Forecasts indicate over 11 percent more Atlantic cod in 2021, while landings of Alaska pollock will be about the same as in 2020. However, a present shortage of raw material for surimi may push prices up. Prices on the US market may rise because of the United States of America – China trade conflict, which is expected to linger on.

Supplies

In October, the Groundfish Forum released its forecast for groundfish landings in 2021. Total supplies are expected to increase by 4.3 percent to 7.6 million tonnes. This includes all the major commercial whitefish species (Atlantic cod, Pacific cod, haddock, hoki, Alaska pollock, hake, saithe, Atlantic redfish and southern blue whiting).

The largest increase is expected for Atlantic cod and haddock. Cod is expected to increase by 11.1 percent to 1.251 million tonnes, while haddock will most likely increase by 9.8 percent to 360 000 tonnes. Most of the increase in cod landings will be in Norway and the Russian Federation, while Icelandic cod landings are expected to fall. For haddock, the increase will also be in Norway, the Russian Federation and Europe. US and Canadian landings of haddock are expected to fall.

Pacific cod catches will decline by 7.8 percent to 365 000 tonnes. Most of this decline is accounted for by reduced US and Canadian landings (from 160 000 tonnes in 2020 to 119 000 tonnes in 2021), while Russian catches are expected to increase by 6.4 percent to 182 000 tonnes.

The largest species, Alaska pollock, is expected to increase by 3.8 percent to 3.6 million tonnes.
Practically all of this growth will be accounted for by the Russian Federation, which is expected to land 1.9 million tonnes of Alaska pollock next year. Catches in the United States of America, Japan, the Republic of Korea and others are expected to remain stable. Hake catches are expected to rise from 1.173 million tonnes in 2020 to 1.207 million tonnes in 2021. All major hake catching nations will see modest increases. These are the forecasts. The quotas and the actual landings may tell a slightly different story.

Norway and the Russian Federation have reached an agreement on the quota for northeast Atlantic cod for 2021, and set the total at 885 600 tonnes, up 20 percent from 2020. Of this, Norway will be allocated 397 635 tonnes, with the Russian Federation and third countries taking the rest.

The US North Pacific Fishery Management Council (NPFMC) has recommended that the Alaska pollock total allowable catch (TAC) for 2021 be set at 1.375 million tonnes, a 3.5 percent reduction compared to 2020. The formal decision will be taken by the US Department of Commerce (USDC), but it is extremely rare that USDC does not follow the Council’s recommendations.

The 2020 B season for Alaska pollock finished with lower output than in 2019. It was estimated that the fleet only caught about 94 – 95 percent of the 757 651 tonnes quota allocation for the B season, which ran from 10 June-31 October. Compared to the 2019 B season, there was a 33 800 tonnes drop in fillet production to 156 940 tonnes, and an 11 percent drop in surimi production to 176 930 tonnes. The largest drop was registered for pin-bone out (PBO) fillets, which was reduced by 37 percent to 52 300 tonnes. Production of deepskin fillets (used for example by McDonalds) was down by 10 percent to 28 500 tonnes. Minced block production, on the other hand, increased by 48 percent to 18 100 tonnes.

Markets

The Association of Genuine Alaska Pollock Producers (GAPP) is stepping up marketing efforts in Europe. While cod supplies are expected to increase by 11 percent in 2021, some observers expect demand to be softer as a result of the COVID-19 pandemic, and consequently prices could fall.
However, there are great uncertainties about this. Some parts of the distribution chain (takeout from restaurants and home deliveries) have experienced strong growth because of the pandemic, and this may outweigh the slower demand predicted.

Other observers have pointed out that the whitefish sector has seen strong growth in 2020, despite the COVID-19 pandemic (or maybe because of it). Consumers have moved from fresh fish and restaurant consumption to frozen fish and home-prepared meals, and new ready-to-eat products have been introduced by chains such as 7- Eleven.

Trade

Norway has enjoyed years of continued increase in its exports of whitefish. But the COVID-19 pandemic brought a halt to that. Exports of frozen cod more or less held its own, but fresh cod and processed products like klipfish (salted and dried cod) continues to fall.

Norway’s exports of frozen whole cod were about stable during the first nine months of 2020, at 40 600 tonnes in 2020. But the main markets all showed declines: China by 18 percent, United Kingdom of Great Britain and Northern Ireland by 11.1 percent, and Lithuania by 27.8 percent.
Exports to other countries, on the other hand, increased by 32.2 percent.

Russian exports of whole frozen Alaska pollock increased by 2.4 percent during the first nine months of 2020, compared to the same period in 2019. China, by far the largest importer, accounted for 78.5 percent of the total and imported 3.9 percent less during this period, while the other major importers increased their purchases from the Russian Federation.

There was a 7.4 percent drop in Chinese imports of whole frozen Alaska pollock during the first nine months of 2020 compared to the same period in 2019. The largest supplier, the Russian Federation, which accounted for over 95 percent of the total, shipped 5 percent less in 2020, while imports from the United States of America dropped by almost 35 percent, and from Japan by 21.6 percent. These imports are mainly being processed in China and then re-exported. China’s exports of frozen Alaska pollock fillets during this period dropped by 27.4 percent. Shipments to Germany were down by almost 34 percent, and to the United States of America by 30 percent.

Chinese imports of whole frozen cod were also down, by 10.4 percent. And correspondingly, China’s exports of frozen cod fillets were down by 15.3 percent.

EU imports of frozen cod from the Russian Federation increased by 5 percent during the first nine months of 2020 compared to the same period in 2019. However, prices fell by 22 percent.

Although the previous US administration bowed out on 20 January, American consumers will still feel the effect of the US trade conflict with China for some time. On 1 January 2021, at least ten seafood items from China, including frozen haddock fillets, lost their exemption from the 25 percent tariff charged by the United States of America. The extra cost will be passed along to US consumers. It is not likely that these tariffs will be at the top of the new administration’s agenda during the first weeks or months of 2021. Thus, the 25 percent tariff will stay in place on a number of Chinese fisheries products for some time.

The United States of America is not the only country to impose restrictions on trade. The Russian Federation will prolong its ban on imports of food products, including seafood, from a number of western countries. The embargo has been in effect since 2014 and will now last at least until the end of 2021.

Surimi

The COVID-19 pandemic brought on a surge in demand for surimi products, caused by the closing of foodservice outlets. Surimi products are very easy to prepare, and therefore popular among consumers who may not know much about preparing seafood. However, in Europe, there was a drop in demand in March and April at the beginning of the pandemic, but it has since come back up.
Supplies are now becoming a problem. US production in 2020, which for years have been around 200 000 tonnes per year, looks like less than 180 000 tonnes. At the same time, production in South East Asia is also down. Thailand, which used to produce about 150 000 tonnes per year, is down to about 50 000 tonnes. As a consequence, surimi prices may be rising. Producers are now holding their breath for a good A season for Alaska pollock in the United States of America, which started in January 2021.

Prices

One of the reasons for taking the time and expense to obtain an MSC certification for a fishery is the expectation that one can command a higher price in the market. But Russian operators now believe the price differential between MSC certified fish and non-certified fish will narrow in 2021 because they do not believe that consumers are overly concerned with this issue.

The shortage of MSC certified fillet blocks is likely to remain as it is, since the Russian Fishery Company has been excluded from the Russian MSC client group. Conversely, there will be an increase in supplies of non-certified blocks, both single and double frozen.

Cod prices, which have been on an upward trend since mid-2018, seem to have levelled off in 2020.

Outlook

Supplies of groundfish will increase slightly in 2021, and Atlantic cod and haddock will see important increases. Whether this will affect prices greatly is still uncertain, as the after-effects of the COVID-19 pandemic on the market are still unknown. There have been some important changes in buyer preferences brought on by the pandemic, such as the growth in home delivery and take-out business.
It is unknown whether this trend will continue post-pandemic or whether these new buying habits are to stay.

The Norwegian Seafood Council (NSC) warns that 2021 may be a tough year for the groundfish capture sector. NSC cites five main reasons for this: increased quotas, the COVID-19 crisis, Brexit, changing trade patterns, and uncertainty about MSC certification. Larger quotas and increased landings obviously put pressure on prices and competition, while the COVID-19 pandemic has caused changing consumer behaviour. Due to movement restrictions, consumers are turning to internet shopping and home deliveries rather than going to the supermarket. This will require changing strategies by distributors.

The effects of Brexit are still uncertain, although the European Union and the United Kingdom of Great Britain and Northern Ireland have reached an agreement on trade. What effect the loss of MSC certification of the Norwegian cod fishery might have is also uncertain.

There is likely to be a shortage of surimi in the market as both US and Asian production is down.
Consequently, prices should go up. However it is still unknown whether consumers will still opt for easy to prepare surimi once the pandemic is over. A strong rebound in the hotel, restaurant and catering (HORECA) sector in China is expected for 2021 as the pandemic is under control in this country.

2021 should be an interesting year for the whitefish industry. Expect price adjustments.