Potential effects of climate change on the price volatility of fishmeal and salmon

This project is on the potential effects of climate change on the price volatility of small pelagics, the main source of fish for the fishmeal. The fishmeal production depends heavily on fisheries, and in the last decades, concerns about overfishing and climate changes have been increased. The small pelagic fish group comprises short-lived fish, highly depended on the oceanographic conditions. Therefore, they are more susceptible to impacts of potential changes in fisheries pattern due to climate change, leading to challenges in the aquaculture industry. All economic activities includes a degree of risk, but fisheries presents high degree of uncertainty not only concerning the production, but also to the prices received for it. Considering prices as the outcome of the interaction of demand and supply, then price volatility may be used as a proxy or indicative measure of price risks: the higher the volatility, the higher the risk. Therefore, the analysis consists in using the price volatility of small pelagic fisheries to identify potential outcomes, considering climate change, for the aquaculture industry. As specific outcomes, it is expected to provide the price volatility of small pelagic group used for fishmeal and its development over time. These results may help the aquaculture industry to better adapt, in the context of climate changes, to the market and production reaction in relation to possible management measures. The uncertainty associated with the stock availability and prices received for it in the fisheries activities is a key aspect to be considered for the decision-makers. The adaptation to climate change will need to be flexible enough to account for not only changes in stock distribution and abundance, but also for the costs associated to the adaptation.