More squid catches lead to positive market environment

After many years of low catches, 2006 has been a positive year for squid production, especially in the South West Atlantic. As a result, imports in all main importing countries were up with regard to 2005. Prices went down in the first half of the year, and have recovered somewhat in the second half of the year. First indications for squid production during the 2007 catch season in the South West Atlantic are positive, and the price trend is downwards.


China main player in squid business

China is a main importer of squid worldwide, most of which goes into the re-processing industry for export to the Japanese market. In the first eleven months of 2006, some 260 000 tonnes were imported into China, which is 53% more than the corresponding 2005 figure. China also changed countries of origin for its squid imports. While in 2005, the main suppliers were the two Koreas, in 2006, Peru and the USA sent significant quantities of squid to China. Exports from both countries more than doubled in 2006. The increase of Argentine squid exports reflects higher transhipments of squid caught by Chinese vessels in Argentine waters in 2006.

Chinese exports of squid did not reflect the huge increases in imports. They grew only slightly by 15%, which means that an important part of the imports stayed inside China. It is interesting to note that while imports of Chinese re-processed squid into Japan declined in 2006, the USA reported strong increases.

The value addition by the Chinese processing industry becomes clear when looking at the value of trade and the trade balance. In 2005, total imports of frozen squid were US$ 166 million, while exports were in the range of US$ 220 million, a net value addition of US$ 60 million.

In the first eleven months of 2006, however, the export value (US$ 215 million) was US$ 4 million short of the total imports: the end of the Chinese squid re-processing industry? Probably not, as Chinese exporters were awaiting better demand in the Japanese market, which normally is during the Year End festivities. Nevertheless the unit value of squid exports from China declined sharply in 2006, US$ 2.15/kg, down from US$ 2.45/kg in 2005.

Japan imports value added squids

Squid imports into Japan were slightly up in 2006, when compared to the previous year. This was mainly due to higher imports from South America. Total imports during the past year should thus have reached 66 000 tonnes, the highest level in recent history. Prices in the Japanese market went down somewhat during 2006, reflecting higher availability. Coldstorage holdings of squid were faintly higher in 2006 than in 2005, but overall the squid market in Japan looks very mature. China is by far the main supplier of squid to the Japanese market, with 28 900 tonnes, the same as in 2005. Higher squid imports were caused by increased exports from Argentina.

The USA is exporting to China an increasing quantity of squid and in exchange imports processed squid from China. As result of these re-exports, exports of squid increased by 30% in the first eleven months of 2006, while imports grew by 21%. Almost half of the US squid imports come from China, but also other Asian countries, such as Thailand and India, expanded their presence on the US market. Exports from the USA to the Japanese market declined in recent years, as this squid is rather exported to China, processed and then sent to Japan.

European squid market strong

Italy, Spain and Greece are the main European squid markets, while the northern part of the continent only recently has discovered squid as a nutritious and enjoyable food item, and consumption of squid products is growing.

Italy is a major squid market, with imports showing an increasing trend to reach 93 600 tonnes in 2005 and almost 100 000 tonnes. Main supplier of squid to the Italian market continues to be Spain with 28% of the total market. Thailand, shipping small squid, frozen in vacuum packs, has expanded its market share in recent years, and is the main supplier responsible for higher Italian squid imports. Italian squid imports from Argentina depend on the performance of the squid catches there, and thus they went up strongly in 2006. Squid prices in Italy went up in the closing months of the year.

Most of the Spanish squid imports are in reality squid catches by the Spanish fleet, transhipped in ports of the South West Atlantic. In 2006, about three quarters of the imports were of this origin. Last year, catches of squid off mainland Argentina were very good for the Spanish fleet, and about 83 600 tonnes of squid were caught there, 40% more than in 2005.

The “real” squid imports into the Spanish market are thus only 60 000 tonnes per year. India is by far the main “real” supplier of squid to the Spanish market. This country experienced some decline in its squid exports during 2006, as more squid from the South West Atlantic was available to Spanish traders. This product is still the preferred species among Spanish processors and consumers. The move back to the traditional species from the South West Atlantic also explains the sharp decline of Peruvian squid in 2006. This giant squid is considered too tough, and is only used in years when no alternative product is available.

It is interesting to note this fundamental difference between the Italian market, where Thailand is an important supplier, and Spain, which relies more on Indian product. The quality of the Indian product has improved in recent years and is not inferior to the one from Thailand. Peru, which used to be an important supplier of squid to the Spanish market, has lost ground. Probably in years of abundant catches in traditional squid fishing grounds, the Spanish trader returns to the long-established and better product.

Positive signs for 2007

Squid supply should be good in 2007, and prices have started to tend downward, especially for production from South America. Further price declines are likely to materialize in the near future. On the other hand, demand for squid is strong in all markets, with China and the USA increasing their domestic consumption, while the traditional markets (Japan and the Mediterranean) stay strong.

By Helga Josupeit
© FAO GLOBEFISH 2007