NEW YORK -- There are signs that seafood will be added soon to a long list of commodities with spiraling prices.
For the first time in more than a decade, fish prices are rising in real terms. That is good news for commercial fishers who have struggled to stay afloat in the face of fierce competition, fickle consumer tastes and the emergence of aquaculture, but some wonder if it is not already too late for many.
Soaring fuel prices have dramatically raised the cost of going to sea. And active fishing fleets are shrinking. For example, Shinnecock Inlet, a popular fishing port in Long Island, N.Y., was home three years ago to 48 vessels fishing for whiting, squid and other species. This year, four vessels have left port, with the vast majority of operators refusing to send out boats because they cannot recover costs.
"What it tells you is that the fisherman is not being able to recover his losses on fuel with respect to the buying on the wholesale level from the boats," said Roger Tollefson, a New York Seafood Council board member.
While producers have so far largely eaten the extra costs, that is changing. Tuna prices have almost doubled, raising the cost of canned tuna sharply for the first time in 20 years. Prices for many bottom feeders like whiting and monkfish are up by 10 percent or more. And the price of Alaska pollock, used in a wide variety of frozen products, jumped suddenly this year after being flat for a long time.
"It is mainly a reaction to higher fuel prices, which also led fishing fleets to stop production," said Helga Josupeit, a fish industry officer at the U.N. Food and Agriculture Organization (FAO).
FAO is mostly keeping an optimistic view of the current price trends, arguing that the growing value of catches is justified given how long commercial fishers have endured low prices. "When taking inflation into account, fish prices have declined by almost 50 percent during the two decades," Josupeit said. "Thus, any upward movement is merely a recovery of inflation for the industry."
But others aren't so sure. Farmed fish have not risen in value as sharply as many wild catch species have, since aquaculture is less dependent on fuel costs. Some of the more popular farmed species, especially shrimp, have actually plummeted in value recently in a wave of cheap imports from the developing world. But higher feed and fuel costs are affecting farmed fish, as well.
The accelerating cost of diesel is now the main worry for the fishing industry. So far, fleets have had to bear the brunt of record oil prices -- the economics of seafood do not make it easy for them to pass on costs to consumers. But as more boats refuse to head out to sea and catches decline, this is unlikely to last.
Consumers who have yet to see fish prices rise as sharply as other food commodities should brace themselves, experts say. The sliding value of the dollar has helped deaden some of the impact of high fuel costs for overseas seafood suppliers, but industry insiders fear that the global seafood industry is fast approaching a tipping point.
"We, and others with strong currencies vis-à-vis the U.S. dollar, have avoided a little of the impact, but the impact is now overwhelming," said Alastair Macfarlane, a general trade and information manager at the New Zealand Seafood Industry Council.
"The fact is that that fuel has increased from being about 20 to 30 percent of the operational cost of fishing to now being around 50 percent or more of the cost of a trip," he said. Vessels are also sitting idle in New Zealand ports, he added, as they are up and down the U.S. East Coast.
Still, there is a huge degree of uncertainty about how the price of oil will ultimately reshape the world's fisheries, especially if it continues to go up past where it stands today, at around $140 a barrel.
For most other commodities, the relationship seems linear -- as oil prices rise, prices for corn, soybeans, wheat and other energy-intensive crops steadily increase as well. But the seafood industry is different.
"The seafood industry is really sort of a lot of little industries," said Gavin Gibbons at the U.S. National Fisheries Institute. "For instance, clams in the Northeast, they are taking a real beating when it comes to fuel. It's a scenario where it's very expensive to send out the trawlers and harvest the clams."
That is not the case with shrimp, which often compete with clams for consumer palates, explained Gibbons.
"Shrimp, generally speaking, is an aquaculture product. It's farmed," Gibbons said. "So they don't have trawlers, they don't have big boats that go out to harvest their catch." Thus, higher fuel costs do not necessarily mean higher prices for clams if restaurants can simply take them off the menu and switch to something else. Also, prices for many of the more popular species are set at auction at various ports around the world, further complicating the picture.
There is plenty of anecdotal evidence of the weak bargaining power of boat operators.
Last month, for example, commercial fishers in Alaska's Aleutian Islands went on strike, protesting the price for red salmon being offered by the main purchasers there. At 70 cents a pound, the returns were too low for them to recover their losses from high diesel fuel costs. The dispute underscores how volatile the market for seafood can be, with no automatic supply-demand signals setting prices as with most other commodities.
That volatility has made tracking global fish prices a tall order. FAO has never bothered to develop a fish price index that it could use to track general price trends as it does with most other food commodities. And officials with the National Oceanic and Atmospheric Administration said they do not compile price trend data for historical comparisons.
"The factors that influence fish price go beyond 'normal' agricultural or economic patterns," FAO explained in its latest report on global food price trends.
But fish prices are visibly trending upward now, and FAO says it may soon develop an index to get a better grasp of the market. Icelandic cod is up by about 50 percent, ultimately forcing restaurants to pass the higher costs on to their customers. Fish and chips restaurants in the United Kingdom will likely have to sharply raise the price of the national dish to cope.
And a major disruption to any regional market could have a catalytic effect, sending prices higher globally. In Japan, commercial fishers have said they will keep their vessels in port for one day to protest high fuel costs. As Japan has one of the world's largest fishing fleets, it is not yet clear what one day of inactivity by the Japanese fleet would do to worldwide fish prices.
The price of crude oil and growing demand for fish in developing countries like China are not the only factors at play. There is mounting evidence that some fisheries are being exploited to the brink, sending prices for popular fish higher in the face of actual resource depletion.
For instance, FAO believes that one of the reasons prices for Alaska pollock rose so quickly is that the U.S. government sharply cut the quota for the season after NOAA scientists grew concerned over the fishery's sustainability.
Depletion is a growing problem, and for no other fish is this truer than for tunas. Prices in Asia for bluefin tuna, the most prized item used in the highest-grade sushi and sashimi, have skyrocketed as catch numbers and the overall size of adults brought in have declined. Bluefins have become so expensive in Japan -- the largest adults sometimes go for $100,000 or more at auction in Tokyo's giant Tsukiji fish market -- that sushi restaurants there are now forced to sell it at a loss, hoping to make up the difference in sales of other items.
Prices for yellowfin tuna, another popular but lower-quality sushi item, are also now on the rise. Overfishing in the South Pacific is starting to take its toll, sending prices for yellowfin steadily upward in recent years. Both FAO and the International Food Policy Research Institute report that most wild fisheries, especially for the difficult-to-regulate highly migratory species like large tunas, are at or near their maximum exploitation levels.
"Fish are highly likely to continue becoming more expensive to consumers compared with other food products over the next two decades," researchers at the International Food Policy Research Institute warned in a recent assessment. "Prices for food fish, fishmeal, and fish oil are likely to rise under nearly all scenarios."
The triple threat of high oil prices, burgeoning demand and stock depletion -- or in some cases, like with Mediterranean bluefin tuna, possible collapse -- have commercial fishers and seafood wholesalers on edge. Since fish consumption tends to be more discretionary, especially in the United States, where fish is mostly eaten in restaurants, it is not clear if the market will accept the impending higher costs and keep the industry thriving.
"Nobody wants to sell seafood at a high price," said Tollefson of the New York Seafood Council. "It's very perishable product; you have to take very good care of it and everything else. And if you have to cut your profit margins down, you sometimes can get into trouble if you don't know what you're doing."
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