Cutter fishery sees little improvement – loss again this year

Fuel prices

High fuel prices remain the main cause of losses in the cutter fishery. The price has fallen slightly to 0.78 euro/litre on average from 0.94 euro/litre in the first half of 2022. The larger beam trawlers in particular suffered as a result of the high fuel costs. Other costs also increased, including costs for the ships’ maintenance and repair.

Lower input, landings and yield

Cutter use came in 11% lower in the first half of 2023 compared with the same period in 2022. That was a year in which use was also down 16% from 2021. Fish and shrimp landings, at 2.2 million kg, were down 12% compared with the previous year. The total volume of fish and shrimp came to almost 16 million kilograms compared with a little more than 18 million kilograms in the first half of 2022. The yield was 82.5 million euros, and in 2022 it was 95.5 million euros. The cutter fishery suffered losses of 12 million euros in the first half of this year. This figure was as much as 19 million euros in 2022.

Decommissioning

A large number of flatfish cutters did not go out this year, either because the fishing was unprofitable or because they were waiting for settlement from the decommissioning scheme launched in 2022 for scrapping the cutter. The decommissioning applications for 54 cutters were approved more than a month ago. The ships have now been scrapped, or at any rate decommissioned in line with the rules, and will not return to the fleet.

Fish prices

The average price of shrimp fell early this year and was more than 90 eurocents lower in the first six months of this year than in the same period of 2022, while shrimp landings have declined. Prices for fish at fish auctions rose by contrast. Average prices per kilogram at the auction for sole, plaice and squid came in at 17.28 euros (+17%), 2.75 euros (+5%) and 12.02 euros (+16%) respectively. The price for mullet fell to 7.82 euros (-15%).

Improved energy efficiency not yet happening

The average gas oil price was €0.78/litre in the first half of this year. This is a fall of almost 17% compared with 2022. But consider that in that year, the price of gas oil had already risen almost 100%. The fishery sector remains unprofitable, even though gasoil prices have fallen. Alternative or more economical fishing methods do not currently exist, and innovation is a long-term process. The Dutch fishing fleet is currently unable to transform itself in a short time to a fleet with, for example, other forms of propulsion or drastically lower energy consumption. There is an urgent need to develop other business models.

The cutter fishery already made a loss in 2022

The year 2022 showed a loss of 6 million euros for the cutters. In the previous years 2019, 2020 and 2021, the results were still positive, 9, 5 and 4 million euros respectively. In the cutter fishery, the onboard crew are paid through a profit-share system, sharing in the net yield after costs are paid. As self-employed persons, the crew’s income is determined to a significant extent by costs, meaning that high costs result in falling incomes.

Uncertain future

North Sea fish is no longer the dominant raw material for fish processing and trading companies. In the cutter fishery in particular, fish landings have been reduced drastically as the use and size of the fleet has fallen.

The decline in fish landed from the North Sea remains a concern. The share of North Sea fish caught by Dutch boats that is processed and traded in the chain is falling rapidly. The decommissioning of a group of mainly large cutters means that less fish is being landed. This forces fish auctions and trading and processing companies that depend on North Sea fish to find alternative raw materials in order to continue processing and trading fish.

There is great uncertainty in the shrimp fishery in particular. Prospects are lacking for investment in sustainability and making the fishing industry profitable again. Shrimp fishers must come within certain nitrogen standards – transparently and within the foreseeable future – to continue to be able to secure a permit under the Dutch Nature Conservation Act. This permit is needed to fish in Natura 2000 areas, such as along the coast and in the Wadden Sea. In addition, there is an ongoing discussion on bottom fishing.

Mussel landings back to square one

Mussel landings in the 2022/2023 season were historically low at 28 million kg. This was 5 million kg down on the previous season, when landings were also low.

The average price of mussels fell to 1.80 euros per kilogram, down 8% from the previous season. Owing to the lower price and reduced landings, the value of mussels harvested came to 51 million euros compared with 66 million euros in the previous season. The 2021/2022 season still saw a positive result of 23 million euros. This will now come in at between 5 million and 8 million euros.

The mussels sector is developing alternative techniques for capturing mussel seed. This seed serves as raw material for the further growth and culture of this shellfish. There is currently less mussel seed fishing. Mussel seed capture installations (MZIs) offer an alternative to fishing.

Mussel seed is captured by these systems without disturbing the bottom. Fishing for mussel seed has to be gradually reduced up to 2029, after which seed may only be captured using MZIs. This will require more labour and involves higher costs and investments.

The trade in fish is growing, but not as a result of North Sea fish

Dutch fish processing and trading companies managed to record growth, despite declining landings of fresh North Sea fish Fish products such as farmed salmon from Norway, white fish such as cod from Iceland and farmed tropical shrimps from Asia are imported in large volumes to be processed and traded in the Netherlands.

Fish processing companies are increasingly relying on fish that is not from the North Sea. The risk here is that the Netherlands does in fact invest in the sustainability and maintenance of a fishing fleet, but not in the North Sea fish processing chain. A possible consequence in the future could be that catches increase again, but efficient fish processing of fresh North Sea fish can no longer be done in the Netherlands.

Global demand for fish is increasing

Fish exports from the Netherlands continued to grow to a value of 6.3 billion euros in 2022 (+19% compared with 2021). Some 80% by value of fish, crustaceans and shellfish were destined for the EU internal market. The top five main purchasers by value of fish products from the Netherlands were Germany, France, Belgium, Spain and Italy. For deep-frozen pelagic fish, including herring, mackerel, horse mackerel and blue whiting, Nigeria and Egypt are particularly important markets.

Since part of the Dutch cutter fleet has taken advantage of the decommissioning scheme, it is expected that landings, and consequently the supply of fresh North Sea fish, will further decline. This is happening even though global demand for seafood is rising.

Dutch fish processing and trading companies will start importing more to meet demand. Total import value increased by 22% to 5.1 billion euros in 2021-2022. The value of imports has risen, as fish has become more expensive and more premium fish products such as salmon for processing and trade are being imported.

Fish imports increased in volume by 1% (1.1 billion kg). In recent years, increasing amounts of fish have come from non-EU countries. Its value even rose to 58% of total import value in 2022. Dutch companies are increasingly importing directly from fish-producing countries. This allows them to achieve higher financial margins. The Netherlands will, however, become more dependent on fish from non-EU countries and thus more vulnerable as a result of these developments.

Farmed fish (aquaculture) is also expected to expand to meet the rising global demand for fish. It is not just the prices of farmed fish themselves, such as salmon, that have soared. Feed for fish farming, made from mostly wild-caught fish, soya and other vegetable material is also expensive, owing to growing demand.

Turbulent times caused by rapid successive changes

After the drastic changes brought about by the COVID-19 pandemic and Brexit, the war in Ukraine is now causing sharply higher energy prices and inflation. Fish processing companies with multiple cold stores and deep-freeze lines are facing sharply increased production costs. These increased costs are ultimately passed on to the buyers by the companies in the chain. This could prompt supermarkets and consumers to choose alternative sources of protein, such as chicken, instead of fish.

Trading relations between the EU and Russia are also under pressure from the war in Ukraine. The EU, including the Netherlands, imports from Russia primarily whitefish such as saithe and cod for making products such as kibbeling (fish nuggets).