In just a few days savvy investors will be able to put their money where there mouths are by investing in the world’s first investment fund devoted strictly to fish.
Amundi Japan (which manages a $35 billion fund) is hoping to raise at least $500 million in investment dollars on the back of a booming global appetite for fish. Its pitch is straightforward: As demand for fish grows, the richer those who engage in the industry of fishing become. That includes fishing boat and engine makers, processing plants, chains of seafood and sushi restaurants and, especially, aquaculture or fish farms.
Twinned with the fact that the most-populous countries on the planet – China, India and Brazil – are still growing and growing slightly wealthier, thus more desirous of healthy eating, and it’s looking bad for the planet’s dwindling fish stocks.
That’s not to say there’s not money to be made off fish and all if its ancillary businesses; Amundi’s managers are predicting investors will double their money within six years, as demand continues to grow.
Researchers at Amundi, a merger formed by French-based Credit Agricole and Societe-Generale’s asset management businesses, suggest global seafood consumption will grow from 110 million tons today to more than 132 million tons by 2030. Its public mutual fund will be available for investment beginning August 9 and begin operating on August 20.
The downside, of course, is that as demand for fish goes up the supply goes down. Contrary to some popular opinion, fish are not an infinite resource. Such cynics (realists?) as the World Wildlife Fund predict that at the current rate of taking the world’s bluefin tuna stocks, for example, could expire by 2012 and that all the fish we currently know will be gone by 2050, replaced by fish we currently refuse to take because they are hard to catch or have no taste or jellyfish, the cockroach of the sea.
Critics compare the investment opportunity to offering a rainforest depletion fund or a real estate development project in the middle of a panda refuge.
The so-called “themed investment” fund is the product of investment bankers watching the headlines. “There’s a reasonably good correlation between per capital GDP growth and consumption of fish in emerging markets, which are growing fast with huge populations, so we thought this could be an interesting investment story,” Amundi’s chief investment officer Masato Degawa told the WSJ.
Statistics bear him out: According to the U.N.’s Food and Agriculture Organization, global fish consumption per person has increased to more than 35 pounds a year in 2007 from 23 pounds in 1980. During the same period total production of fish around the globe increased from 72 million to 140 million tons. In China, for example, the average consumption of fish per person increased by nearly five pounds to 58 pounds per person between 2001 and 2007.
The world’s leaders in per-capita-fish-consumption are all in Asia: Despite its rapacious seafood appetite, Japan ranks fourth in the world, with each Japanese eating more than his/her bodyweight in fish, about 155 pounds a year.
The planet’s highest rate is in the Maldives, where each person eats 336 pounds a year! But don’t let those numbers confuse: Japan is still the world’s leader in fish eating. It’s 127 million people eat more than 20 billion pounds of seafood each year, while in the Maldives, its 1,200 islands boasting just 335,000 people, takes just 112 million pounds.
What about the bluefin tuna, which everyone but the Japanese seems to think, is endangered. Tuna fishers and processors are viable investments according to Amundi. “We are not the police,” said Degawa
Some of the news reports of the unique fund as reported in business journals around the globe caution that there may be one potential “sticking point” to the investment: Overfishing.
Hopefully the fund’s salesmen will caution potential investors that if there are no more fish in the sea there won’t be much need for fishing boats, fishing rods or even seafood markets. To that end, Amundi predicts that the bulk of its fish fund investments will be in fish farming, a booming industry, since levels of caught fish have evened off since 1990.
It’s easy to hammer the Japanese about their rapacious attitude towards seafood in general and bluefin tuna. specifically. Though a relatively small country (127 million) the island nation consumes about 30 percent of the world’s seafood take; Japanese processing boats scour the globe non-stop buying up any and all of the much-prized tuna.
Now comes word from Greenpeace that with a little nudging there may be a slight shift in attitude among Tokyo’s man-on-the-street regarding the future of fish.
Timed during Japan’s celebration of “Marine Season” (with one day devoted to honoring the sea and praying for its fishermen), the local Greenpeace branch has published a “red list” suggesting 15 species of fish that should be taken out of the stores and off the table in Japan, including five species of tuna.
According to Greenpeace, “Japan consumes 25 percent of the world’s tuna, including more than three-quarters of the remaining critically endangered bluefin tuna.”
“The ongoing destructive fishing for Pacific bluefin tuna, which begins this month, is only one example of how fishing industries and governments are failing our oceans,” says Wakao Hanaoka, Greenpeace’s Japan spokesperson.
It has been a tough couple weeks for marine life, regulatorily. Representatives of 175 countries gathered in Doha, Qatar, for a meeting of the U.N.’s Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) and voted to protect Latin American tree frogs and an Iranian salamander. What they refused to add to any endangered list were bluefin tuna and several species of sharks. “CITES was always a place where countries came together and based on science, restricted trade for the sake of conservation,” said Susan Lieberman, who directs international policy for the Pew Environment Group and has attended the conference since 1989. “This time, they restricted conservation for the sake of trade.”
Key lobbying against the listings came from Asia; the Japanese will do anything to protect its insatiable appetite for bluefin and the Chinese are for reasons no one other than they can decipher still want to be able to pay loads of cash for tasteless shark fins to dress up an always bland but ritualistic (and expensive) shark fin soup. Both nations – joined by African nations and even the EU (touting concern for its fishermen) – got what they wanted.
Can you say short-term vision? Bluefin populations have declined by 82 percent in the past 40 years and will be gone for good in the very near future. The fishing fleets that the Europeans and Africans say they are trying to protect? They will be completely out of business in a few years, right alongside the bluefin. Why not look forward a few decades and try and keep a healthy fish population alive in order to provide jobs for the long-term rather than allowing fish to continue to be taken without limits thus disappear sooner, and forever.
As for the sharks, in the past 40 years, numbers of many species have declined by 99 percent. There appears to be no end in sight for China’s demand for fins.
Political will on behalf of the environment was completely absent in Doha. The height of cynicism, according to a Washington Post story? The night before the vote on bluefin the Japanese ambassador to Qatar hosted a private reception, with a menu boasting bluefin sushi and sashimi.
If you are a sushi lover with a preference for bluefin tuna, my advice is to eat up during the next couple years because the ocean’s most iconic fish is destined for extinction. (The World Wildlife Fund predicts all bluefin will be gone by 2012; currently we – mostly the Japanese – take 1 million of the big fish each year, out of a total population of 3.75 million, impossible numbers for the fish to adequately reproduce.)
The morning auction of bluefin tuna at Tokyo's Tsukiji market
There had been hope this week at a U.N. meeting of CITES (Convention on International Trade in Endangered Species of Wild Fauna and Flora) that bluefin might be added to the endangered species list, slowing its commercial viability. But today, with the EU opting out of voting (scared to put its tuna fishermen out of business, even after France had intimated it would vote for the ban) and the Japanese pressuring hard, the listing was voted down 68-20. (View a clip from our film-in-progress, “In Pursuit of the Last Bluefin.”)
David Jolly’s report in the NYT: Efforts to ban international trade in bluefin tuna and polar bears were rejected Thursday by a United Nations conference on endangered species, as delegates in Doha, Qatar refused to back the U.S.-backed measures.
A proposal by Monaco to extend the highest level of U.N. protection to the Eastern Atlantic and Mediterranean bluefin, a fish prized by sushi lovers for its fatty belly flesh, failed by a lopsided vote of 20-68, with 30 abstentions, Juan Carlos Vasquez, a spokesman for the U.N. organization, said.
“It wasn’t a very good day for conservation,” Mr. Vasquez said. “It shows the governments are not ready to adopt trade bans as a way to protect species.”
The Convention on International Trade in Endangered Species of Wild Fauna and Flora counts 175 member governments, though far fewer were represented for the votes in Doha. European Union nations, whose fleets are most responsible for the overfishing of the bluefin, abstained from voting.
The rejection was a defeat for environmentalists and a clear victory for the Japanese government, which had vowed to go all out to stop the measure. Japan, which consumes more than three-quarters of the Mediterranean bluefin catch, argued that the International Commission for the Conservation of Atlantic Tunas, or Iccat, an intergovernmental organization, should be responsible for regulating the stock, not the United Nations.
While there is near-universal agreement that bluefin stocks are in danger, Japan’s argument resonated with other fishing nations, which were uneasy about what would have marked the first intrusion by the convention into a major commercial fishery.
But an independent review commissioned by Iccat shows that its own record on managing the fish“ is widely regarded as an international disgrace.” The agency has presided over more than two-thirds decline in the stock since 1970 — with much of that drop coming in just the last decade with the onset of huge industrial fishing operations and tuna “ranching.” And while the organization, which has no effective enforcement mechanism, has the authority to set quotas, year after year it has set the catch above the level that its own scientists say is safe to ensure the health of the species.
Susan Lieberman, director of international policy for the Pew Environment Group, said Thursday’s vote was “ an unfortunate step backwards.” She added: “This deeply disappointing and irresponsible vote signals a bleak future for this iconic fish.”
This is the second time Japan has defeated a proposal at the conference to protect the bluefin. A similar proposal by Sweden failed at 1992 UN convention in Kyoto. While the bluefin vote was held by secret ballot, Japanese officials said this week that China and South Korea also opposed the measure, and Canada openly opposed it.
In a joint statement, Janez Potocnik, the European environment commissioner and Maria Damanaki, the commissioner for maritime affairs and fisheries, said they were “disappointed” with the outcome, and called for Iccat to “take its responsibility to ensure that stocks are managed in a sustainable way.” If no action is taken, they warned, “there is a very serious danger that the bluefin tuna will no longer exist.”
A month ago I reported on the first bluefin tuna of the year sold at auction during the first week of the year at the big Japan fish market Tsukiji, a 513-pounder sold for $177,000, to a trio of sushi entrepreneurs who split the price and the fish, which ended up on restaurant platters across Tokyo and Hong Kong.
Bluefin Tuna at Auction, Tokyo
If the EU has anything to say about it, much of its bluefin – which makes up the bulk sold in Japan — may soon be off-limits to the world market; last week France agreed to join the majority of the 27-nation union to list bluefin as an “Appendix 1” endangered species under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES). With that, bluefin would be afforded the same protection as pandas and whales, effectively banning international trade in the fish. A final decision will be made in Doha next month, at a meeting of the 175 nations signatory to the CITES treaty.
The Japanese, obviously, will oppose the listing. The U.S. hasn’t yet weighed in officially. Bluefin in the same category as pandas and whales? It’s hard to believe, isn’t it? But the statistics are stunning: Since 1978 the bluefin population in the Atlantic has dropped by 82 percent, largely due to the global boom in sushi, a burgeoning demand in Japan. About one million big bluefin are caught each year (out of a total global population under four million) and eighty percent are sent straight to Japan.
Of course adding the fish to a list will hardly insure it’s future (think whales in the Southern Ocean, despite international bans on all whale hunting). It’s not a perfect solution. Banning bluefin will take a toll on fishermen around the world; experts also warn that the banning of trade would not end the sale of tuna in restaurants and stores. Of the other species, including yellowfin, skipjack, bigeye and albacore, the skipjack is the only one not suffering from serious population decline linked to overfishing. One problem with banning bluefin is that it will increase pressure on the other tuna species.
The U.S. fishing industry – especially the American Bluefin Tuna Association – is “strongly opposed” to the listing. Its executive director suggests it will lead to a sizable black market, “in fact, we believe a listing has the possibility of doing more damage than good.”
In the first few days of each new year, the first bluefin tuna sold at the world’s largest fish market – Tsukiji – goes for record prices. This year’s version, bought by a trio of sushi restaurants (two in Tokyo, one in Hong Kong) sold today for $177,000. The three restaurants will split the big fish into thirds and for a week starting tomorrow each will have lines of sushi-lovers lined up around the block waiting to get in. Not because it’s necessarily the best tuna of the year, but the first.
As the Associated Press reports, the 513-pound (233-kilogram) fish was the priciest since 2001 when a 440-pound (200 kilogram) tuna sold for a record 20.2 million yen ($220,000) at Tokyo’s Tsukiji market.
Caught off the coast of northern Japan, the big tuna was among 570 put up for auction Tuesday. About 40 percent of the auctioned fish came from abroad, including from Indonesia and Mexico.
Japan is the world’s biggest consumer of seafood with Japanese eating 80 percent of the Atlantic and Pacific bluefins caught. The two tuna species are the most sought after by sushi lovers. However, tuna consumption in Japan has declined because of a prolonged economic slump as the world’s second-largest economy struggles to shake off its worst recession since World War II.
”Consumers are shying away from eating tuna … We are very worried about the trend,” a market representative told the AP.
Apart from falling demand for tuna, wholesalers are worried about growing calls for tighter fishing rules amid declining tuna stocks.
The International Commission for the Conservation of Atlantic Tunas in November slashed the quota for the 2010 catch by about one-third to 13,500 tons (12,250 metric tons) — a move criticized by environmentalists as not going far enough.
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