Good groundfish supply on the market - Groundfish prices went down in 2009 and early 2010, as a result of good supply and strong competition from whitefish species such as pangasius on the market. The disruption of air traffic is creating problems for fresh fish sales in Europe. Price increases in this markets are likely, even though demand is slow.

Recovery in Namibian and Peruvian hake

The Namibian hake industry has been given an increase of about 8% to its 2010-11 Total Allowable Catch (TAC) from 135 000 tonnes in the 2009-10 season to some 145 000 tonnes. The global crisis and the strengthening  of the Namibian currency have affected companies’ revenues, but the improvement in the TAC should help to alleviate the economic difficulties of the sector. The Namibian hake industry is worth USD 127.9 million, one fourth of all fisheries in the country.

The Ministry of Production of Peru has set the TAC for hake (Merluccius gayi) for 2010 at 40 000 tonnes. The hake resource is in a state of recovery, which is why it is necessary to reduce the fishing effort until the stock increases to safe levels. 34 500 tonnes of hake were landed in 2009, 25.6% more than in 2008. 11 167 tonnes of hake worth USD 22.2 million were exported in 2009, an increase of 6.4% in volume and 11.8% in value from 2008.

US groundfish imports up, prices plunge

Over the past five years the Alaska pollock catch quota for the Alaskan fishery has been slashed by as much as 45%. During that period, the proportion of surimi was reduced by more than 60% while that of H&G products increased dramatically by 270% mainly because of active demand from China. For 2010, the share of surimi products derived from the US Alaska pollock catch will remain stable at 30% of total landings. This change in the normal pattern is mainly because Japanese surimi buyers are willing to pay relatively low prices for these products, compared with the prices that Chinese re-processors can offer.

Groundfish imports into the US market showed an increase in 2009 (almost 6% from 128 600 tonnes to 135 900 tonnes) compared with 2008 but have not yet recovered to the high levels of previous years. Pollock constituted nearly 60% of the imports, 22% up from the same period of 2008. The 2009 rise reflects not only increased imports by the USA of frozen fillets but in particular an increase in the import of blocks. In fact, in 2009, the quantity of frozen groundfish fillets imported by the US was 89 200 tonnes, only 3% more compared with the 2008 whereas the import of blocks went up by 11%, reaching 46 700 tonnes in 2009. China was the main supplier of both fillets and blocks to the USA with about 84% of total imports of these product forms in 2009. This country has increased its shipments to the USA by 5% (fillets) and 10% (blocks) during this period. China is an important re-processor of Alaska pollock caught by the US and Russian fleets. Thus a good part of US imports from China are US origin Alaska pollock that are re-processed in China.

The US cod market, where prices had been in free fall since December 2008, seems to have stabilized at a low level. Prices were quoted at USD 2.45/lb in April 2010. However, there are indications from the landing sites that this trend is changing and that ex vessel prices in Alaska are rising. Hake fillet prices, which followed the same trend as cod until October 2009 (USD 2.20/lb), suddenly dropped further in November to USD 1.90/lb and to USD 1.80/lb in April 2010. Increased supply from Chile and Argentina contributed to this drop.

The price of Alaska pollock, which declined in June 2009 from USD 2.00/lb to USD 1.93/lb, continued this downward trend for the rest of 2009, reaching
USD 1.85/lb in December 2009 and through to 2010 to USD 1.73/lb in April 2010. This decline came as a surprise in view of the lower Alaska pollock quota in US waters. However, reports of abundant stocks in Russian waters, together with higher imports, put pressure on prices.

In 2009, Japanese surimi imports decreased by
60 000 tonnes from the 2008 level and slumped to 200 000 tonnes mainly because of the pollock quota cutback in the USA, as well as decreased supply from Asian countries resulting from unsettled surimi prices. In 2010, Japanese surimi imports are likely to stay at these low levels.

Lower imports into EU

The main issue in the early weeks of 2010 was how Russia would deal with EU regulations with regard to IUU fishing. For 6 weeks the country was not able to notify the EU which authority would carry out the certification in the Far Eastern region, thus supply of Alaska pollock was difficult, as Russia is presently the main provider of this species to the world market, and European countries are the main importers of Russian pollock. Since 19 February 2010, the Russia authorities have notified the EU which authorities will control the catch certifications, so everything should return to normal in coming months, although landings made prior to 19 February by Russia are still not allowed to be imported into the EU.

Moving on to the European groundfish market, German imports of Alaska pollock fillets, which increased by 7.5% between 2007 and 2008, showed a drop in 2009 of 16% to 148 200 tonnes. As in the US market, China was the main exporter (almost 60% of total) of Alaska pollock fillets to Germany, supplying 4% less compared with 2008 and 9% less than in 2007. The USA, the second main supplier of frozen Alaska pollock fillets to Germany, decreased its exports significantly (-44%) in 2009 compared with 2008.

The producers of value added groundfish products in Germany and the UK are facing some uncertainty with the supply of Alaska pollock. The new IUU regulations and the fact that Russia delayed its notification to the EU of the authority that will prepare the IUU catch certificates has increased worries about supply. China, as the main re-processor of Alaska pollock, is expected to produce catch certificates for all the fish they process, including those coming from imports.

Alaska pollock fillets imported by France dropped to 37 700 tonnes (-9 % ) in 2009 compared with 2008. China is again the main supplier, shipping more or less the same amount of this product to France in 2009 whereas other suppliers, such as the USA (-24%), and the Russian Federation (-18%) decreased their exports to the French market compared with 2008. 

Imports of frozen cod fillets into Germany dropped further, by 42% in 2009 to 11 400 tonnes, because of a sharp decline in Chinese exports (-62% to 4 600 tonnes) as well as reduced shipments from Denmark. The decline in cod imports is surprising, as prices were very competitive in 2009. After the drop recorded in June 2009 (from USD 4.60/kg to USD 4.35/kg), prices recovered somewhat in December 2009.

During 2009, the UK imported 69 300 tonnes of frozen cod, 12% below the corresponding 2008 figure and 20% below that of 2007. This decline can be attributed to the drop in imports from various suppliers such as China (-35.5%) and Norway (-22%). The very strong growth (+36%) in both Icelandic and Russian shipments was not sufficient to move the overall trend in UK frozen cod imports in 2009 into positive territory. The exceptional increase in Icelandic exports of cod to the UK in 2009 can be explained by the fact that the Icelandic government took steps to boost foreign currency income by increasing the cod quota to very high levels, in an attempt to stave off bankruptcy.

The decline in UK cod imports was mainly the result of limited demand. Cod is disappearing from the traditional fish-and-chips shops with sales down almost 10% in 2009. The white fish now being fried in batter is increasingly likely to be Alaska pollock or pangasius from Viet Nam. The name “river cobbler” has been given to pangasius to make it appear more attractive to British consumers. This increase in the use of Alaska pollock and pangasius is a result of the economic downturn as hard-pressed fish shop owners look for cheaper alternatives to cod and haddock.

In 2009, the German market expanded positively with regard to frozen hake fillet imports, which increased by 15% or 23 700 tonnes compared with 2008. USA and Argentina have increased their exports of this product to Germany (by 14% and by 46% respectively).

Italian frozen hake imports were 32 200 tonnes in 2009, an increase of 5% compared with 2008 and 8% over 2007. Argentina, the main supplier was primarily responsible for the increased hake imports into Italy. In fact, Argentina increased its shipments by 17% (to 11 900 tonnes) whereas South Africa supplied the Italian market with the same quantity of frozen hake as in 2008.

Slow demand in Europe

The earthquake in Chile and the strength of the US dollar are affecting seafood purchases in Europe. Less hake from Chile is likely to be available, while other Latin American countries are diverting supplies to the US market. This will probably result in higher prices in Europe in coming months. However, demand seems to be very slow and consumption in Europe has been declining since the beginning of the year.