Firms in Sweden have sold about 200 tonnes of Baltic salmon in Europe despite an EU ban targeting toxic chemicals in fish.
Agreement Provides Entry of the AgriMarine System(TM) into the World’s Largest Salmon Producing Nation
AgriMarine Holdings Inc. (the “Company” or “AgriMarine”) the leader in clean aquaculture technology, is pleased to announce that it has entered into an agreement with the Ito-Yokado grocery retail chain for the supply of locally produced fresh Chinook salmon from AgriMarine’s closed containment freshwater farm in Benxi, China.
Previous harvests of Steelhead trout were sold through distributors to 5-star hotels and restaurants however the agreement with Ito-Yokado marks the Company’s debut into the retail market. On August 28th, AgriMarine’s salmon will be available initially at Ya Yun Cun Beijing Huatang Ito-Yokado with in-store promotions and marketing programs developed in cooperation with AgriMarine’s Beijing sales staff. These programs will involve the branding of the product as Chinese produced in pristine waters of the northeast regions. The Company plans to ramp up deliveries to supply all 15 Ito-Yokado retail stores in the near future.
AgriMarine is the only company that raises salmon in China with floating closed containment technology. Operational advantages inherent with the AgriMarine System™, including the ability to moderate seasonal temperature extremes, allow for the production of high quality salmon from reservoirs that can be sold fresh, within 24 hours of harvest. This is a major consumer advantage over the imported Atlantic salmon that is currently available in that country.
AgriMarine’s CEO Richard Buchanan said, “Ito-Yokado sees the opportunity to offer a salmon product with improved freshness over imports, to their customers in Beijing and they are launching our product in one of their largest stores in a high income community”. He added, “Securing this supply contract is a significant step for the Company. It provides protection against price fluctuations, brings significant sales and cash flow, and demonstrates our ability to deliver quality Pacific salmon at competitive prices.”
Ito-Yokado is a Japanese retailer, part of Seven & I Holdings Co. with 174 Ito-Yokado stores operating in Japan. The group has quickly expanded in China since 1997, where the company now operates 10 stores in Beijing, 5 stores in Chengdu, Seven-Eleven, Seven & I Restaurants, and plans for further expansion throughout China.
About AgriMarine Holdings Inc.
Canadian-based AgriMarine is an aquaculture technology company engaged in the development, commercialization, sales and licensing of proprietary floating solid-wall closed containment tank systems for salmon and finfish farming. The Company’s clean technology is demonstrating economic and sustainability advantages in its own farms in Canada and China, as well as commercial scalability for hatchery and full grow-out applications. The AgriMarine System™ creates an optimal fish rearing environment, addresses sustainability issues in finfish aquaculture and can be applied worldwide in a variety of water bodies and climates.
Rising price of oily fish after storms off Peru will lead to spike in Scottish farmed fish, Chinese pigs and Omega 3 tablets
“If you like anchovies on your pizza you’d better be careful,” warns Mark Livingston, investment director of Fidelity Worldwide Investment.
You would not expect the head of a global asset fund managing £138bn of pensions and investments to care about the cost of pizza toppings. But the global nature of the food chain means severe storms off the coast of Peru have led to a dramatic jump in the price of the oily fish – which will in turn lead to a spike in Scottish farmed fish, Chinese pigs and even Omega 3 tablets in Holland & Barratt.
“That’s the nature of today’s food business – everything’s connected,” Livingston says. “If you can catch some anchovies you’ll make some serious money.”
And that’s why Livingston cares about this silvery-coloured fish. Three years ago Fidelity spotted the growing importance of the “forgotten fish” and invested in Copeinca, a Norwegian company that owns a fleet of 30 Peruvian anchovy fishing boats and five processing plants across the country.
Just a few years ago no one outside of the fish oil industry really paid much attention to anchovies and they were lumped together with other unloved fish under the unappetising label “industrial fish”.
“It covers all the stuff we don’t consume directly. We caught 18m tonnes of industrial fish last year, which represents 20% of all fish caught worldwide,” says Gorjan Nikolik, associate director of animal protein at Rabobank.
These fish are caught in massive quantities, dried, minced and ground down into fish meal [a brown powder made mostly from fish bones and fish offal] and fish oil [which is extracted from the tissues of oily fish].
“After two years of declining prices, fish meal and fish oil are becoming expensive again. And people are now paying attention,” says Nikolik from his office in Utrecht, the Netherlands’ fourth city.
He says the price of fish oil has increased from $1,500 (£950) a tonne at the beginning of the year to $2,000 per tonne this month; fish meal has jumped from $1,300 a tonne to a record $1,700.
The price is rising due to the growth in farmed fish [mostly salmon and prawns], which feed on them, and the substitition of fish meal as animal feed because corn has become too expensive: the corn price has hit a record high as a result of the severe drought in the US.
Fish oil has soared even further because a new consumer has emerged: humans. “Direct consumption in the form of Omega 3 pills has increased to 14% [of the global fish oil production] from 2%-3% five years ago,” says Nikolik.
Peruvian anchovy fishermen – and their investors – are the biggest beneficiary of the fish oil spike because, Livingston says, “the Peruvian anchovy is the best fish in the world to produce fish oil as they have the most calories”.
The anchovy price [which is not available separately but calculated from the fish oil price] has increased still further because since 2009 the Peruvian government has imposed quotas on the number of anchovies that can be caught in their waters. “They’ve limited the supply, which will all know lifts the price.”
Additionally, unusually severe Pacific storms have made anchovies much harder to catch. “The strange weather patterns have made the sea more turbulent and less people are willing to go out into the sea – which increases the cost of fishing.”
“And on top of that,” Livingston adds pausing for breath. “There’s this push into organic fertiliser.” Fish meal will pass an approved organic feed, as consumers increasingly demand food that hasn’t been plied with chemical fertiliser.
In any ordinary year the soaring price of fish oil and meal should force up salmon prices, Nikolik says. But this is no ordinary year. This year salmon have been hungry.
“In 2012 the water temperature has been a couple of degrees warmer in the north Atlantic than normal. This has had a big affect on the appetite of salmon, which has led to a record growth rate.”
Norway, the world’s biggest salmon farmer ahead of Chile and Scotland, only expected a 5% increase in the salmon crop this year but global salmon production is already up 30% in the first half of the year. Chile’s salmon fisheries are also recovering from a disease that forced them to kill 75% of the stock two years ago.
“This has led to a dramatic price drop of 35-40%,” he says. “Last year salmon was changing hands at 38-43 Norwegian kroner per kilo, it’s crashed to 25 kroner.”
Nikolik says the salmon industry has not been subject to such a steep price change since the fish farming industry took off in the 1970s and 80s.
The price collapse has translated into cheaper prices and promotions in supermarkets across the world.
“It is a great deal for consumers and producers,” he says. “The prices are so low that new people are trying salmon – and if they get hooked producers will have new customers. It’s like a year-long special promotion.”
Nikolik says prices have been so depressed that even hard-pressed consumers have taken to eating more of a once exclusively upmarket fish. European salmon consumption in the first half of the year is up to 419,00 tonnes from 342,000 tonnes last year. “We’ve seen growth in Portugal, Greece, Spain – places where you would expect recession to have reduced demand.”
The fast-developing Bric nations are also increasingly keen on salmon. Industry figures show Russian salmon consumption is up 67% to 75,000 tonnes in the first six months of the year, while Latin Amercia (particularly Brazil) is up 85%, even China which does not have a tradition of eating fish fillets has seen salmon consumption rise by 34%.
While salmon is leaping, its more down-to-earth cousin mackerel is plunging. A diplomatic dispute between Iceland and the Faroe islands against the EU, Ireland and Norway has led to severe overfishing of north Atlantic mackerel stocks.
Simon Coveney, Ireland’s agriculture minister, has accused Iceland of making a “financial killing” from fishing mackerel in defiance of a EU-agreed quota.
Iceland claims that rising sea temperatures have led to a “dramatic change” in mackerel’s migration route into its territorial waters. “We’ve seen 1.1m tonnes of mackerel in Icelandic waters in 2012, 2011 and 2010, compared to very little in 2006 and 2005,” says Friirik Arngrímsson, head of the Federation of Icelandic Fishing Vessel Owners. “The mackerel is feeding here and increasing its weight here – we have a right to fish our mackerel.”
The International Council for the Exploration of the Sea (Ices), which advises governments on fish quotas, has counselled landing not more than 630,000 tonnes of mackerel. Iceland says the EU and Norway have allocated themselves 90% of that catch.
“That leaves 10% to Iceland, the Faroes and Russia – that’s not a fair share,” argues Arngrímsson. “We cannot accept that the EU can decide whether or not we should fish mackerel. They have claimed that it is their fish, but it is also our fish.”
While Arngrímsson admits that until recently Iceland regarded mackerel as only a bycatch to herring, he strongly refutes the suggestion that Iceland has only started to bother catching mackerel since its financial system went into meltdown in 2008. “There is absolutely no link between the Icelandic banks and the mackerel. It is just a coincidence that the mackerel has migrated into Icelandic waters.”
Back on dry land, drought in the US has wiped out 45% of the corn and 35% of the soya bean crop in the worst harvest since 1988. As well as leading to the soaring price of those commodities [corn is up 64% since June] it has also caused a spike in all other cereals and animal feeds, including wheat, hay and fish meal [which is increasingly used to feed China's growing demand for pork].
Many cattle farmers are no longer able to afford to feed their cows and the US herd has shrunk to its smallest since 1973. Cattle prices have risen by 8.5% to $1.35 a pound.
Fast-food chain Wendy’s has already warned it will be forced to raise the price of burgers. The real losers will be the world’s poorest. “If the current food price rises continue it will lead to food inflation, which will be very bad for poor countries,” says Livingston. “It doesn’t matter where prices are rising, it is always the poorest people that suffer most because food makes up a much bigger part of their outgoings. We can afford to absorb the rise … “
He warns that if prices keep going up it will become a food crisis that could match the severity of the 2008 food riots that helped spark the Arab spring.
While most dread the repeat of such a crisis some of the multimillionaires that control the global food market are anticipating the opportunity to make vast profits.
The head of Glencore’s food trading business this week said the food crisis would be “good” for business.
Chris Mahoney, the trader’s director of agricultural products, who owns about £500m of Glencore shares, said: “The environment is a good one. High prices, lots of volatility, a lot of dislocation, tightness, a lot of arbitrage [the purchase and sale of an asset in order to profit from price differences in different markets] opportunities.
“We will be able to provide the world with solutions… and that should also be good for Glencore.”
Orange juice prices surged 14% this week as a tropical storm is expected to strike Florida, the world’s second-biggest producer after Brazil.
The price of orange juice, which has this year swung from record highs of $2.2 a pound to near-record lows, hit $1.40 this week as tropical storm Isaac was heading directly for the southern US state.
However, Judith Ganes-Chase, president of J. Ganes Consulting, a commodity trading company, warned that the price will fall again as there is falling demand.
Tea prices are also on the up, with some varieties soaring by more than 40% so far this year. William Gorman, chairman of the UK Tea Council, said strong demand from India and China was causing the surge. Climate change is alsoharming some previously excellent tea growing regions.