sales are not matching the overall market performance. The farming sector however is very satisfied with the returns they have receiving, although they are now (mid July) beginning to come under price pressure.

The forecast is for more fish to be harvested in August, September and October, ready for the Christmas smoking market, with cutbacks in November and December.  In general, harvest sizes have been bigger this year, as farmers gear up to supply the demand in the US for large fish. 

Increased price levels are likely to be sustained for the foreseeable future, which presents an opening for whitefish processors to substitute supply.  This should be seen as a real opportunity for the sector.  

NH.21.07.10
Contributors:  Iain MacSween, Will Clark, Iain McFadden, Ian Gatt, Jim Gourley