In 2014, expected surplus of cod predicts declining prices, whereas haddock and saithe prices forecasted to move up

Supplies of groundfish in 2014 will be marginally higher than in 2013 though there will be major differences from species to species. New markets will likely absorb the extra volumes available, and perhaps more than that. Cod is expected to have a surplus of supplies with prices predicted to decline. Prices for other species, such as haddock and saithe, will increase further.

Recent News

Delays in reaching a fishing agreement between Norway and the EU at the beginning of 2014 cost the EU fleet considerably. Danish vessel owners were especially troubled, as the lack of an agreement put all applications for fishing licences on hold. This, in turn, kept the on-shore processors idle, forcing business to go elsewhere. Norwegian cod exporters benefitted from this situation, as they were able to flood the European market with cod during this period. On the other hand, Norwegian haddock fishers were not happy, as the lack of an agreement denied them access to EU waters for the haddock fishery in the early months of the year.

In a surprise  move this past March, the Danish Fishermen’s Association called for a total ban on EU imports of fish products from Norway to force pressure on Norwegian negotiators. This was largely for effect, as ceasing imports  of raw material from Norway would push a great number of European processors into bankruptcy.

Beginning on the 1 January, the Russian Federal Veterinary and Phytosanitary Surveillance Service imposed strict limits for imports of Norwegian groundfish (cod, haddock, and halibut) as well as for imports of pelagic species (mackerel and herring).

The so-called haddock boom is benefitting North American fishermen. According to Undercurrent News, there has been a dramatic increase in the haddock biomass in Georges Bank, and this is predicted to sustain the haddock fishery there for many years. For 2014 the Georges Bank haddock quota has been set at 16 470 tonnes, a 250% increase over last year, though still a relatively modest quantity (Source: Undercurrent News).

Cod

For the first quarter of 2014, the Norwegian spring cod fishery, often referred to as the ‘skrei season’ has been exceptionally good. Landings of large amounts of cod of very high quality have exceeded previous years, and exports of fresh cod broke record amounts during the first quarter of 2014. Indeed, exports were up by 69% in the first quarter of 2014 compared with the same time period last year, to total 32 700 tonnes. Prices also came up, leading the value of exports to increase to NOK 592 million (+78.2%). Likewise, Norwegian exports of frozen cod attained new record highs, increasing from 16 950 tonnes in the first quarter of 2013 to 30 800 tonnes in the same time period for 2014. The price also rose, with a total export value of NOK 475 million (+92%) (Source: Norwegian Seafood Council, NSC).

The so-called traditional whitefish products (klippfish, stockfish and salted fish) continue to be a very important group of products in Norwegian seafood exports. These products have actually been exported from Norway for over 1 000 years, and are still very favoured in markets in the Mediterranean and South America. Export volumes of klippfish increased by 16% during the first quarter of 2014 compared with the same time period in 2013, to 25 681 tonnes worth NOK 862 million. Exports of salted fish increased by 34% during the first quarter, amounting to NOK 368 million. For the third product in this group, stockfish, exports increased by 36% during the period (Source: NSC).

In Russia, sufficient volumes of domestically caught cod and downward trending prices have been reported for the first quarter. In the northern fishing basin, the catch of groundfish species in the January–March period has generally been good, with significant volumes reported for cod, while amounts of haddock and capelin have been lower due to the decreased national TAC set for these two species.  The catch of cod reached 130 700 tonnes, which is 22 900 tonnes more compared with the first quarter of 2013. Russian caught cod in the wholesale market in Murmansk demonstrated downward price trends and stalled trade as players have not yet adjusted to the shift in prices. 

Alaska pollock

Chinese processors of pollock are hoping for price reductions for this raw material. Before the Chinese New Year, prices roses on expectations of a good season in the Sea of Okhotsk, however, actual volumes were less than expected. Prices are now coming down, but  not enough to help Chinese processors, who are facing rising production costs, especially for labour. The shortage of labour is worse in 2014 than it has been previously and this is forcing processors to offer higher wages.

During the recent North Atlantic Seafood Forum in February, American Seafoods Executive Vice President Rasmus Soerensen was optimistic, however. He expected prices to rise again and soon return to normal levels.

Surimi

During the A season, surimi production in the USA by the end of March was up by just over 11%. At the same time, A season surimi for the European market is being priced 8–10% higher than last year. The main reason for this price hike is that there is a great deal of uncertainty about supplies of surimi from Southeast Asian producers, so European buyers feel forced to secure supplies (Source: Undercurrent News).

On the Japanese market, it is expected that demand for some surimi-based products like kamaboko will slow down further. The new consumption tax of 5–8%, which comes into effect in April, is given as the main reason for this slackening demand.

In the first quarter of 2014, the Russian Pacific pollock fleet became  active again, with fishing picking up rapidly. Already in January, catches of Alaska pollock in the Sea of Okhotsk amounted to over 120 000 tonnes.

Prices

Supplies of haddock have been slowing, and as a result, prices have risen sharply. In the beginning of April, prices for headed and gutted small haddock (line caught) increased to some USD 4 800 per tonne, compared to USD 4 650 per tonne at the beginning of February. Prices for larger sizes are still higher, above USD 5 000 per tonne. Good demand in major markets like the USA, the UK and China is driving prices up (Source: Undercurrent News). Another reason why haddock prices are up is that a number of fishermen are switching to cod and saithe as catches of haddock have been down, while cod is overly abundant this year.

Norwegian operators have been benefitting from haddock’s strong price development. The largest fishing company in Norway, Havfisk, reported that their sale price of haddock was up by an astounding 95% during the fourth quarter of 2013 compared with the last quarter of 2012. Thus, haddock prices have increased more than competing species like saithe and cod. From 2011 until 2013, both cod and saithe prices have been declining noticeably.

Producers of Alaska pollock fillet blocks are facing a decline in prices. In 2013, fillet blocks were offered at USD 3 050–3 200 per tonne, but so far in 2014, buyers are offering only USD 2 950–3 050 only.

There was a slight increase in US imports of cod-like groundfish in 2013 by 2.8% compared with 2012. However, blocks and slabs declined by 5.8%, while fillets increased by 6.1%. By far, China was the main supplier for both of these main products. In fact, in 2013, China accounted for 71.6% of total US imports of cod-like groundfish, which is actually a reduction from 74.1% in 2012 and 83.5% in 2011 demonstrating that China is losing market share on the US frozen groundfish market. While Iceland increased its market share in 2013, it was the unspecified “other” group that increased the most.

There was a significant drop in German imports of frozen Alaska pollock fillets in 2013 (-12.7%) compared with the previous year. China maintained its export volume, increasing its market share from 55.5% in 2012 to 63.8% in 2013. The main loser on the German market was the USA, which accounted for almost the entire drop in German imports.

Frozen cod fillet shipments into Germany, on the other hand, increased by 3 300 tonnes in 2013 (+15.1%) compared with 2012. China is the largest supplier of this product as well, but held less than a 50% share of total imports. Poland and Greenland benefitted the most from increased German imports.

German imports of frozen hake fillets dropped by 10% in 2013 compared with 2012. Imports from Peru (+50%) and Argentina (+15%) grew, while Namibia held its own with a 30% share of this market.

Imports of frozen Alaska pollock fillets into France increased by 13% in 2013 compared with the previous year, and the big winner on this market was Russia, which increased its shipments by almost 105%. Germany also increased its exports to France (+24%). China, on the other hand, had a decline of 12.2% in its exports of pollock fillets to the country.

There was a healthy increase in UK imports of frozen cod in 2013. Total imports went up by 10.6%. Most of the increase was accounted for by China and Iceland, which increased their shipments to the UK by 40% and 19%, respectively. Norway also increased cod exports to the UK, by 27.8%.

Hake is a popular product in Italy, and in spite of the financial crisis, Italian imports of frozen hake fillets went up in 2013 by 9.4%. Namibia shipped a significantly higher amount to Italy (+51.5%), and South Africa saw a slight increase in shipments to Italy (+4.9%).

Outlook

The outlook for the rest of the year is one of  strong supplies, especially of cod. Consequently, prices may suffer, but there will be fluctuations. Haddock prices are expected to increase further, as are saithe prices. The competition on the Alaska pollock market may tighten, and it is expected that some producers may switch to surimi production, in spite of the fact that demand for surimi on the Japanese and European markets is slow. Pollock prices are very low, with some current uncertainty about their movement, thought analysts predict they will rise to normal levels again soon.