Surimi production expected to increase significantly, which may lead to a pronounced price fall


The Alaska pollock A season fell short of expectations, but the US surimi industry still believes that 2016 will be a good one, if not a bumper year. Production is expected to pick up in the B season, which started 10 June. In the 2014/2015 season, global surimi production was estimated at some 800 000 tonnes, of which Alaska pollock surimi accounted for 200 000 tonnes. Tropical fish surimi accounted for about 500 000 tonnes, with other fisheries contributing the rest (Source: US Surimi Forum, April 2016).

In Alaskan waters, pollock tends to stay longer in colder waters, and consequently the fish grows slower. This smaller fish has prompted some processors to shift from filleted pollock production to surimi production. This is a trend that started in 2015, and is expected to continue. Also contributing to a shift in surumi production is the increased Alaska pollock quota and problems in the European block industry.
According to some analysts, these shifts towards surimi production may lead to a significant increase in surimi that will result in a price crash following a slight price increase since 2014.

The expected additional production may amount to 30 000 to 40 000 tonnes, and it is doubtful whether the market can absorb that amount without a major price reduction. Adding to the concern is a longer-term trend that consumers are increasingly preferring "natural" products, which is leading them to move away from processed foods, such as surumi. However, there is also still a significant demand for high-protein products, with surimi filling that need. With all of these developments and trends, it will be interesting to see how demand does with a possible over supply.

In the Faroe Islands, a fishing and processing company is building a surimi plant to produce surimi based on blue whiting. Rather than using the blue whiting for fishmeal production, as they currently do, they think they can get a higher price for their catch by turning it into surimi. The company has a blue whiting quota of 70 000 tonnes for 2016, and expects to produce about 6 000 tonnes of surimi in 2017. The plant is expected to open in December 2016.

In Japan, buyers are demanding even lower prices for Alaska pollock surimi after they fell in April. Compared with the 2015 A season, Japan's purchasing price for middle- and low- grade products went down by JPY 20 per kg. This is the first time in six seasons that Japanese surimi prices have declined, which demonstrates that it is largely due to currency exchange fluctuations as the yen has appreciates against the USD. Prices in USD have remained stable.

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


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