World Seafood Shanghai Exhibition (SIFSE) 2021
16th Shanghai International Fisheries and Seafood Exhibition
16th Shanghai International Aquaculture Exhibition
24-26 August 2022 • Shanghai New International Expo Center, China

Industry news

International oil prices rise, directly affected the price of seafood industry


The seafood industry is facing inflationary pressure from rising oil prices, which hit $70 a barrel in early June, the highest level since 2018 and up $20 a barrel from January.

According to the US Energy Information Administration, the average price of diesel in April was 26% higher than 2020, and US retail gasoline prices hit a seven-year high over the recent Memorial Day weekend.

It is a similar story on the other side of Atlantic: fuel prices in the UK have returned to pre-epidemic levels and demand for both petrol and diesel has risen sharply since the start of the year.

The rise in fuel prices has been particularly dramatic, according to the RAC, with drivers wondering if there will be an end to price rises soon after seven consecutive months of increases. We are now witnessing the biggest 12-month increase in oil prices since May 2010.

For the seafood industry, higher fuel prices have a cost impact on everything from fishing boats for freight trucks to container ships to electricity.

The seafood industry has been warmed to hedge fuel costs for the rest of the year. Supply is expected to tighten as the development of clean energy makes conventional fuels more expensive.

With the development of clean energy, government restrictions on fossil fuels and reduced investment will make oil and gas supplies tighter and more expensive.

In Europe, Europeche, a trade body representing about 45,000 ships, estimates that fuel costs can exceed 40 percent of operating costs.

Fishing companies fear that the WTO talks on subsidies could lead to the removal of fuel tax exemptions. Daniel Voces, managing director of Europeche, said a sharp rise in oil prices would deal a further damaging blow to the industry. In some cases, this could double the current price of fuel for fishing vessels.

Fuel is just one of the many problems posed by the COVID-19 pandemic. While aquaculture feed producers say they have no choice but to pass on soaring raw material costs to aquaculture producers, retail analysts on both sides of the Atlantic take opposing views on whether seafood processors will be able to pass on higher fuel and other costs.

Rick Stein, vice president of fresh foods at the Food Industries Association(FMI), which represents the national's food retailers, wholesalers and suppliers, says inflation is coming fast and hard.

He expects retailers such as Walmart to issue statements insisting they will not accept higher costs, forcing suppliers to make a decision, but consumers could still end up footing the bill.

Rick Stein says there will be a domino effect.

In the UK, things seem different.

Jonathon Banks, UK retail analysty, said price rises would be difficult to pass on in the currenet enviroment. But Mike Watkins, director of retailer and business insight at Nielseniq, disagrees.

Mike Watkins said consumers would see the impact of higher energy and fuel prices in household bills, and while some of the cost price increases were being passed on through the supply chain, it was not enought to send shop prices up again.

News Source: Intrafish