The Barents Sea cod recommendation combined with slightly declining landings of Alaska pollock will mean somewhat tighter supplies in 2017. This year's surimi production is expected to be lower than in 2015, and prices may weaken.
Resources
According to the FAO State of World Fisheries and Aquaculture (SOFIA) 2016, Alaska pollock is now the most harvested seafood in the world, despite a slight decline in total landings. In 2014, landings of Alaska pollock amounted to 3.2 million tonnes, compared with 3.1 million tonnes of anchovies, which previously held the top position. The figures for 2013 were 3.24 million tonnes for Alaska pollock and 5.7 million tonnes for anchovies.
Deteriorating environmental conditions in the ocean continue to impress concern for groundfish species. According to Science Daily, increasing ocean acidification could double the mortality of newly hatched cod larvae, putting this species under pressure. German research network BIOACID has quantified cod mortality rates in the western Baltic Sea and the Barents Sea, and concluded that harvesting rates should be reduced in order to secure a sustainable stock of cod in these regions.
Similarly, experts at the University of Hull are warning that North Sea cod and haddock may disappear in the future. They claim that climate changes may force these species away from the shores of the UK, as the species will move further north to find colder water.
According to ICES, the whitefish quotas in the Barents Sea are likely to stabilize in 2017, in spite of some change for individual species. ICES has recommended that the cod quota be cut to 805 000 tonnes compared with 894 000 tonnes in 2016, while the saithe quota be increased by 7 percent to 150 000 tonnes. For haddock, ICES recommends a quota of 233 000 tonnes, down from 244 000 tonnes in 2016.
WWF (World Wildlife Fund) Chile has called for urgent measures to be initiated in order to save the hake (Merluccius gayi) resource in its waters. According to the organization, this resource is in a state of exhaustion or collapse, and it calls on the authorities to take five important steps to save the hake. These include the introduction of a minimum catch size of 37 cm, identification of key hake feeding and breeding areas, reduction in the hake fishing quotas, a broader ban during the months of August through October, and finally, tougher enforcement and penalties for Illegal, Unreported and Unregulated (IUU).
The Canadian Minister of Fisheries has confirmed his decision to favour inshore fishers when allocating the quota for Northern cod. According to a press release from the Fish, Food & Allied Workers Union in July, the Minister stood by his commitment to allocate 115 000 tonnes of this quota to inshore fishers.
Landings and processing
US production of Alaska pollock pinbone-out (PBO) fillets is up during the B season, according to recent reports. As of the middle of July, production of PBO, including blocks, IQF (individually quick frozen) and shatterpack (frozen with interleaves) products stood at 21 400 tonnes, up by almost 16 percent compared with the same period last year. In contrast, production of deepskin blocks was down by 21 percent to 10 000 tonnes. Mince production was up by 14 percent and H&G pollock was up by 91 percent to 4 200 tonnes (Source: Undercurrent News).
According to the Russian Pollock Catchers Association, catches of Alaska pollock were up by 3 percent as of the end of August. Total landings amounted to some 1.39 million tonnes, which was an increase of 39 500 tonnes compared with the same period in 2015.
However, the Russian Federation is now producing more fillets than before, as production of Alaska pollock fillets was up by 41 percent to 45 600 tonnes. H&G Alaska pollock production increased slightly from 557 100 tonnes in 2015 to 563 300 tonnes in 2016. Whole round Alaska pollock production declined from 184 600 tonnes in 2015 to 180 400 tonnes in 2016.
Chinese processors are suffering from a shortage of larger size H&G (headed and gutted) Alaska pollock for processing. The Russian Federation supplies of Alaska pollock have consisted of smaller-sized fish, which yield a fillet that is too small for the market. Consequently, prices for larger Alaska pollock have gone up significantly, while even medium-sized Alaska pollock is fetching somewhat higher prices at the moment.
Trade
An analysis done by the Norwegian Seafood Council (NSC) shows that Norwegian exports of seafood to the UK will suffer as a result of Brexit. Brexit has weakened the British pound and reduced the purchasing power of the British consumer, and this will translate into less imports of such products as seafood. According to NSC, round haddock and cod fillets are the two products that will probably be most affected. Audun Lem, Deputy Director of the Policy and Resources Division in the Fisheries and Aquaculture Department at FAO, noted that on the UK side, Brexit will cause difficultly for UK exporters due to more difficult market access to the EU.
UK imports of cod were strong in 2015, amounting to 115 300 tonnes at a value of 440 million pounds. This represented a 0.9 percent drop in volume, but an increase of 7.3 percent in value compared with 2014. Frozen fillets were the most imported product form, accounting for 63 percent of total cod imports. Norway was the only major supplier to see a drop in shipments in 2015, which were down 7 percent by value, while Russian Federation cod exports to the UK increased by a healthy 38 percent by value.
US imports of cod-like groundfish remain stable. During the first six months of 2016, a total of 56 200 tonnes of fillets and 68 600 tonnes of blocks and slabs were imported into the USA, compared with 54 600 tonnes and 69 700 tonnes in the same period in 2015. The largest supplier to the USA is China, which accounted for almost 40 percent of the combined imports of these products. The second largest supplier to the USA was Iceland.
German imports of frozen cod fillets during the first half of the year increased slightly (+6.6 percent) compared with the same period last year. The largest supplier, China, strengthened its position, and accounted for 48 percent of German imports of this product, compared to its market share of 37 percent last year. Poland and Denmark were also major suppliers of cod fillets to Germany.
German imports of Alaska pollock during the first half of the year fell marginally, from 67 500 tonnes in 2015 to 66 800 tonnes in 2016. China accounted for 58.5 percent of this, while the USA accounted for 30.5 percent.
China has been importing large amounts of round frozen groundfish for processing and re-exports, but in the first half of 2016, Chinese imports of this raw material have declined somewhat. Imports of whole frozen cod did go up by 16 percent to 109 100 tonnes, but imports of whole frozen Alaska pollock went down by 11.5 percent, to 390 700 tonnes.
The reduction in pollock imports was reflected in lower Chinese exports of frozen Alaska pollock fillets, which declined by 4.4 percent to 115 500 tonnes during the first six months of the year.
In contrast, Chinese exports of frozen cod fillets, went up by 6.5 percent to 62 700 tonnes.
Norwegian exports of fresh and frozen cod increased during the first eight months of the year by 7 percent. At the same time, export prices went up, and Norwegian exporters had reason to be happy.
Prices
Cod prices have been on the rise for a couple of years now, and are expected to remain on the high side. The Brexit vote will certainly affect this trade in the years to come, but for now the future remains somewhat unclear. According to analysts in Nordea Bank in Norway, there is a risk of whitefish prices weakening as a result of the Brexit vote. One reason for this is thought to be a weaker pound sterling. In contrast, the lower quotas for next season may act as a balance against this.
Haddock prices began with a rising trend in 2015, but weakened as the year wore on. Both Barents Sea haddock and cod prices are expected to weaken.
Major US fishing and processing company Trident Seafoods and Japanese buyers have agreed to drop the price of frozen Alaska pollock surimi by ¥50 for B season products compared with A season products. An underlying reason for this is the trend towards weakening demand. This will break with the five-year trend of increasing prices. As usual, Japanese buyers are taking a wait-and-see position and are therefore not keen on buying at the moment. European surimi prices in US dollars have stayed level, but Japanese operators expect these also to come down when converted into yen.
Surimi
The US Surimi Commission expects the total surimi production in 2016 to be lower than in 2015. This is partly due to lower Japanese production and a drop in surimi exports from Asian countries. Total surimi production based on Alaska pollock from the Bering Sea/Alutian Islands is expected to come down to about what is was last year, around 188 000 tonnes. Japanese Alaska pollock landings, however, were down by 21 percent during the period from January to May this year. While Japanese surimi production in 2000 was 70 000 tonnes, in 2016 it is expected to come to only about 30 000 tonnes. Surimi made from Pacific whiting in Japan was abnormally low in 2015, but in 2016 it is expected to be at 2014 levels, around 26 000–27 000 tonnes.
Japanese surimi production in the Hokkaido fishery is expected to drop this year. According to observers, production could be the lowest since 2000. But at the same time, imports from the USA are not expected to rise above last year's level of 12 000 tonnes. With the strong yen, prices for imported US surimi in Japan could be lower than for the domestically produced product. Total supply of frozen surimi on the Japanese market is expected to be about the same as last year, around 294 000 tonnes.
The report analyses the market situation over the period January-October 2016
