European Fish Market

BMK · Jan 17, 2023

Several months ago, I posted about fish futures. It turned into a very interesting and entertaining thread:

https://www.elitetrader.com/et/threads/fish-futures.369880/

Yesterday, I ran across this article about how the European fresh fish market actually works. Or, rather, how it doesn't work. Seems most of the market is still functioning through one-on-one telephone calls between dealers and customers. Like retail stockbrokers in the 1980s, and some parts of the bond market even today.

https://www.wired.com/story/fishing-online-trading/

Okay, so the article is actually about a startup that has developed an online trading platform that will drag the fishing industry into the 21st century.

Feels like a good bet if they ever go public.

maxinger · Jan 17, 2023

Many months have passed.
It is time to review your progress / performance.
By now, you should show us your progress of
your interesting and entertaining fishy business.

Have you traded fish futures?
Is the volume around zero?
Which Exchange and Broker are you using?

Or are you trading physical fish?

zdreg · Jan 17, 2023

maxinger said:
Or are you trading physical fish?
More...

One caveat, guests and fish stink on the third day.

long · Jan 17, 2023

I suspect that the only winner will be the exchange. At least for a while. Almost 10 years ago I read about a startup that was going to be a "futures exchange" for organic grains. I followed it closely and I never got to that point. It's just an online platform for posting ads when you have grain to sell or want to buy grain. Nothing remotely close to an actual futures contract. I suspect that the fish market will go the same route, a subscription-based platform that connects buyers and sellers but doesn't offer a true derivative.

BMK · Jan 17, 2023

long said:
I suspect that the only winner will be the exchange. At least for a little while. Almost 10 years ago I read about a startup that was going to be a "futures exchange" for organic grains. I followed it closely and I never got to that point. It's just an online platform for posting ads when you have grain to sell or want to buy grain. Nothing remotely close to an actual futures contract. I suspect that the fish market will go the same route, a subscription-based platform that connects buyers and sellers but doesn't offer a true derivative.
More...

The platform mentioned in the article is not trying to offer futures or any other type of security. It is an online exchange that facilitates the purchase and sale of fresh fish in wholesale, commercial quantities. That's all they are trying to do, because most participants in the fishing industry are still doing business by telephone.

There are genuine futures contracts that are based on an index that tracks the price of Norwegian frozen salmon. These contracts are traded... somewhere, maybe even on the Nasdaq exchange. But I don't know if there is any meaningful volume, and most brokers probably do not make these products available to retail accounts.

The futures are cash-settled, based on the salmon index. They are not tied to physical fish. The discussion of those futures is in this thread:

https://www.elitetrader.com/et/threads/fish-futures.369880/

BMK · Jan 18, 2023

zdreg said:
One caveat, guests and fish stink on the third day.
More...

The article that I linked above actually contains the following text:

The clock ticks down throughout the process: Traders are handling a depreciating asset. "You have a maximum of three days to move the fish on, or you’re dead," says Desormeaux, a veteran commercial fish buyer based in the French port city of Saint-Malo, Brittany.

zdreg · Jan 18, 2023

Courtesy of BMK
JAN 5, 2023 7:00
Digital Traders Want to Go Fish
A network of trading platforms is restructuring the seafood industry and tackling waste.

PHOTOGRAPH: BKSRUS/GETTY IMAGES

The AI Database →
END USER

STARTUP

THE CHAOS BEGINS at 5 am. The markets open, the traders arrive, and the auction floor heaves. Over the next six hours, gambles are taken, hands are shaken, and deals are made in a flurry of brinkmanship, shouting, and testosterone.

But this isn’t a Wall Street trading floor, and the commodity isn’t financial assets. Instead, the stock is of a different variety: fish. This is how fishermen auction their catch to primary processors who slice, dice, and prepare seafood for wholesalers, the last-mile delivery companies that supply restaurants, fishmongers, and supermarket

A patchwork of 140,000 businesses make up the European seafood market, which trades more than €140 billion (about $148.5 billion) worth of fish every year. Despite those high numbers, it’s an industry predominantly conducted offline and resilient to disruption; besides phone calls and emails, the grandest use of technology may be the occasional WhatsApp message to a close contact in a fish buyer’s network.

Edinburgh-based Rooser is beginning to change that. Its B2B seafood-trading platform connects buyers and sellers—the primary processors who supply the fish to wholesalers who demand it—across 13 European countries. Following his frustrations opening a fish factory in Aberdeenshire, Joel Watt founded the business in 2019 alongside Nicolas Desormeaux, Erez Mathan, and Thomas Quiroga. “You have 35,000 different types of seafood products moving on nothing but human emotion, with no central price information,” explains Watt. “It’s professional gambling: Buying a pile of fish with the hope of quickly selling it—it easily goes wrong.”

In the fishing frenzy that moves catches up the supply chain—from the ocean to the icy boxes at auction to the trucks transporting the goods around the country and eventually to the plate—a piece of fish may end up changing hands seven times. The clock ticks down throughout the process: Traders are handling a depreciating asset. “You have a maximum of three days to move the fish on, or you’re dead,” says Desormeaux, a veteran commercial fish buyer based in the French port city of Saint-Malo, Brittany. “Once the truck leaves at midday, you have to wait for the next day. The longer you take, the greater your price-per-kilo losses become.”

Mistakes are inevitably made in the daily rush. Watt and Desormeaux aim for Rooser to take the guesswork out of seafood trading. “I remember one Saturday night sitting on a harbor wall looking through my contacts trying to sell 10 tonnes of mackerel I’d accidentally bought,” says Watt. “Without a communication channel connecting everyone in the chain, you might overpay for a species from the Scottish market, only for its price to plummet once the Danish catch comes in, and you suddenly can’t sell.” Further complexity has been added to the supply chain by Brexit. “It’s introduced layers and layers of paperwork, creating more friction in moving fish between the EU and UK,” Watt says.

A centralized marketplace doesn’t just benefit seafood traders. Watt says for every two pieces of fish consumed, another never makes it to the plate. By laying out all the information in real time, panic buying is reduced, sales are made faster, and less fish goes to waste. “It passes the shelf life on to the end consumer,” says Watt. “We’re the scoreboard in the middle of the process, allowing whoever wants to buy the fish to do so at the right price. Rather than have your team be on the phones all day trying to sell, you can now load all the information into a single point, going from one-to-one sales to one-to-many.”

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Having secured £17.5 million in an April funding round, Rooser next plans to scale globally and connect all the players in the worldwide seafood supply chain, even down to the individual boats and fisheries. The data harvested could be used to not only accurately track the carbon footprint of a piece of fish and improve its traceability for consumers—Rooser could eventually become the Google Maps for the fishing industry. “Every time a fishing net is taken out of the water, we’d be able to track where it’s been and map the ocean where the best fish are at different times of year,” says Watt. “We could then provide that data to governments to better manage fish stocks in a data-driven way.”

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Seafood is a traditional business. Generations of hardy seafarers form its backbone, supplemented by seasoned traders and straight-talking businesspeople, all looking to maximize profits and sniff out others’ weaknesses. Roosers’ founders, however, grew up in the industry: They’re eager to stress that they aren’t trying to be disruptors, but innovators. “If you tell someone in this world what their grandpa did was shit, you’re history,” says Desormeaux. “If you say you have new methodologies, technologies, and systems to better facilitate their daily business, and all the knowledge still falls on them, then it works.”

Yet for an industry built on toil, battle-hardened reputation, and long-term connections, the seafood trade has been relatively quick to adopt Rooser. “An older contact of mine said he would never use technology: ‘If you want to sell fish to me you have to call me every day,’” says Desormeaux. “Now, he buys on our platform and tells me to stop trying him over the phone—he’s too busy using our system.”

ph1l · Oct 2, 2023

Look for a jump in salmon prices.
https://www.theguardian.com/environ...celandic-fish-farm-the-impact-could-be-deadly

Thousands of salmon escaped an Icelandic fish farm. The impact could be deadly
Arctic Fish. Dyrafjordur, Westfjords, Iceland. Photograph: Haukur Sigurdsson/The Guardian

Karen McVeigh in Westfjords, Iceland

Clad in black waders, Guðmundur Hauker Jakobsson jumps into the River Blanda, whose freezing waters run down from the Hofsjökull glacier. Armed with a net, he casts around the ascending pools of the river’s fish “ladder”, built to aid wild salmon migrating up this powerful waterway from the sea.

Within minutes, he pulls out a 15lb silver fish, which thrashes and writhes against the net, then another, then another – five in all. The wild salmon of the Blanda here in north-west Iceland are some of the largest and most athletic in a country where the rivers are considered among the world’s best. King Charles has fished for salmon here, as have David Beckham and Guy Ritchie; Eric Clapton is a regular.

But these, says Jakobsson – known as Gummi, who is the vice-chair of the Blanda and Svartá fishing club – are not wild fish.

Guðmundur Hauker Jakobsson draws a salmon from the river

“Look,” he shouts above the howling wind whipping our faces, pointing at one salmon. “It’s an intruder.”

Sure enough, it has a rounded tail and torn fins: signs of a farmed salmon. He suspects it’s a fugitive from an open-net pen where just last month, on 20 August, thousands of fish grown in pens from a Norwegian strain escaped. They have since been found upstream in rivers, endangering the wild salmon population and hitting the headlines in Iceland.

Suspected escapees have now been found in at least 32 rivers across north-west Iceland, according to unconfirmed social media posts, one of which showed fish covered in sea lice, a parasite that can be lethal to wild fish. Iceland’s Marine and Freshwater Research Institute (MRI) confirmed the farmed fish have been found in multiple rivers.

Farmed salmon fished from the Blanda River

The escape – at a pen in Patreksfjörður owned by Arctic Fish, one of the country’s largest salmon-farming companies, which is owned by Norwegian salmon giant Mowi – has reignited calls from environmentalists, sport fishers and some politicians to restrict or ban open-pen fish farming. It is not the first big escape: just last year, another salmon farming company, Arnarlax, was fined £705,000 for not reporting an escape of 81,000 fish in 2021.

Gummi with his father, Jakob

Gummi and his father, Jakob, 73, have captured 44 farmed salmon over the past fortnight, after closing the ladder to stop them swimming upstream. At a garage next to his house in nearby Blönduós, a coastal village a short drive from the river, they point out what sets the farmed fish apart for their wild cousins: worn gill covers, shortened and disfigured snouts, and missing or torn fins. Gummi has sent 11 of the fish to MRI for analysis.

“This is an environmental catastrophe,” he says. “If they breed, the salmon will lose their ability to survive.”

Indeed, studies have shown interbreeding between farmed and wild fish produces offspring that mature faster and younger, undermining the ability of the species to reproduce in nature.

Farmed salmon with their trademark disfigured snouts and torn fins

There are three reasons, scientists say, this escape is so disastrous: the fish are entering many rivers over a large area; there are in greater numbers than ever seen before; and a high percentage are mature, ready to breed.

Last week, Iceland police opened an investigation into whether Arctic Fish has breached laws governing fish farming. Specialist divers, paid for by Arctic Fish, are hunting down escapees; the firm’s CEO, Stein Ove Tveiten, who along with board members could face up to two years in jail if found guilty of negligence, has apologised for the incident.

An Arctic Fish farm at Dýrafjörður, Westfjords

Iceland’s open-net salmon farming industry is in its infancy compared with Norway’s, which produced 1.5m tonnes in 2021 – or Scotland’s (205,000 tonnes) – but it has grown more than tenfold since 2014, from under 4,000 tonnes to 45,000 in 2021.

speedy growth has brought problems. Iceland’s national audit office found regulation patchy and weak and the industry largely unsupervised. It found that the Icelandic Food and Veterinary Authority did not consider additional monitoring necessary, despite serious and repeated breaches of regulations.

“This is more than a wake-up call,” says Jón Kaldal of Icelandic Wildlife Fund about the escapes. “All red lights should be blinking. You’re talking about the future of wild salmon.”

Globally, the numbers of wild Atlantic salmon, a keystone species for many mammals and birds, have dropped from 8-10 million in the 1970s to 3-4 million today. Only 500,000 are left in Norway, half the number of 20 years ago. Escaped farmed fish and sea lice – a persistent problem in open-pen farms – are their greatest threats. Scotland has seen a 40% decline in salmon returning to rivers over four decades; the Scottish government says many factors have caused the crisis, including the climate emergency, but that sea lice from aquaculture were partly to blame.

Arctic Fish has four sites in the area

Environmentalists also say open-pen farms cause pollution from organic waste and the pesticides to treat sea lice. A medium-sized fish farm of about 3,000 tonnes can produce as much effluent as a city of 50,000 people, according to the Norwegian Pollution Control Authority, and eutrophication problems – too many unnecessary nutrients added to water bodies, causing harmful blooms of algae – may follow.

In Iceland, the extent of hybridisation between farmed and wild salmon may be more extensive than previously believed, researchers said in July. Crucially, they also found evidence that the hybrids survived – and produced offspring. Nevertheless, the MRI has raised its catch limit on farmed salmon in Icelandic waters to 105,500 tonnes, or 68 million fish – a threefold increase.

“We know what will happen if we reach that figure,” says Kaldal. “Wild salmon won’t stand a chance.”

He sees the escape incident as a “turning point” that could positively influence the public consultation that’s under way before a new aquaculture bill is expected next year. One of the biggest problems, he says, is the lack of independent surveillance.

“The NAO report confirmed what conservationists have been saying for years,” says Kaldal. “The industry has been given a free ride. They do what they want.”

In Iceland, where nature is prized, most people are against open-pen salmon farming. But in the remote Eastfjords and Westfjords, where the industry is based, it has helped breathe life into sparsely populated rural villages, though it only provides about 5.5% of jobs in the region.

A view of Þingeyri, Westfjords

In the tiny port of Þingeyri, Westfjords, where the mountainous landscape dwarfs wooden-clad low houses clustered around Dýrafjörður, most people know someone who works for Arctic Fish. Residents tend to dismiss conservationists as Reykjavík people who don’t understand rural life. House prices have risen – a welcome development – and the fish farms attract incomers.

Shopowner Elísa Björk Jónsdóttir says that without the salmon farms her store would be closed

At a petrol station that becomes the port’s only restaurant when summer fades, Elísa Björk Jónsdóttir says: “It keeps my business afloat through the winter. If it wasn’t for the salmon company, the store wouldn’t be here.” She had heard of the escape.

“I haven’t made up my mind about the risk of extinction of wild salmon. I don’t know if it’s true,” she says.

At the pool, the heart of the port’s 300-strong community, Valdimar Haukur Gislason, 89, a former teacher and now an eider duck farmer, emerges after his morning swim. The population has been falling for years, he says. “The salmon farms are just fine. There’s more employment. Everyone is pro the farms here. It gives people something to do.”

Arctic Fish site manager Bernharður Guðmundsson

On a red and white service boat from the port to one of Arctic Fish’s four sites here, Bernharður Guðmundsson, site manager at Dýrafjörður,insists the company follows all regulations and says his employees had been insulted by conservationists. “Its like we are terrorists or a tobacco company. They want to stop the industry and we lose jobs, but for what purpose?”

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A single pen, measuring 35 metres in diameter, holds between 100,000 and 120,000 fish, more than double Iceland’s wild salmon population. Each site has about 10 pens. Arctic Fish has licences for 21,800 tonnes of salmon in the Westfjords, with two more sites planned.

Asked about official reports that for three months before the escape, three fjords south of Dýrafjörður, underwater inspection of some nets had not been done, Daníel Jakobsson, head of development at Arctic Fish, doesn’t comment on specifics because of the police investigation, but says they are working with the authorities to minimise damage.

“We have been farming for 10 years and this is the first time an incident of this scale has happened,” he says from his office at Ísafjörður, a town in Westfjords.

Jakobsson does not believe the incident has implications for wild salmon. “We have systems in place that ensure wild salmon are not put at risk,” he says. “On top of that, our licences have an expiry date. If we do not behave, we don’t get licences renewed.”

Arctic Fish has licences for 21,800 tonnes of salmon in the Westfjords

However, Svandís Svavarsdóttir, Iceland’s minister of food, agriculture and fisheries, says the escape has had “serious consequences” for native salmon. It is the “unequivocal responsibility” of the permit holder and company to prevent escapes, she says, adding that she had established a taskforce to examine the regulations as part of a review of the Aquaculture Act.

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In Reykjavík, the writer Simen Sætre is at an event organised by clothing company Patagonia, to launch his book The New Fish: The Truth About Farmed Salmon and the Consequences We Can No Longer Ignore. He is disappointed with Iceland’s authorities.

“In Norway, there’s a big problem with fish welfare. In Canada, authorities are facing political pressure to stay away from First Nation areas and to tighten regulation. In the Faroe Islands, the fjords are full. But in Iceland, they are a little naive,” Sætre says.

“I’m surprised they are surprised by the escape of 3,500 fish. They’ve allowed the industry to call the shots and the authorities react. But they always come too late.”
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A chum acting as spokesfish commented on the scales of justice with