Booming cod market but weaker prices likely

In June, ICES advised that the Barents Sea cod TAC for 2016 should not exceed 805 000 tonnes. This represents a cut of 10% compared to its advice for 2015, which was set at 894 000 tonnes, and is the lowest advice for cod since 2012. In contrast, the ICES advice for the haddock TAC was increased by 35% to 223 000 tonnes. For saithe, ICES proposed 140 000 tonnes for 2016, a 15% increase from 2015.

Scottish cod stocks are said to be recovering, but have been threatened by the large amounts of seals in the region. For years, overfishing was a problem, but this has now been reduced and replaced by increased predation by seals.

According to recent reports, the Newfoundland cod stocks are on their way to recovery, albeit slowly. Recent surveys have revealed that there are new spawning stocks in the northern region. The northern cod stocks off Newfoundland are thought to have more potential than cod in the North Sea.

Trade

During the first quarter of 2015, Norwegian groundfish exports set new records. The skrei (spring cod) landings started late, but have been quite strong. Exports of fresh cod reached more than NOK 1 billion during the quarter for the first time ever. This was partially explained by high prices and a low exchange rate for the Norwegian krone against the US Dollar.

Cod exports reached 64 445 tonnes worth NOK 2.3 billion during the first three months of the year. This represents a massive decline in volume (down from 97 029 tonnes during the same period in 2014), but practically no change in value compared with the same period last year. This meant that the average unit value of cod rose from NOK 23.56 per kg in 2014 to NOK 35.43 per kg in 2015.

Norwegian saithe exports increased both in volume and value during the first quarter of 2015. The exported volume rose from 19 509 tonnes in 2014 to 20 538 tonnes in 2015, and the value of saithe exports rose from NOK 495.4 million in 2014 to NOK 598.2 million in 2015 (+21%).

Strong growth of Norwegian groundfish trade in the first quarter seems to have continued in the second quarter. Norwegian groundfish exports (all product forms) were up by 27% in value in May 2015, with this being the highest value ever recorded for that month. Traditional products like klipfish and stockfish showed very strong growth, and klipfish exports were up by as much as 80% compared with May 2014. Improved prices on the world markets contributed to this increase. Stockfish exports were up by 23%. However, exports of salted fish (wet-salted) went down by 6%.

Norway has had trade problems with China for some years now. For several years, China was the most important re-processing nation for European (and especially Norwegian) cod, but this has changed with the mounting difficulties of getting Norwegian fish into China. It now takes some two months to import fish from Norway, whereas earlier it could be done in a week. Officially, China’s inspection and quarantine service has initiated an inspection programme for Norwegian imports, testing all products before they are admitted to the country.

In 2014, US imports of cod and cod-like species fell by 3.6%. This trend continued into the first quarter of 2015, when US imports fell by 3.1% to 40 900 tonnes. While fillet imports remained stable, imports of blocks and slabs fell by 13%. There were very few changes in the position of the major suppliers. China remains the most important supplier by far, accounting for as much as 75% of total US imports of these species.

UK frozen cod imports fell slightly during the first quarter of 2015 compared with the same period in 2014 (-3.4%). China and the Russian Federation increased shipments to the UK, while Iceland and Norway saw declines in their frozen cod exports to the UK.

German imports of cod fillets increased by 11.3% during the first quarter of the year. China and Poland, the two most important suppliers, strengthened their position on the German market, and during the period accounted for 43% and 29%, respectively, of the total imports.

However, German imports of Alaska pollock fillets, which have been a popular product on the German market, fell from 41 200 tonnes in the first quarter of 2014 to just 34 800 tonnes in the same period in 2015 (-15.5%). Again, China is the main supplier, followed by the USA. Both of these suppliers shipped less frozen pollock fillets to Germany during this quarter.

French imports of frozen Alaska pollock fillets showed signs of growth during the first quarter of this year. Imports were up from 11 200 tonnes in 2014 to 12 800 tonnes in 2015 (+14.3%). Both of the main suppliers, China and the USA, shipped more product to France during this period.

The hake trade in Europe is a bit dull, with no major changes in shipped volumes. German imports of frozen hake fillets increased slightly, from 2 100 tonnes in the first three months of 2014 to 2 400 tonnes during the same period in 2015. Italian imports of frozen hake fillets were at the same level as last year, at 6 100 tonnes. 

Outlook

Total supplies will remain stable for the 2015-2016 season, although with perhaps moderately less cod coming on the market. Total demand seems to be strong, but prices may suffer to a small extent.