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GLOBEFISH - Information and Analysis on World Fish Trade

Strong groundfish supply situation, high cod prices and weak Alaska pollock prices


Supplies are expected to be strong in 2017, with relatively high quotas for cod and higher quotas for Alaska pollock. Cod is predicted to do well in the market, fetching high prices, while Alaska pollock prices will remain low.


The European Commission has proposed to cut the quota for Baltic cod by a dramatic 39 percent for 2017, to 24 927 tonnes. This is based on scientific advice and is in line with the newly adopted Baltic management plan. Fishers in the area are upset over the cut, claiming that the quota reduction will particularly affect small-scale fishers. The cod stocks in the Baltic have been in trouble for years, but as a result of management initiatives the resource now seems to be on the right path again. Nevertheless, the EU Commission feels preservation measures should continue in 2017.

The International Council for the Exploration of the Sea (ICES) has recommended that Norway and the Russian Federation cut the 2017 quota for cod to 805 000 tonnes, down from 894 000 tonnes in 2016, which would be nearly a 10 percent cut compared with 2016. However, Norwegian and Russian Federation authorities, who jointly manage this resource, were inclined to increase the 2017 quota by 10 percent, to 983 000 tonnes. In the end, the two countries settled on a 2017 quota of 890 000 tonnes, just a slight reduction compared with 2016.
The haddock quota for the Barents Sea for 2017 was set at 233 000 tonnes, which represents a reduction of 10 000 tonnes compared with 2016.

The Russian Federation has decided to increase its 2017 quota for Alaska pollock by 3 percent to 1.89 million tonnes. Of this, 1.07 million tonnes will be allocated to the Sea of Okhotsk and 807 100 tonnes to east Kamchatka and the Kirill Islands.

For the overall forecast for 2017, the Groundfish Forum meeting in Hamburg in October 2016 portrayed a strong supply of wild whitefish, which is expected to amount to just over 7.2 million tonnes. This is a slight (-1.4 percent) reduction compared with 2016, but a 3.9 percent increase compared with 2015.

A continuing issue for 2017 and beyond will be the growing competition from farmed whitefish. According to estimates published by Rabobank in November, farmed whitefish production will grow to 12 million tonnes by 2020. The main species will be Vietnamese pangasius and Chinese tilapia, and the main target markets will be USA and Europe. However, as much as half of the production is estimated to be consumed locally in Asia.

Over the past few years, it is becoming clear that farmed whitefish does not majorly compete with wild-caught whitefish, as these products target different market niches. However, the lower end of the wild-caught whitefish market (such as cheap whitefish fillets"and blocks) seem to be somewhat affected by farmed whitefish. Thus, farmed whitefish production will likely put some pressure on the global whitefish market, probably resulting in the weakening of some wild-caught whitefish prices.

It is also important not to overlook the possibility of further diversification of the whitefish market. For example, growing demand for high-quality whitefish, both in the USA and Europe, and recently also in Asia, could be a major opportunity for wild-caught cod. This could also lead to a wider diversification of prices.

Landings and processing

Beginning in early 2000, an increasing amount of whitefish was landed frozen in Norway, with this trend peaking in 2013. Since then, the trend seems to have reversed with Norwegian vessels now landing more fresh fish, especially the coastal fleet. The large, ocean-going fleet is freezing on board and landing high-quality, frozen-at-sea (FAS) products. Improvements in handling fish on board and after landing have contributed to the increased landings of fresh fish. The trend is certainly benefitting the on-shore industry, which normally has problems obtaining enough raw materials for production.


Germany remains a main market for Alaska pollock, and the Genuine Alaska Pollock Producers Organization has launched a campaign to further promote Alaska pollock in Germany. The initiative includes a broad information campaign, including the launch of a new web site (www.alaska-seelachs.de). The campaign hit the media in January and will to a large extent focus on health benefits, sustainability and quality.

Inspired by the country's salmon industry, Norwegian whitefish catchers are now focusing more on downstream activities. Whitefish catchers like Havfisk, which holds the largest whitefish quota in Norway, are joining forces with major salmon exporting companies, like Lerøy Seafood Group, to fine-tune their sales of whitefish. The focus is very much on quality, and the whitefish catchers have been successful in introducing their FAS products, which compete favourably on quality with fresh fish. This new orientation may lead to higher prices for a number of high-quality, FAS whitefish products.

It was expected that Brexit would make it more difficult for Norwegian exporters of whitefish to operate in the UK market. However, no change has yet been registered. The weakening of the British pound, which has fallen nearly 20 percent against the US dollar, has made Norwegian cod more expensive in Britain, but apparently sales have not really been affected yet. Instead, the amount of fish going from Norway to be processed in the UK, or being shipped by way of east European countries with the UK as the final destination, is actually increasing.

Asia is waking up to the benefits of cod, both for Atlantic and Pacific. For instance, The Alaska Seafood Marketing Institute (ASMI) sees opportunities to market cod and Alaska pollock in the Republic of Korea. The Norwegian Seafood Council (NSC) is reporting growing interest in Atlantic cod in China as well as in Southeast Asia. ASMI recently headed a US trade mission to the Republic of Korea, where cod and Alaska pollock were promoted. At a conference in Qingdao, China, the NSC recently marketed cod. According to the NSC, Norwegian exports of cod to China increased by 50 percent during the first nine months of 2016 compared with the same period in 2015.
In the USA, imports of cod-like groundfish have stagnated during 2016. The total import volume during the first three quarters of 2016 was exactly the same as in 2015. However, while imports of fillets increased by 8 percent, imports of blocks and slabs declined by 26.3 percent.

German imports of Alaska pollock fillets declined slightly (-5.6 percent) during the first three quarters of 2016, but German imports of frozen cod fillets increased from 25 700 tonnes to 28 300 tonnes (+10.1 percent).
In the UK, there was only a very moderate increase in imports of frozen cod during the first three quarters, from 68 200 tonnes to 69 900 tonnes (+2.5 percent).

China's role in the whitefish trade has grown rapidly over the past decade, and it appears that it is still growing, at least with respect to cod. During the first three quarters of 2016, China's imports of whole frozen cod increased by 15.6 percent to 156 100 tonnes. Main suppliers included the Russian Federation, Norway and Greenland, all showing increased shipments to China, while there was a decline in shipments from the USA. China's exports of frozen cod fillets during the same period increased by 7.7 percent, to 98 100 tonnes. The main markets were the USA and the UK.

For Alaska pollock into China, there was a moderate decline in activity. Overall, Alaska pollock imports into the country fell by 6.3 percent, and exports of frozen Alaska pollock fillets fell by 1.2 percent.
The Russian Federation exported less frozen Alaska pollock in the first nine months of 2016 compared with the same period in 2015. Exports fell by 2.8 percent to 593 900 tonnes. At the same time, Russian Federation exports of whole Pacific cod increased markedly from 48 400 tonnes to 76 200 tonnes (+57.4 percent).


After a long period of stagnation, the Alaska pollock industry is concerned about low prices. Inventories are building, and the Americans are also expecting stronger competition from the Russian Federation as they have been improving the quality of their Alaska pollock. The increased quotas are not aiding the situation as more Alaska pollock will be landed, and will likely end up in cold storage for some time. The US total allowable catch (TAC) increased from 1.39 million tonnes in 2013 to 1.61 million tonnes in 2016.

In an effort to improve prices for Alaska pollock, producers are now looking at the potential for developing and introducing new products.

For Atlantic cod, prices for headed and gutted (H&G) are edging upwards as the 2017 quota for the Russian Federation and Norway has been set at 890 000 tonnes. This means there will be no increase in cod from these two suppliers, and since demand for cod is strong, prices will probably creep further upwards.
Prices are also on the rise for Pacific cod. Prices firmed up during the B season and observers are expecting these Pacific cod price increases to be a longer-term trend as the market seems to accept the growing prices without issue. In addition, both Barents Sea cod quotas and Pacific cod quotas will be reduced in coming years, while demand will continue to be strong.


The groundfish outlook for 2017 appears to be bright. Total supplies will remain relatively strong, and cod prices are expected to be high, while Alaska pollock prices are low and expected to remain so. New product development is now sorely needed, especially for the Alaska pollock sector. In the longer term, some competition from farmed whitefish is expected, although this will be varied by product type. In addition, farmers of freshwater whitefish will have their own issues to focus on, including pollution, drug use and quality.


The report analyses the market situation over the period January-December 2016

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