Landings in 2022 appear to be slightly below landings in 2021. The outlook for 2023 is a further slight reduction in supplies. Atlantic cod and haddock are expected to reach about 930 000 tonnes and 308 000 tonnes, respectively, while landings of saith are expected to grow to 370 000 tonnes.

Supplies

So far in 2022, groundfish landings are set to be slightly below those of 2021. Atlantic cod is expected to reach almost 1.1 million tonnes, haddock some 304 000 tonnes, and saithe about 345 000 tonnes. In sum, this amounts to 1.7 million tonnes for 2022, a reduction of about 75 000 tonnes compared to 2021.

Markets

The European Union market is heavily dependent on imports to satisfy its demand for whitefish. A recent study published by the European Union Fish Processors and Traders Association concluded that this dependence is growing for most species. The apparent demand for whitefish in the European Union was estimated to be 2 563 000 tonnes in 2021, and as much as 2 397 000 tonnes (94 percent) were imported.

Of course, import dependency varies from species to species. For cod, it is estimated that the European Union market in 2021 amounted to some 891 000 tonnes, and the import dependency was about 95 percent and growing. The largest cod suppliers to the European Union were Norway (36 percent of imports), Iceland (24 percent) and the Russian Federation (17 percent).

The European Union market for saithe was estimated at 169 000 tonnes. Import dependency was a little less, 88 percent, and the main suppliers were Iceland (39 percent), Norway (33 percent) and the Faroes (14 percent).

The hake market was estimated at 516 000 tonnes. European Union import dependency was estimated to be 87 percent and the main suppliers were Namibia (38 percent), South Africa (18 percent) and Argentina (17 percent).

The European Union fish Alaska pollock, so import dependency was 100 percent. European Union imports accounted for some 808 000 tonnes of Alaska pollock in 2021, and the main suppliers were the United States of America (38 percent), China (35 percent) and the Russian Federation (25 percent).

Haddock is a relatively small species for the European consumer. The European Union market is estimated at 45 000tonnes per year, and import dependency is 67 percent. Major suppliers were Norway (52 percent), the Russian Federation (18 percent) and Iceland (13 percent).

Trade

Chinese imports of whole frozen cod are stable at around 62 000 tonnes during the first half of the year. Over 55 percent of imports during this period came from the Russian Federation, while 28 percent came from Norway. Chinese imports of frozen cod declined from 2020 to 2021 and are now pretty stable at the 2021 level.

Chinese exports of frozen cod fillets increased slightly during the first half of 2022 compared to the same period in 2021. Exports were up by 6.1 percent in total, but exports to the United States of America increased by a solid 18.8 percent. By contrast, exports to the United Kingdom of Great Britain and Northern Ireland and Germany were slightly down.

After a strong decline in imports of whole frozen Alaska pollock into China in 2021, imports increased by over 100 percent during the first half of 2022 compared to the same period in 2021. However, volumes are still a bit short of imported volumes in 2020. Over 92 percent of the imported volume came from the Russian Federation, and imports from this country were up by 108.5 percent to 314 315 tonnes. Imports from the United States of America were also up significantly by 51 percent to 15 279 tonnes.

However, the corresponding exports of frozen Alaska pollock fillets have not yet increased. Exports of frozen Alaska pollock fillets during the first half of 2022 were actually down by 2 percent to 78 994 tonnes. However, exports to the main markets (Germany, the United States of America and France) were up by 5.6, 7.5 and 14 percent, respectively. The export decline may be due to a greater domestic consumption or a time lag as processing has taken some time, and increased exports will be registered later in the year.

The Russian Federation registered a massive increase in exports of whole frozen Alaska pollock during the first half of 2022 compared to the first half of 2021: the export volume increased by almost 104 percent to 566 743 tonnes. Of this, 55.5 percent went to China, while 34.1 percent went to the Republic of Korea.

Norwegian exports of whole frozen cod were up by 23.5 percent by volume during the first half of 2022 compared to 2021 and amounted to 41 002 tonnes. Exports to China shot up by 51.6 percent to 16 189 tonnes, accounting for almost 40 percent of the total. In addition, prices went up sharply, so the value of exports went up by 74 percent to NOK 1.84 billion (USD 184 million).

Imports of frozen cod into the Republic of Korea have risen steadily since 2018 but seem to be levelling off in 2022. Imports during the first six months of 2022 amounted to 19 118 tonnes, which was 2 500 tonnes above the amount imported during the first six months of 2021. Imports have shown steady growth from 7 000 tonnes during the first six months of 2018, to 9 500 tonnes in 2019, and 10 400 tonnes in 2020.

Surimi

US exports of frozen surimi to Japan declined in 2022. In the first half of 2022, some 21 700 tonnes were exported, down from 25 400 tonnes in the same period of 2021. In the third quarter of the year, exports increased again, and total exports in the first nine months of 2022 were 44 000 tonnes, just 2 000 tonnes short of the same period in 2021.

Export prices for pollock surimi from Alaska are still on a rising trend. Since 2017, export prices have risen by nearly 30 percent. Production has declined, though, and this is probably the main cause of the price increases.

While Alaska pollock is improving its image among US consumers, who regard it as a safe, sustainably harvested seafood product, surimi made from Alaska pollock is a different matter. Most US consumers regard it as “imitation crab” and “not a real seafood product”.

Prices

Prices for Norwegian frozen cod on the UK market have shown a steadily increasing trend since the beginning of the year, and in June 2022 the export price for whole frozen cod was almost 60 percent higher than in June 2021. 2021. Prices for frozen cod peaked at the end of July when they hit NOK 53 per kg. But the following week prices declined a little. Average exports prices for frozen cod (fob Norwegian border) during the first half of 2022 were NOK 44.88, compared to the average of NOK 31.77 per kg for the first half of 2021.

Demand for frozen cod is strong in the United Kingdom of Great Britain and Northern Ireland, and much of the imports come from Norway. During the first half of 2022, Norway exported 4 978 tonnes of whole frozen cod to the UK market, compared to 3 933 tonnes during the same period in 2021 (+26.6 percent). The increase was even greater by value: from NOK 148.4 million in 2021 to NOK 247.7 million in 2022 (+66.9 percent).

Outlook

The Groundfish Forum recently published its annual forecasts for the 2023 groundfish production. A slight reduction in total supplies is expected, and there may be a 20 percent reduction for Atlantic cod. Whether this will lead to further price increases is uncertain, as much will depend on world economic developments.

At the recent meeting of the Groundfish Forum in Seattle, projections of whitefish catch in 2023 were presented. Overall, total groundfish landings are expected to decline slightly in 2023, by 0.9 percent to 6.9 million tonnes.

Atlantic cod is expected to decline by some 13.4 percent to 929 000 tonnes, while Pacific cod is also expected to decline slightly from 384 000 tonnes in 2022 to 379 000 tonnes in 2023. On the other hand, Alaska pollock landings are expected to remain roughly the same as 2022 levels, from 3 341 tonnes to 3 354 tonnes in 2023 (+0.3 percent). A 1.3 percent increase is expected for haddock, from 304 000 tonnes in 2022 to 308 000 tonnes in 2023. For saithe, a slightly higher increase is foreseen from 345 000 tonnes in 2022 to 371 000 tonnes in 2023. Hake is expected to increase from 1 179 000 tonnes in 2022 to 1 230 000 tonnes in 2023. Cape hake supplies are expected to remain stable, but vendors in southern Africa are expecting high prices in the next year.

In mid-September, the joint Norwegian-Russian research group for fish stocks in the Barents Sea recommended that the 2023 quota for cod in the Barents Sea should be reduced to 566 784 tonnes. This is a 20 percent reduction compared to the 2022 quota. The cod population has been declining for several years, but an administrative rule says that the quota cannot be reduced by more than 20 percent in a year. In 2022, the quota was also reduced by 20 percent compared to the previous year.

While the supply outlook for the coming year looks fairly stable, it must be noted that supplies of Atlantic cod will be tighter, and prices could rise further from an already high base. However, much depends on the world economic development. The outlook is uncertain to bleak at the moment, and a slow-down in world economies could weaken demand and push prices down.

The price developments for groundfish will depend more on the development of world economies than on any supply changes. As total whitefish supplies are expected to remain fairly stable, one would expect that prices would also remain stable. However, with the expected negative development of many economies in the months ahead, consumer purchasing power may be reduced, affecting demand and prices over the coming 12 months.

With the conflict in Ukraine continuing, the Russian Federation faces the prospect of even greater isolation. Consequently, the country has shifted its exports to China at a higher rate than in the past. However, Germany is still trading with the Russians, but for how long is uncertain. At any rate, most Russian cod and Alaska pollock is already finding its way to China, and this will continue.