The cod quota in the Barents Sea was cut by 20 percent in 2023, and the joint Norwegian – Russian research group for the Barents Sea has advised that it be cut by a further 20 percent for 2024. Landings of Barents Sea cod so far this year have been poor, therefore the supply situation will be tight. Supplies of Alaska pollock, on the other hand, are expected to increase.

Supplies

Cod fishers in the Canadian province of Newfoundland and Labrador were quite disappointed when the Department of Fisheries and Oceans (DFO) in late June announced the quotas for Northern cod for the 2023-2024 season. The quota was set at just 12 999 tonnes, while the fishermen’s organizations had recommended a quota of 25 000 tonnes. Northern cod is the same Gadus morhua that is caught in other areas, but it is generally regarded as being of superior quality with a firmer flesh than when caught elsewhere.

The cod stocks in the Barents Sea are evidently not in as good shape as one would hope. The joint Norwegian – Russian research group for fish stocks in the Barents Sea presented its advice for the 2024 season in late June, which was a total of 453 427 tonnes, 20 percent lower than the 2023 quota. The research advice has been reduced by 20 percent for the past two years.

The researchers estimate that the spawning stock amounts to some 700 000 tonnes. The historic peak in the spawning stock was 2.2 million tonnes in 2013. The reduction in the quota advice is limited by a rule that says that the quota cannot be reduced by more than 20 percent per year.

As of the middle of May, Alaska pollock vessels operating in the state of Alaska had almost filled their A season quota in the Bering Sea. About 100 vessels were operating in the area and had caught some 1.2 billion pounds (544 311 tonnes) of pollock since the season opened on 20 January. That left only 19 504 tonnes of the remaining quota.

US production of Alaska pollock is expected to increase by some 15 percent this year compared to 2022. But there will be some changes in the various product forms. Surimi production is expected to increase from 161 000 tonnes in 2022 to 187 000 tonnes in 2023 (+16.1 percent), while production of fillets/blocks is expected to increase by 29 percent to about 200 000 tonnes. It is expected that fillet production will focus more on deepskin, which is used by fastfood chains like McDonalds.

Markets

Chinese trade figures indicate that more imported Alaska pollock may be consumed in China itself rather than being processed and re-exported to markets in Europe and North America. In 2022, China imported 598 180 tonnes of H&G pollock and exported 208 000 tonnes of fillets and blocks. This represented an increase of 56 percent in imports but only a 19 percent increase in exports compared to 2021.

Prices

While prices for US Alaska MSC-pollock single-frozen blocks have been rising since 2017, they dropped suddenly in the beginning of 2023.

Prices for both single-frozen and double-frozen pollock fillets have been falling rapidly lately. Russian pin-bone-out (PBO) as well as Chinese products have seen price reductions.

On the German market, one of the major discount chains has slashed prices for products based on pollock by as much as 12.5 percent. Lower raw material prices, especially on pollock imported from the Russian Federation, have enabled the discount chains to lower their prices on finished products like fish fingers. Prices are expected to drop further in August or September.

With some 50 – 60 percent of the Icelandic cod quota caught by the middle of June, prices for Icelandic cod were sliding, and will probably stay low until the quota is filled. Then, Icelandic cod prices are expected to sky-rocket until the new season starts in the autumn.

Tighter supplies and good summer demand in the United Kingdom of Great Britain and Northern Ireland have pushed prices for Norwegian  frozen cod to new heights. In June, the average export price for H&G frozen cod to the United Kingdom of Great Britain and Northern Ireland hit NOK 58.05 (USD 5.40) per kg (fob Norway) which is the highest recorded for the past three years or more. 

The Norwegian currency (NOK) has been very weak recently and this has influenced prices in the whitefish market. The USD price for smaller frozen cod has barely moved, but for Norwegian exporters prices in local currency have increased because of the weakening krone (NOK). The Norwegian Central Bank has increased interest rates in an effort to turn this development around, but so far with very limited success. Thus, prices for Norwegian products in USD are expected to remain at present levels or even decline marginally until the NOK rises against major currencies.

Trade

After the start of the conflict in Ukraine in March 2022, the US president issued an executive order to ban imports of seafood and other products from the Russian Federation. However, there was a loophole in the order in that it failed to block Russian seafood that was substantially transformed in another country through reprocessing. Thus, Russian seafood imported into China for reprocessing could legally be imported into the United States of America. This loophole will now be closed if the new US – Russian Federation Seafood Reciprocity Act of 2023, which was introduced  in the Senate Finance Committee on June 15, is passed. 

Chinese customs data show that the country has imported more headed and gutted pollock from the Russian Federation during the first three months of 2023 than in the previous two years. During the first quarter of 2023, China imported 522 127 tonnes of frozen pollock from the Russian Federation, against 361 574 tonnes in 2022. Chinese exports of frozen pollock fillets increased by 5 percent during the first quarter of 2023, to 183 419 tonnes. Chinese exports of frozen pollock fillets to the United States of America rose by 16.8 percent during the period, to 20 967 tonnes. Chinese exports of frozen pollock fillets to Germany rose from 73 194 tonnes during the first quarter of 2022 to 86 385 tonnes during the same period in 2023.

It seems Russian origin pollock is quite popular in German, for direct imports of pollock from the Russian Federation rose significantly in this period. German imports of whole frozen pollock from the Russian Federation increased from 6 431 tonnes in the first quarter of 2022 to 9 518 tonnes in the same period in 2023 (+48 percent), and imports of frozen pollock fillets rose from 4 924 tonnes in 2022 to 7 976 tonnes in 2023 (+62 percent). 

Supplies of cod from Norway are tight this year, and exports are down, both in terms of volume and value. During the first three months of 2023, exports of frozen cod declined by 27.2 percent by value, from 40 872 tonnes in 2022 to 29 774 tonnes in 2023. The export value declined by 14.7 percent, from NOK 1 833 244 (USD 171.7 million) in 2022 to NOK 1 563 110 (USD 146.4 million) in 2023.

Norwegian exports of whole frozen cod during the first quarter of 2023 declined by a massive 39.3 percent to just 15 392 tonnes, compared to 25 361 tonnes in the same period in 2022. Exports to China fell by 57.7 percent, while exports to the United Kingdom of Great Britain and Northern Ireland increased by 17.4 percent.

Imports of whole frozen cod into the Netherlands declined by 24.6 percent during the first quarter of 2023 compared to the same period in 2022. The total amounted to 9 042 tonnes, compared to 11 985 tonnes in 2022. The largest suppliers were the Russian Federation, which accounted for 58.8 percent of the total, followed by Norway with 24.4 percent of the total.

China’s imports of whole frozen cod during the period declined slightly (-4.6 percent), from 25 795 tonnes in 2022 to 24 606 tonnes in 2023. Most of this (53 percent) came from the Russian Federation.

Surimi

US surimi production is expected to increase from 161 000 tonnes in 2022 to 187 000 tonnes in 2023. This represents an increase of 16.1 percent compared to 2022, but it is still below the 2019 production, which was about 200 000 tonnes.

The surimi market was slow during the first months of 2023 both in Japan and in Europe. Apparently, consumers are cutting back on non-essentials, and surimi is one of the products that is suffering. At this time in 2022, demand was booming and prices were high, but this year prices for both US origin pollock for surimi and Asian origin raw material are down by as much as 25 – 30 percent. First quarter sales of surimi in European and Asian markets have dropped by almost 10 percent, and margins have become slimmer for the producers.

The United States of America has lost ground to the Russian Federation in the Asian surimi market. Surimi prices are dropping, and the Russians are able to produce at lower costs than the Americans. Buyers in Asia do not seem to care who they are buying from, as long as the price is low and the quality acceptable.

Outlook

With the expected tighter supplies of cod this year, prices are bound to go up further. For pollock, the situation is quite different, though, and supplies are expected to increase significantly. Consequently, pollock prices are falling, and are expected to fall further in the autumn. Lots of Russian pollock enters the market at low prices. Low raw material prices will translate into lower consumer prices, which will certainly be welcomed for example on the European market, where food prices have sky-rocketed lately.

The surimi market is slack, and not expected to improve much, even with lower raw material prices. The European surimi market has been slow and will probably remain so. The same trends are being seen in the Asian market.