Inflation is a word that has increased its presence lately in daily analyzes and reports. Predictably, we will continue to hear it in the upcoming months. Struggle to source raw materials, fewer employees for labor, unreliable cold chains, and processing shutdowns are causing a reduction in supply. Along with this, higher consumer demand catalyzes inflation.
According to the last European Market Observatory for Fisheries and Aquaculture Products (EUMOFA), the annual inflation rate in the European Union reached 6.2% in February 2022. Namely, up from 5.6% in January 2022. In 2021 the rate was 1.3%.
Besides, more than 500 economists gathered for a Reuters quarterly survey indicated that 2022 will bring with it higher inflation. The survey also showed that global growth forecasts will be reduced to 4.3% growth in 2022. Down from the 4.5% predicted in October, due to higher interest rates and higher costs of living.
Lately, customers have been encouraged to buy and consume more seafood products. The main reasons are their nutritional value and the effort that all agents are making to present it as one of the most sustainable foods.
However, as the prices are rising, large sectors of society can end up avoiding fish from their diets for reasonable economic reasons.
Most importantly, as inflation becomes a harder reality to face in some of the humblest places in the world some basic food products have become even more difficult to afford. For anyone who supplies consumer goods, it is an important scenario to consider.
In addition, fish producers have had to deal with the fuel prices that power the fishing boats and grains shortage for the fish feed. Besides, the cost of packaging, or the other fish that the factories process, and overhead costs have increased.
Also, setting limits for some wild shellfish species is causing stock shortages. Furher, increasing demand for products that are in short supply.
Along with the pandemic, the invasion of Ukraine by Russia has affected the growing inflation that we have been suffering.
We already mentioned that wheat is an essential component of fish feed. Ukraine turns out to be one of the world's most important wheat exporters. This country is an essential agent when we talk about aquaculture feed ingredient suppliers. Before the war, prices had nearly tripled.
On the other side, EUMOFA advised that the demand increased for seafood in Europe during the COVID-19 pandemic combined with negative demand due to the rising prices, which might have a substitution effect towards cheaper imported seafood.
As the aquaculture industry suffers the ravages of inflation, companies, governments, and the rest of the agents in the sector, try to find solutions and alternatives. So, their products continue to have a special place at the table of diners.