A statement released by a group of nine UK Fish Producer Organisations claims that the current oversupply of nephrops has to be adrressed immediately/
The drop in the market for nephrops due to the COVID-19 crisis has compounded an already problematic oversupply situation in the UK shellfish sector says the group of nine fish producers organsiations.
2019 was a good year for nephrops fishermen with higher than average landings volumes in whole prawns and prawn tails. This resulted in negative effects on market prices during the first quarter of 2020, pre-lockdown in domestic and export markets.
Due to the COVID-19 pandemic throughout April and into May, most nephrops boats remained in harbour and inactive, whilst most factories have remained closed.
However, during the lockdown period, some vessels remained operational with some supplying nephrops to buyers at prices that many inside the sector have viewed as undermining the market’s pre-existing price structures.
One of the roles of UK Fish Producer Organisations (POs) is to help facilitate a level of raw material supply that matches with market requirements to support price integrity throughout the supply chain.
In this regard, it is the duty of the POs to address situations which would affect their members and the current oversupply of nephrops could have a detrimental effect as the market begins to recover.
The POs who signed the statement include the Anglo North Irish, Anglo Scottish, Fife, North East of Scotland, Northern, Northern Irish, Orkney and West of Scotland Fish Producers Organisations and the Scottish Fishermen’s Organisation.
In the statement it reads:
“The significant decrease in market demand for Nephrops arising due to the Covid-19 pandemic has exacerbated an already precarious situation of oversupply within the UK Nephrops sector.
“Higher than normal landings volumes of whole prawns and prawn tails due to good fishing throughout 2019 was already starting to negatively impact market price during the first quarter of 2020, before the effects of the lockdowns in domestic and export markets fully took hold.
“Throughout the month of April and into May, most prawn vessels have been tied up, and most factories have remained closed. However, during that time some vessel operators continued fishing for Nephrops, with some supplying buyers at prices that many within the sector have viewed as undermining the market’s pre-existing price structures.
“One of the roles of UK fish producer organisations (FPOs) is to help facilitate a level of raw material supply that matches with market requirements, to support price integrity throughout the supply chain. UK POs share the desire of fishermen and processors to return to some form of normality as soon as practically possible.
“Naturally, the fleet wants to be back at sea, fishing for a fair price, while the onshore sector wants to restart production and see an upswing in demand as soon as possible.
“And whilst the resumption of activity will at least partly be determined by factors outwith industry control, such as lockdown rules in target markets, it is necessary to consider how a managed, gradual resumption of activity can best be achieved in practice, to avoid filling up cold stores which are already well stocked and putting excess downward pressure on quayside prices, resulting in fishing and processing becoming unviable.
“Affected UK POs are therefore united in their belief that a combination of effort and output restrictions will be necessary to restrict supplies to an already oversupplied market due to the ongoing low level of demand.
“The reality is that going forward, landings need to balance with the new level of demand to prevent excess supply ending up contributing towards the establishment of a cheaper and, for some, unviable market.
“UK POs are currently in dialogue with the Nephrops processing sector to establish both what the current market demand requires and what is viable for vessels, with a view to finding a solution that leads to an acceptable outcome for all concerned.”