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Squid market demand has plummeted, prices may fall!

Publish Date 2023-08-01
This year's Argentine squid fishing season was exceptional, with little catch at first, until in recent weeks, the improvement in the northern region brought comfort to the industry as it brought catch close to the level of 2022.

However, market demand has not improved; At least not in traditional markets, where demand has almost completely stagnated recently. Juan Redini, president of the Cámara de Armadores Poteros de Argentina, is trying to find an explanation for why this season, the squid stock has not been caught for a long time.

One factor he takes into account is the rise in water temperature: "The water temperature is three or four degrees higher than normal, and with the arrival of the cold, the squid appears, it is looking for a comfort zone that did not exist before. Usually you park your boat in one place and catch 300 or 400 tons there, but that's not the case this year. Schools of squid move and scatter in the water, which is a very strange year. ”

Juan Redini gives a concrete example of the impact of climate change on rising ocean temperatures that scientists around the world have been predicting. They couldn't find large numbers of squid until the temperature dropped, which allowed the fishing to save itself from an irreparable crisis.

"Now that the fishing season is nearing its end, some boats may catch twenty or thirty tons in a day, but others may catch only two tons, one ton, or none of them. The situation in northern Argentina is very good. In the last three weeks we were able to do two catches, which is very good for us, otherwise we would have gone straight into August. Given the early difficulties in the south and north, we didn't expect us to reach our current catch. Last year we caught 170,000 tonnes and now we're going to get to 140,000 tonnes, both on board and those already caught, so the situation isn't as bad as it seems. Redini celebrated as most of the ships returned to port.

Export data for the first half of the year showed a sharp decline in sales to Spain, China and South Korea. At present, 75,358 tons have been exported, 34.7% less than in 2022, and this situation can no longer be explained by the shortage of resources alone, as one thinks at the beginning of the season.

Why are Argentine squid exports falling?

Juan Redini: Our main buyers are Spain and China, but since the beginning of the prawn situation in Europe, the same problem has arisen. Recently, Spain has hardly imported and very little whole squid;

Italy, another important destination, is also not on the purchase. What I've heard is that consumption has been greatly reduced, and it's no longer so easy to get a loan from a bank to cover the cost of purchase. Previously, they bought by the container and did the inventory because the interest was low, but not now, which makes them start buying by pallet instead of by container. Buyers who buy ten containers are no longer visible. This is a worrying situation, and European buyers have lost purchasing power. We must also recognize that more than 50% of the fleet is Chinese capital, these are sent to China, others will not sell to them, only a few will do.

Q: You usually unload and sell goods, and now having to leave goods in cold storage seems to be a new situation for the industry.

Yes, this is new to us. When my father was working at the company, we had three fishing boats that would come in January and leave in February. They sell everything and leave. Now it's different, the market has changed, now there is a part of the inventory that cannot be sold, you need a warehouse, you need a loan, you need everything. This is a very complex war, you can't just have ships. You need to have equipment on land, have employees, need banking and financial assistance.

Q: Are there other markets?

Africa is a great market and we'll see how it develops. Perhaps, as happened in Spain, it could become a very important market, but we still need a while to look at it. We see some very good signs, but it will take time. The problem we see with Squid Illex is that the catch is very large, but the market is very small, which is a challenge.

Q: What is the expected industry situation in the coming months?

I think the next few months are going to be very tough. The price of squid will be lower because the demand will decrease. No market, no sales, no money. Then we have to start looking for money to cover costs, to get help from banks. This is a challenge, and we must be prepared to face it.

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