Trade Wars and Impact on the Global Seafood Industry
Mr Gorjan Nikolik

Mr Gorjan Nikolik, Senior Analyst Seafood, Rabobank

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Figure 1: About Rabobank

Update on the Russian Trade Embargo

Figure 2: Russian salmon imports in volume

Norway and the EU were locked out by Russia which caused a huge loss in both volume and value.

Figure 3: Imports in value of all other seafood excluding salmon

The green colour shows Belarus increasing export to Russia. Belarus is a landlocked country so this is illegal but a loop of seafood transported from Europe to Belarus. Value of 300 Million USD.

Figure 4: Russian top 10 suppliers of seafood

Chile is number 1 now sourcing seafood to Russia. The Faroe Islands and Greenland are the only western countries exporting seafood to Russia (maybe because they are not members of NATO?) but both their volume has decreased.

Figure 5: Russia’s top 10 export regions of seafood

Russia is heavily focusing on China but, at the same time exporting nearly the same amount to Europe as before even though Russia is not allowing EU exporting to Russia. “Sounds like a good deal for Russia”.

Figure 6: Russian embargo update

The losers here are Norway and the EU. The major beneficiary here is the Russia domestic industry.

Update on Brexit

Figure 7: Brexit is coming

As you all know Mr Johnson is pro-Brexit.

Figure 8: The backstop

The EU and the UK won’t have the unilateral right to bring the backstop to an end.

Figure 9: Future of access to EU markets

This is what the negotiations are about. The EU wants to preserve the single market and the EU customs union. The compromise might be a Single Customs Territory between the EU and UK. But the three impossible trinities are impossible to combine.

Figure 10: EU and the UK are major trading partners in seafood products

These are the 2018 numbers where the white fish plays the main role in the trades between the countries and in both directions; 1.5 billion euros from EU to the UK and for 1.7 from the UK to EU.

Figure 11: UK exporters are highly depended on the EU

UK’s main seafood exports go to other EU-countries. In light of how much the volume has decreased between 2017 and 2018 UK companies should get hurry to find new markets before Brexit.

Figure 12: UK’s top 10 suppliers of seafood

The UK importers have begun to find other suppliers to shift into instead of the EU. The countries who benefit most are Iceland and Vietnam.

Figure 13: Important trade partners

Here is the same story but from the EU respective. The risk for the EU isn’t as great but significant.

Figure 14: EU27’s top 10 suppliers

EU exporters to the UK are losing the most at the moment.

Figure 15: EU-UK trade in light of Brexit

The trade from the UK to the EU and from the EU to the UK is declining even though the Brexit hasn’t happened yet.

Update on US-China Trade War

Figure 16: Increase in import tariffs

The most important here is that in May the US put 25% tariff on 200 billion trade from China and was going to put another 30% tariff in September, but it is suspended for now.

Figure 17: US-China seafood trade flows

US and China are not relying much on each other.

Figure 18: US-China trade

But the US seafood industry isn’t critically dependent on the China market, but some companies and states will be impacted, but mostly the reprocessing industry.

Figure 19: China-US trade

It’s the same story from China respective. US seafood isn’t very important on the China market or is the US seafood market important for the exporters in China. Some companies and states will be impacted, but it is mostly for reprocessing.

Figure 20: US exports to China per species group in value

If you look at the numbers for US exports to China, the products are dominated by the groundfish and salmon and mostly reprocessing who are exempt from tariffs.

Figure 21: China’s top 10 suppliers of seafood

China and Russia are clearly depending more and more on each other. At the same time, the US export to China is declining both in values and volumes.

Figure 22: China’s top 10 imports of US seafood

The interesting thing here is that the three topmost (red) products are all exempt from the tariff. Clearly the companies are processioning already for what could happen in the future.

Figure 23: Chinese exports to the US per species group in value

When looked at numbers of China export to the US, those numbers are much bigger than the US export to China.

Figure 24: US’s top 10 suppliers of seafood

The US top suppliers are Canada and China, both with slight declining numbers, mostly in the beneficiary for India, Chile and Vietnam.

Figure 25: A trade decline

It is expected that the declining numbers for the seafood exports from China to the US and vice versa will accelerate in the coming months.

Figure 26: US-China trade war

Most of the Chinese companies will find new domestic markets. The main winners are in South-East Asia, such as India, Vietnam, Indonesia and Thailand.

Figure 27: The most-traded protein, seafood, is under threat from trade wars

This is the global seafood trade flow. Rabobank has the most traded protein in the world. Clearly what is happening is that we have trade embargoes across the board, trade wars between the US and the EU, problems between South Core and Japan and so on. This is something we will need to monitor constantly from now on.