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April, 2006 Edition
What's Happening at the FCC
Boston Seafood Show
FCC and DFO organized an industry roundtable meeting with Minister Hearn in Boston
prior to the opening of the Boston Seafood Show. FCC member companies from Nova
Scotia, Newfoundland & Labrador, New Brunswick, PEI, British Columbia, Quebec, and
Nunavut reported on the current challenges and opportunities facing the industry in their
province, territory, or sector. As well, Associate member, Stavis Seafoods outlined some
of the issues that are impacting on certain product segments of the US market in 2006.
The exporters commented not only on the US market but also on developments in Europe
and China. Common themes focused on the impact of the strong Canadian dollar,
increased cost of fuel, the impact of globalization and aquaculture on market prices, and
the higher standards imposed on the industry regarding traceability, etc from an
increasingly consolidated distribution and retail sectors. Industry members noted that the
industry has survived tough economic times before and will persevere through the current
challenges. However, these new economic challenges make it increasingly important for
the Minister and the department to understand and consider the effects of fishery
management decisions and direction on the economic viability of the industry.
In response, Minister Hearn noted that he felt he was well aware of the current situation
from his membership on Parliament’s Fisheries Standing Committee and the recent
reviews undertaken by that Committee and the presentations made to it. He noted that he
will proceed with a new Fisheries Act which should provide industry with a better sense of
stability upon which to make investments and also help the department to better address
fisheries enforcement issues.
Byrd Amendment
FCC has been advised that the 15% surcharge on the import of oysters and some other
selected products from the US will expire April 30th. Canada wants to see how the current
softwood lumber negotiations proceed before considering the introduction of any new
round of surcharges. These consultations will take place, if at all, in June/July. Most
affected sectors have already advised that they don’t want to see any surcharges reapplied
on their sectors.
Key Meetings, April
Canada- France 3Ps Advisory Committee Meeting, St. John’s, NL
The agreement is scheduled to expire early in 2007. This meeting will begin the
assessment whether Canada should allow it to expire, renew it for another 5 years, or
renew it but attempt to re-negotiate certain elements of the agreement.
Aquatic Animal Health Steering Committee, Ottawa
Committee will review current developments of this recently funded ($59 million)
CFIA/DFO initiative and review the planned work program for the remainder of 2006/2007
fiscal year.
FCC Board of Directors Meeting – Ottawa.
Much of the afternoon session of the Board meeting will be a dialogue between Board
members and Larry Murray and the senior executives of the Department of Fisheries &
Oceans. The Board and the DFO officials will be joined by Fisheries & Oceans Minister
Hearn and senior executives in his office for an evening reception and dinner.
Trade Policy
WTO Negotiations
The world trade negotiations are starting to show some momentum and focus. The
negotiations have pursued two tracks (i) overall formula % cut; and (ii) enhanced tariff
reductions/elimination for certain sectors including fisheries. However, at a recent high
level meeting, the US and the EU, agreed to join forces to focus on getting parties to agree
on a US/EU formula approach and postpone discussions on enhanced sector reductions
until the formula approach is agreed upon. This is in recognition that the window for these
negotiation effectively closes on August 1, 2006 when US Administrations negotiation
mandate expires.
While we are still attempting to get the exact details of the US/EU formula and how it
works, US contacts advise that the formula would create tariff ceilings for developed
countries such as the EU of 10% and 15% for developing countries. As well, tariffs of 5%
or less would be determined “nuisance tariffs” and as such eliminated.
Inspection/Technical
Aquatic Animal Health
CFIA & DFO have initiated an ambitious program to develop a comprehensive aquatic
animal health reporting regime to meet the requirements of the World Health Organization
and to match developments by EU and USA authorities. The initiative is mainly in
response to aquaculture concerns but will impact the wild fisheries, including the
processing sector.
CFIA has program & legislative lead and oversight responsibilities; will establish the import
controls and export certification requirements; the disease response to the World Health
Organization and enquiries from trading partners; and the surveillance of aquaculture
species. DFO needs to build up its diagnostic capabilities and disease research
capabilities and will be responsible for the disease surveillance of the wild species.
Consultations on the initiative are commencing and will continue through mid-June, trying
to reach a consensus on what diseases will be (i) reportable and the appropriate control
regime for these diseases; (ii) immediate notification if they are detected with the
consultations to follow to determine whether a control regime is warranted; and (iii) annual
notification – no control regime is required if the disease is identified.
The objective is to propose regulations for comments by mid-January 2007
Market Issues
Russia Sets its Far East Quotas
The Russian TAC has been set at 2.677
million tons for the year, or roughly 6% lower
than last year. The allocation for all of Russia,
including the Barents Sea, is 20% lower than
last year at 3,104,369 tons.
Herring allocations showed an overall decline
of 7%, but the allocation in the main roeherring
fishery in the northern Okhotsk Sea is
only about 2% lower than last year. Overall
allocations for the turbot/halibut fisheries are
roughly 28% lower than last year. The quota
for opilio tanner crab for all districts was set at
18,182 tons for the year which is about 2%
lower than last year’s allocation.
Alaska Snow Crab
Japanese fisheries press reports advise about 4,000 tons of frozen sections have been
produced so far this year, all of which has gone into the US market. An additional 1,000
tons of opilio has been shipped to China for the Japanese crab meat market. This leaves
between 5,000 to 6,000 tons of opilio available for either the Japanese or US markets. At
this point, however, the Japanese are a bit concerned about whether they will be able to
meet their purchase projections from the Alaska fishery, and the possible affect on their
buying strategy for the Newfoundland fishery. (HKS March 11, 2006)
Iceland Capelin Roe
Production of roe-capelin in Iceland is over, and the focus has now shifted to capelin roe
production. Even with the reduced quotas for the year, this year's production of capelin roe
is expected to be close than 8,000 tons. This would make this year's production second
only to the 9,000 tons produced last year. About 80% of this roe is mature product
suitable for the Japanese market.
Needless to say, the Japanese were surprised at the volume of roe produced this year.
This doesn't mean that all of the roe will be going to Japan. About half of the capelin roe –
between 4,000 and 4,500 tons – will be shipped into the various European markets. An
additional 700 to 800 tons are expected to be shipped to markets in Korea, the US and
Canada. This leaves between 3,300 and 3,800 tons of roe available for purchase by the
Japanese. In Japan, however, the increased supply from the 2005 fishery means that the
processors only need about 2,500 tons to meet their needs for the year. There is a
definite over-supply as far as the Japanese market is concerned.
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