The eel wars: Japan and America fight tooth and nail against new protections as some freshwater populations plunge over 90% from the 1980s

CITES delegates met in Uzbekistan to consider adding more than a dozen anguilla (freshwater eel) species — including American and Japanese eels — to the treaty’s protected list, which would have required export permits and non‑detriment findings; members voted against the new protections. Scientists and conservation groups cite declines of more than 90% for some eel species since the 1980s and highlight threats from dams, pollution, climate change and illegal poaching, while industry groups and regulators in the U.S., China and Japan opposed listings as unnecessary or economically harmful. Market-relevant details: Maine’s regulated elver fishery fetched over $1,200 per pound at the docks in 2024 (and over $2,000/lb in 2023), underscoring tight supply for aquaculture seed stock central to the sushi supply chain.

Analysis

Market structure: The CITES rejection leaves a bifurcated market — illicit/elver dealers and regulated aquaculture/farmed substitutes. Short-term pricing power stays with elver suppliers (dock prices >$1,200–$2,000/lb in 2023–24) while demand will shift to scalable farmed proteins (salmon, tilapia) driving incremental revenue for large aquaculture producers and traceability vendors; restaurant margins for eel-heavy menus could compress 100–300 bps if substitution or price pass-through fails.

Risk assessment: Tail risks include a near-term regulatory reversal (national listings or unilateral export bans within 3–12 months), a disease outbreak in substitute species, or a major enforcement action that spikes black‑market premiums. Immediate volatility (days–weeks) likely in spot elver markets; medium term (3–12 months) substitution flows reshape buyer relationships; long term (2–5 years) biological recovery remains uncertain and will keep price floors elevated.

Trade implications: Favor large, liquid aquaculture exposures able to scale substitutes and capture pricing, and providers of traceability/compliance tech; disfavour niche eel processors and importers reliant on wild elvers. Tactical option play: buy limited-risk, 6–12 month call spreads on leading aquaculture names to express substitution without overpaying volatility. Enter positions within 2–6 weeks to capture policy/capture-driven order flows; target 6–12 month exits with 15–25% upside targets and 10–12% hard stops.

Contrarian angles: The market underestimates industry self‑regulation and tech-enabled captive breeding R&D that could halve reliance on wild elvers in 24–36 months, creating a mean‑reversion opportunity in public aquaculture names after any disease-driven pullbacks >20%. Conversely, stricter rules could elevate black‑market prices and temporarily benefit elver middlemen — a volatility trade rather than directional fishery exposure.

Key Decisions for Investors

• Consider establishing a 2–3% long position in MOWI (MOWI.OL) for a 6–12 month horizon to capture substitution demand from high-end sushi buyers; set a target +20% and a stop loss at -12%.
• Add a 1–2% long in Bakkafrost (BAKKA.OL) or another large salmon producer as a hedge against eel supply shocks; hold 6–12 months and scale up +1% if share price dips >15% on sector headlines.
• Reduce or hedge exposure to Japan-based commodity seafood processors (eg, Nippon Suisan 1332.T) by initiating a 0.5–1% short or buying a 3–6 month put spread (10–15% OTM) to protect against margin compression over the next 3–6 months.
• Buy a 6–12 month call spread (15–25% OTM) on MOWI or BAKKA to express upside with defined risk; increase allocation by +1–2% if CITES reopens discussion or a major importer announces unilateral export restrictions within 90 days.