The Groundfish Forum expects slightly tighter supplies of groundfish in 2015, with about 100 000 tonnes less cod, but almost 130 000 tonnes more Alaska pollock.

The main impact on the groundfish market may be caused by the Russian import ban on western seafood, which is already creating a difficult situation. Prices for cod are expected to rise.

The Groundfish Forum met in October 2014 and published some very interesting forecasts for 2015. They predict a slight drop in landings of Atlantic cod, from 1.334 million tonnes in 2014 to 1.233 million tonnes in 2015. Alaska pollock, in contrast, is expected to increase from 3.256 million tonnes in 2014 to 3.385 million tonnes in 2015. If all the major groundfish are included (Atlantic and Pacific cod, Alaska pollock, haddock, saithe, redfish, hoki, southern blue whiting and all hakes), total groundfish landings in 2015 are expected to be 7.078 million tonnes, down fractionally from 7.092 million tonnes in 2014.

The Russian ban on seafood imports from western countries (the EU, USA, Canada, Norway and Australia) went into effect on 7 August 2014, and changed the trading game noticeably. Russia has traditionally imported large quantities of fish from the west, and in order to offset the effect of the ban, the Russians are now trying to keep their own domestic catches inside the country as a replacement for imports. The Russian market for headed and gutted cod and haddock is estimated at 120 000 tonnes annually. In addition, there is a demand for about 8 000 tonnes of cod and haddock fillets. As a result of this competition, prices have come up for H&G cod and haddock.

In late October to early November pollock prices also rose as a result of this, and prices paid by Chinese processors approached USD 1 700 per tonne, compared with USD 1 480 to 1 540 a month earlier. Chinese processors are finding the situation very difficult to deal with, and many of them are not turning a profit in the present situation.

This situation is having an effect on prices for Pacific cod as well. According to sources at Minato-Tsukiji, prices for Pacific cod have soared, and demand is strong not only in China but also in the EU and the USA.

Cod

In October Norway and Russia set the 2015 TAC for cod and haddock in the Barents Sea. The cod quota was set at 894 000 tonnes, a reduction of 99 000 tonnes compared with 2014. The haddock quota was set at 178 500 tonnes, the same as in 2014, but higher than the ICES recommendation of 165 000 tonnes.

The cod stocks in the Gulf of Main on the US east coast are under pressure again, but the authorities have so far failed to take action to rectify the situation. Apparently scientists, conservationists, regulators and fishermen could not agree on what measures to take. Last year, NEFMC (New England Fishery Management Council) reduced the quota for cod in the Gulf of Maine to just 1 550 tonnes. With no firm action taken, cod might disappear from the region again.

The skrei fishery in the Vesterålen and Lofoten region in northern Norway is an annual highlight for cod lovers in Europe. The fishery starts in January and ends around Easter. Skrei is Barents Sea based cod, which comes down to the Lofoten region to spawn every year and is considered the highest quality cod that can be found. For 2015, it is expected that the fishery will be record high again. Scientists are predicting a large amount of cod coming in to the coast, and expect a record catch, “perhaps the best ever recorded”.

The Norwegian Seafood Council has marketed this product for years, and international interest in skrei is growing. For some time, fresh skrei has been sent to European cities such as Paris, Berlin, and London, but it is now also flown to New York.

In spite of the cold diplomatic relations between China and Norway, Norwegian exporters have great expectations for Norwegian cod on the Chinese market. According to an analysis undertaken by the Norwegian Seafood Council (NSC), there are about 30 million wealthy Chinese consumers that could be targeted. In addition, some 2 500 restaurants are expected to be interested in including Norwegian cod on their menu. NSC expects to sell 20 000 tonnes of high quality cod on the Chinese market within three to five years. NSC has already test-marketed cod in cooperation with Chinese chefs and the results are very promising.

China is already an important processor of European cod. Until now, much of this processing has been based on low labour costs and cheaper products, but now some processors believe it is worth targeting the high-quality, high-priced market in China as well. To some extent, this can be seen as a response to the present situation, where cheap pollock products are under pressure because of price.

Prices for frozen-at-sea (FAS) cod and haddock are quite firm in the UK at the moment, and observers believe that there is no room for price increases on this market.

Trade

USA imports of cod-like groundfish during the first nine months of 2014 were just slightly above the 2013 levels. A total of 88 800 tonnes of fillets were imported, and 28 500 tonnes of blocks and slabs. The main supplier by far is still China, which accounted for 69.5% of the fillets and 87% of the blocks/slabs. Other major suppliers include Russia, Iceland and Canada.

Germany also showed a slight (+6%) increase in imports of cod fillets during this period. China is the main supplier to Germany, accounting for 44% of all imports, followed by Poland, accounting for 22%.

On the UK market, there was a marginal decline in imports of frozen cod during the first nine months of 2014. Total frozen cod imports amounted to 67 300 tonnes, compared with 69 600 tonnes in the same period in 2013. The main supplier also to the UK was China, accounting for 28.5% of total imports. However, other main suppliers had good market shares as well: Iceland 19%, Norway 15.6%, and Russia 13.4%. China actually increased its market share, mainly at the expense of Russia, Faroe Islands, and Denmark. 

Alaska pollock

Prices for pollock roe in Seattle are down by about 7%, according to a report in UndercurrentNews. This was roe from the closing of the 2014 B season, which ended in October 2014. The main reason for the price reduction was abundant supplies throughout the year. The total output in 2014 amounted to about 60 000 tonnes in Alaska and Russia, being the largest production in ten years.

A Russian producer now seems a very good prospect for H&G pollock on the Russian market, especially in view of the import ban imposed in August. The Russian market for H&G pollock is estimated at 200 000 tonnes in 2014, but some operators see a huge growth potential, perhaps to as much as 350 – 400 000 tonnes. The Russian domestic market will have to be served to a much greater extent by domestic landings than at present, and this could have some long-term effects on international groundfish trade.

Imports of frozen Alaska pollock fillets into Germany went up by 3.8% during the first nine months of 2014. The main supplier, China, suffered a 5.2% decline in shipments, while exports from the USA increased substantially (+34.5%). For other suppliers there were only minor changes.

French imports of frozen Alaska pollock fillets declined slightly (-7%) during the first three quarters of the year. Also in France, China suffered a setback, as did Russia, while the USA registered a small increase in shipments.

Hake

In Chile, the hake quota was increased by 4 000 tonnes, to 23 000 tonnes, in spite of the scientific committee’s recommendation of a limit of 19 000 tonnes. The reason for this increase was partly that fishermen staged violent protests in response to plans to reduce the quota.

The Higher Council for Scientific Research in Spain announced that they see an improvement in the hake stocks on the Galician coast. The European hake has been heavily exploited, and since 2005 a marked decrease in the biomass has been noted. The new findings are therefore most welcome.

The Russian import ban has had a marked effect on Russian hake imports already. Despite very active sales and strong increases from exporters in China and Ecuador, import volumes of hake dropped by 52% in October. China more than doubled its hake exports to Russia since the ban went into effect.

Imports of frozen hake into Italy declined by almost 15% during the first three quarters of 2014, to 24 000 tonnes. Namibia lost market share,,shipping only 3 100 tonnes during this period, compared with 4 400 tonnes in 2013. The USA increased shipments of frozen hake to Italy from 2 600 tonnes in 2013 to 4 500 tonnes in 2014 (+73%).

Germany, which imports smaller quantities of hake fillets, saw no change in the total imported volume in 2014. Total imports of frozen hake fillets amounted to 7 400 tonnes, the same as in 2013. However, over the past six years, there has been a significant decline in German imports of this commodity, from 14 700 tonnes in 2009 to just 7 400 tonnes in 2014. The main suppliers are Peru and Namibia.

Surimi

Since 2012, there has been a shift among surimi buyers in Asia away from local, “tropical” surimi, to Alaska pollock surimi. This trend is now expected to be reversed, according to UndercurrentNews. The main reason for this may be price, as tropical surimi (“Itoyori”) is using lower priced fish as raw material. In South East Asian markets, transport costs also play a role, as there are shorter distances to carry the tropical surimi to these markets.

The Future Seafood Group has published some estimates of world surimi production and consumption for 2013. Total world surimi market was estimated at 820 000 tonnes (raw material volume), while the market for surimi products was estimated at 3 million tonnes (finished product). Production was increasing at about 2% per year, while consumption (demand) increased at 3.5%. This has created low inventories and put some pressure on prices. In Japan inventory levels are now very low.

Japan imported more than 100 000 tonnes of pollock surimi during the first 11 months of 2014. This represents an increase of 22% compared with the same period in 2013. USA imports of pollock surimi, which declined by 32% in 2013, also went up by 22% during the first 11 months of 2014 to 104 701 tonnes.

Prices

On the US market, prices have been stable for some time. However, prices examined are only until the end of September, so the full effect of the Russian important ban had not been felt yet. Norwegian export prices, on the contrary, have been reported through December and they show rising prices for whole frozen cod for all products.

Outlook

It is obvious that trade patterns may change significantly as a result of the Russian import ban on western fish. It is also probable that the price increases registered so far will continue. The slightly lower supplies of groundfish predicted for 2015 may drive prices upwards. This may be especially true for cod products.