Russian blue whiting market swinging between export and domestic demand

June 2, 2008 10:48

Blue WhitingThe Russian market of blue whiting harvested in the Faroese Zone has of late been oscillating between the domestic direction subject to considerable turbulence and the export traders who have been steadily and surely pushing the prices for the frozen product upwards, trading sources in Murmansk told .

The instability and high prices at the domestic market have been caused by irregularity of landings in the Russian ports resulting from the changeability of the fishery. For example, in November-December 2007 the scales were definitely in favour of the opportunities at home because the fishermen would have needed a price of USD1000/MT FOB Faroe Islands to switch to export, an unreal condition during the period. As a result, practically the entire catch of the species from the end of last year to mid-March 2008 was shipped to Russia.

China and Africa

 However in March 2008 the domestic blue whiting prices reached a level making export deals an attractive option, more so that the foreign buyers were already in place and have already developed appetite for the species. The Chinese market did so last year to discover blue whiting as a replacement for Russian Alaska pollock as the shipments from the Russian Far East have been dwindling in the last couple of years.

Africa has also developed liking for blue whiting. As a result, the export traders who would deal in bottom species and would not hear about blue whiting last year, have changed their mind and started to approach Russian suppliers for the earlier neglected fish.

Surprisingly, the big export demand has not seriously driven the prices upwards, the fact perhaps to be explained by long shipping time from Faroe Islands to China. In fact, it will take 1.5-2 months for the Chinese factories to get hit by material shortages and be encouraged to raise the purchasing prices.

Meanwhile by the start of June the Russian market has developed expectations that the prices of blue whiting should be set to grow due to reduced supply but at the same time the market may get once again overheated. On the one hand, the buyers know that large fishing companies are running out of quota while the fishery has much deteriorated. On the other hand, the fishermen proceeding from the past negative experience are afraid to sell too cheap. Still, it is perfectly clear that as of June the market scales are set to be tipped in favour of the domestic market.

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