Venue: Seattle, USA
Date: 16-20 July 2018
Web of the event: http://iifet2018.org/
Economic Sustainability of Seabass/Seabream Production in the Mediterranean Sea by European Firms
Jose Luis FERNANDEZ SANCHEZ, Manuel LUNA GARCIA, José Manuel FERNANDEZ POLANCO, Ignacio LLORENTE GARCIA, Ladislao LUNA SOTORRIO
European seabass and gilthead seabream are two economically important cultured fish species along the Mediterranean coast. Both species represent respectively 10.9% and 13.5% of the total value of the European aquaculture sector (Eurostat, 2013). The EU is one of the largest producers of seabass and seabream in the world, being Greece the largest producer within the EU, followed by Spain.
However, the Turkish seabass and seabream industry has been steadily increasing production volumes for the last decade to the point where Turkey is now the world’s major producer of seabass, competing with European producers with lower prices (Globefish, 2015). As consequence, during this period of time, European firms have been struggling to maintain profitability of their farms. The main aim of this work, which is part of the MedAID project funded by the EC (H2020, GA727315), is to carry out a break-even analysis (BEA) of seabass/seabream European producers in the Mediterranean Sea. Calculation of break-even point is important for every business because it tells business owners and managers how much sales are needed to cover all fixed as well as variable expenses of the business or the sales volume after which the business will start generating profit. To perform this analysis, we have used an unbalanced panel of data composed of a sample of 16 seabass/seabream producers’ firms in the Mediterranean Sea from 7 European countries (Croatia, Cyprus, France, Greece, Italy, Slovenia, and Spain) during a period of 10 years (2005-2014). Economic data for this analysis was obtained from the Amadeus and Eumofa databases.
Market dynamics of the Mediterranean Bass & Bream Industry
José Manuel FERNANDEZ POLANCO, Ignacio LLORENTE GARCIA, Trond BJORNDAL, Maria COZZOLINO, Lamprakis AVDELAS, Nada BOURGOUSS
The market for seabass and seabream is concentrated in the Mediterranean and surrounding countries. Within this area Turkey and Greece are the main producers and exporters. Spain and Italy have also relevant volumes of domestic production, but it is not enough for satisfying the internal demand. Other relevant markets in terms of demand are France, Portugal, the UK and Germany. A simultaneous equation model is used to describe the dynamics of equilibrium in the long term showing significant differences across groups of countries in the factors affecting demand and supply according to the role played in the international market place. Countries can be grouped according to whether they are exporters or importers and the former according to the relevance of the domestic production. Models are consistent within groups. Imports contribute to increase the elasticity of demand in the main consuming countries. This effect benefits consumers who have more products available at cheaper prices. However, it is an inconvenient for the domestic farming industries operating with less or non elastic supply functions. Demand turns from elastic to inelastic as the volumes of imports decrease along countries. On the other side, supply is more elastic in Turkey and Greece where production is mainly driven by exports. The supply and production functions also confirm the high dependence on fish meal and fish oil which results in inefficiencies when the price of the feed increases. This work is part of the MedAID project funded by the European Commission (H2020, G.A. no. 727315).