Brief overview of key markets for Pacific seafood as per first week of February 2010
Some purely technical moments still remained pending solution, for instance, there was no clear instruction on how to fill in the certificate, but the market stress observed in the closing week of January 2010 practically vanished by the end of the first decade of February 2010. Some Russian producers and pollock suppliers showed no worry about the prospects of further sales of production from their raw material hoping that the situation would somehow settle itself.
Already before the start of the New Year holiday season (under the lunar calendar China celebrates the New Year from 13 to 19 February 2010) the market situation for the Chinese processors generally cleared up and in the preceding several days some of them reached price concessions from the Russian producers of frozen pollock. In the meantime, European buyers of Russian and Chinese pollock fillets were growing optimistic (though mutedly) thus hinting that the EU authorities could still agree to legalize the Russian products made in January 2010 for export to the EU. In two words, the market situation was improving but for the fishery situation on the US grounds influencing the market development due to strong reputation of the USA on the key markets.
The US pollock fishery in the eastern waters of the Bering Sea in the closing week of January and in the beginning of February 2010 remained even more slow than last year when the capacities of land-based processors holding half of quotas (less development quotas) were completely loaded only closer to mid-February 2010.
In the closing week of January 2010 the Bering Sea fishermen harvested only a little more than 9500 tonnes, and the dedicated trawl harvest in January 2010 gave only ca.15,000 tonnes of pollock, actually twice down on last year. The pollock fishery in the Bay of Alaska was progressing much quicker than in the beginning of the A season 2009, the harvest by the end of January 2010 exceeding the last year result nearly by 20%. However, the fishery scale was very small with the harvest amounting to only 1300 tonnes out of the seasonal quota of less than 39,000 tonnes (smaller than the quota in East Sakhalin).
In the beginning of February 2010 the fishermen were still waiting for the first wave of the spawning run. The main fishing efforts kept concentrated in the south area of Unimak in the vicinity of the area's key fish port of Dutch Harbor where the leading onshore processors are based. However, the fishermen continued harvesting old pollock (some of the catch was contributed by very young pollock), the quality of the raw fish was not high thus even more restraining the production output both of fillets and surimi and, most of all, pollock roe.
. | 24-31 January 2010 | 2010 versus 2009 | Result for season A | 2010 versus 2009 |
Catch | 10,444 | 53.9% | 16,231 | 53.0% |
Roe | 172 | 17.8% | 253 | 21.8% |
Fillets | 1222 | 34.8% | 1675 | 38.0% |
Headed pollock | 317 | 60.7% | 617 | 69.2% |
Mince | 373 | 42.0% | 600 | 45.2% |
Surimi | 682 | 29.4% | 814 | 29.0% |
Source: US NCMR | ||||
According to some information, only one half out of ten factory trawlers continued active spotting for pollock rising northwards to the border with the Russian zone (the fishery situation there was better and there were signs of beginning roe pollock runs). The remaining fleet preferred working on the grounds of yellowfish sole the harvest of which by the end of January 2010 reached 11,500 tonnes, almost nine times up on last year. Probably, flounder sales to China interested the producers more than sales of products from very old pollock. With the help of a very small number of fishing boats, land processors tried spotting in the waters of the Pribylova Islands without launching fillet and surimi production lines.
The total pollock harvest in Alaska (less bycatch) by the end of January 2010 amounted to only ca.16,500 tonnes, 47% down on last year. The output of fillet products declined by more than 60% and failed to reach 2000 tonnes, surimi production was limited to less than 1000 tonnes, more than 70% down on last year. Production of pollock mince went down by 30% to more than 600 tonnes. Seasonal production of frozen pollock roe was limited to only 250 tonnes, practically 80% down on last year.
Against the above background the results of the Russian fishery operations looked incomparably high. According to the federal monitoring data, the total harvest through January 2010 amounted to more than 198,000 tonnes, while the Okhotsk fishery contributed nearly 181,000 tonnes. Kamchatka sources reported even stronger catches. It is quite clear that direct comparison with the US fishery is not appropriate because in Alaska the dedicated trawl pollock fishery took off on 20 January 2010 while the Russian fishery was running from the beginning of the month. At the same time, it is worth noticing that on 31 January 2010 only the Russian fishermen altogether harvested 9500 tonnes, the amount practically equaling the US Bering Sea harvest through the closing week of January 2010.
On the first week of February 2010 the daily catch rates on the Russian pollock grounds amounted to at least 9000 tonnes, and closer to the end of the first ten days of the month the daily catches grew even stronger thanks to rising number of fishing efforts in the Sea of Okhotsk. According to some information, the fishing efforts in three main subareas of the Sea of Okhotsk exceeded 130 ships thanks to newcomers mostly based in Kamchatka, therefore the average daily catch reached 10,000 tonnes, the bulk of which was again contributed by West Kamchatka and the Kamchatka Kurile subarea.
In the first week of February 2010 the Russian fishermen produced ca.33,000 tonnes of headed and gutted pollock and ca.11,000 tonnes of w/r pollock, according to the federal monitoring data, however the total fillet production was much lower at 1500 tonnes (probably because of too active catch dynamics on the Okhotsk grounds and very weak results on the Bering Sea grounds).
As for production of frozen pollock roe, the fishermen reported a gradual, but fairly quick rise of roe yield in the Sea of Okhotsk, the figure almost reaching 3.5% in the first week of February 2010 versus less than 3.0% in the closing week of January 2010. In February 2010 the standard of the average roe yield as voluntarily commanded by Vladivostok-based Pollock Fishermen's Association amounted to 4.0% and as per the first week of the month such target seemed to be not far off. By 10 February 2010 the output of pollock roe (regarded to be a high quality product) was forecasted to reach 3000 tonnes, and taking into account the output in January 2010 the seasonal pollock roe production was expected to rise to 7000 tonnes.
If the Okhotsk pollock roe maturation did happen approximately one week earlier than last year and the level of maturation started to reach optimum concentrations already in the end of January 2010, the Russian production of frozen pollock roe already in the beginning of the second half of February 2010 would grow to 10,000 tonnes. In the meantime, some market specialists think that in the current year 2010 the US pollock roe production in the winter-spring A season may fail to reach the above mentioned level. If the positive dynamics of the first ten days of February 2010 persists, the Russian pollock harvest may reach 340,000-350,000 tonnes already in the middle of February 2010 (subject to favourable weather and ice conditions), while the US total quota amounts to less than 370,000 tonnes for the A season and ca.20,000 tonnes will be hardly covered due to the fishery's specific character. The US pollock quota for the Bering Sea operations amounts to only ca.313,500 tonnes.
Such a strong contrast on the Russian and US grounds cannot but suggest that already in 2009 the Russian producers were able to hold the pollock market in their hands and in the current year 2010 they are again missing very favourable opportunities. The market situation in general looks gloomy even despite unprecedentedly high activity and strong interest showed by Russia's Federal Fisheries Agency, consolidation of the largest pollock quota holders and their willingness to concord their market operations.
There are speculations about manipulations of the Chinese buyers of headed pollock and the Japanese buyers of frozen roe, but such rumors look like weeping or complaints while earlier the US producers have showed how to win strong market positions even under less favourable conditions.
Pollock roe
The results for wholesale trade in ready-to-eat pollock roe products on main Japanese markets in 2009 can be used to forecast the outlook for sales of frozen pollock roe in the current season, moreover the sales dynamics has been positive at least in volume terms.
On the wholesale markets of Japan's main capital area the sales volume of salted pollock roe and roe with spices in November 2009 totaled 420 tonnes, nearly 11% up on 2008. In the meantime, in December 2009 (when mostly holiday products were sold) the rise on December 2008 amounted to nearly 10% with the sales volume of 550 tonnes. Thus, in the closing months of last year that the leading producers of processed pollock roe and its largest wholesalers succeeded in encouraging recovery of the end consumption which noticeably decreased in 2008 after a serious price rise (the average price actually returned to the level of 2000 Yen per kilo by the end of 2008 after a fall to less than 1800 Yen per kilo).
However the sale rise has been achieved due to price manipulations. Even in December 2009 the average sales rise did not grow to 2000 Yen per kilo, though the traders offered mostly high-end products as compared to other than closing months of the year.
Sales of salted pollock roe on Tokio's markets in 2008-2009
. | Month sales | Total sales since the beginning of the year | ||
Metric tons | Yen per kilo | Metric tons | Yen per kilo | |
2008 | ||||
October | 191 | 1903 | 1948 | 1890 |
November | 183 | 1940 | 2131 | 1895 |
December | 234 | 2322 | 2366 | 1937 |
2009 | ||||
October | 193 | 1651 | 2113 | 1618 |
November | 222 | 1703 | 2336 | 1626 |
December | 259 | 1929 | 2595 | 1656 |
In general, in 2009 the total wholesale trade in processed pollock roe in Tokio reached 5000 tonnes, nearly 6.5% up on 2008, but the average prices for two main product categories of salted roe and roe with spices amounted to only ca.1725 Yen per kilo, more than 200 Yen per kilo or 10.5% down on 2008. Similar results were also recorded on wholesale markets of other Japanese consumer centers.
The Japanese market specialists keep saying that only after a price fall (and exactly due to it) the negative trend in sales of processed pollock roe has changed upside down. At the same time, the reports say, without a dramatic fall of purchase prices for frozen raw material the Japanese producers and suppliers of imported products would have never achieved that.
Sales of pollock roe with spices on Tokio's markets in 2008-2009
. | Month sales | Total sales since the beginning of the year | ||
Metric tons | Yen per kilo | Metric tons | Yen per kilo | |
2008 | ||||
October | 189 | 1918 | 1915 | 1878 |
November | 196 | 1973 | 2112 | 1887 |
December | 270 | 2177 | 2382 | 1920 |
2009 | ||||
October | 210 | 1661 | 1963 | 1794 |
November | 202 | 1751 | 2165 | 1790 |
December | 293 | 1805 | 2458 | 1792 |
Therefore in the current year prices for the raw material are forecasted to remain low, otherwise the situation with sales of ready-to-eat pollock roe will worsen again as the Japanese consumption strongly depend on deflation trends with the end consumers actively resisting to higher prices and responding only to discount offers. Probably, the forecast will turn true, moreover problems of the Japanese economy are well-known and the nation's dependence on high quality exports to the leading markets has played a mean trick after the crisis blow on the US and EU economies. However, the Russian producers who would naturally like to use the problems of their US colleagues to their own benefit have nothing to gain from it as the summarized output of 45,000-50,000 tonnes of frozen pollock roe is nothing extraordinary and there are all the grounds to forecast the prices for the raw material of fairly good quality at 9.00-10.00 USD per kilo (especially if to take into account a very strong exchange rate of Yen to USD mostly to the benefit of the Japanese buyers), up on 7.00-7.50 USD per kilo as forecasted now.
Pollock fillets
Interesting developments have been observed on the market of pollock fillets in Boston, they include weakening of the US market structure before the start of main shipments of Alaskan products from the new fishing season.
On the first week of February 2010 the product prices decreased by 2-3% as compared to the first week of January 2010, though only for Alaskan products, while prices for imported products and pollock mince remained unchanged. Prices for skinned boneless pollock fillets descended to 3.79-3.85 USD per kilo. Thus the prices through the month during which the market was preparing for the start of shipments of Alaskan products from the new season declined more than by 4% in the low end and by 8% in the upper end.
Especially interesting development was connected with the fact that in the second half of last year prices for PBO fillets made in Alaska remained very stable at 4.00 USD per kilo levelling at 3.96-4.18 USD per kilo. Besides, the price fall itself cannot but cause interest against the background of exclusively slow start of the new fishing season A.
The market specialists think that extremely weak progressing of the fishery in Alaska will inevitably lead to a shift in the start of main shipments of Alaskan products from the new season and in February 2010 a serious expansion of the products on offer cannot be forecasted. Under those conditions a certain increase of prices would rather be expected, though the official estimates of the market character said that the market supply was plenty, activity of the demand was average and the market conditions were weakening. The large market supply could be mostly attributed to entry of holders of product inventories from the last year B season to the market and one of the possible reasons behind the weakening of the market conditions was influence of messages on exclusively quick progressing of the Russian fishery in the Sea of Okhotsk.
The most interesting development in terms of its influence on the situation on the Russian grounds is probably that the market specialists speak about resumption of active shipments to the US market of onboard frozen Russian products rather than about rise of shipments to the US market of double frozen fillets made in China. Prospects for fairly quick recovery of the Russian position on the US market are estimated as quite real because signs of emerging new and active interest in the Russian products from the US users started to be observed already in the year 2009.
Already before the end of last year the US import of frozen pollock fillets practically reached the level of 2000 tonnes, while in 2008 the total import volumes amounted to less than 200 tonnes. As compared with the US import of the Chinese products approaching 70,000 tonnes, the import volume of the Russian products looked very tiny. However, with the US market of imported pollock fillets having been completely grasped with the Chinese products since 2001 even such a low result could be evaluated as fairly good. Taking into account that in 1990s the Russian products were successfully sold on the US market pushing aside the South Korean products, potential recovery of Russia's market position in short term looks fairly practical as production in Alaska will be strongly limited by quotas.
Positions of the Russian pollock on the US market may be strengthened even without a rise of import of Russian pollock fillets because the Russian capture quotas 2010 are so large that even without their complete exhaustion the further rise of shipments of Russian pollock fillets processed in China to the US market is easily predicted. Moreover, last year with a similar correlation of quota sizes for Alaskan and Russian fisheries the US import of Chinese products has increased approximately by 20%. Influence of such prospects on the general conditions on the US market of pollock fillets can hardly be insignificant.
Nevertheless, in the beginning of February 2010 prices for double frozen products processed in China remained practically unchanged as compared to mid-January 2010 when prices for skinned boneless fillets declined only by 1-2% as compared to December 2009 and settled at more than 3.00 USD per kilo ranging at 3.04-3.13 USD per kilo.
Stable prices have been also observed for deeply skinned fillets, the indications declining to 4.52-4.63 USD per kilo by mid-January 2010, 5-7% down on December 2009. The market specialists think that the decline can be mostly attributed to the start of shipments of Alaskan products from the new season and the anticipatory character of the decline can be connected with a more specific demand for more expensive deeply skinned fillets.
The prices for US-made pollock mince have also remained stable. In the beginning of February 2010 they ranged at ca.1.87-2.11 USD per kilo.