Pacific cod market strengthening trend looks set to continue July 15, 2014 Jeanine Stewart Undercurrentnews[dot]com The Pacific cod market is shaping up to be in a much better position this year than last, sources told Undercurrent News on Monday. “This year, the market is better, and fish are flowing more easily,” a source at a major Pacific cod company told Undercurrent. As the B season ramps up order volumes are good, especially from Europe and China; and volumes to Japan are expected to start growing in August, another major industry source said. Prices now are up at $3,600 per metric ton for headed and gutted (H&G), j-cut, longline-caught, medium sized Pacific cod, sold to Japan. That’s a clear improvement over last year’s price of $2,900/t. This may be just the beginning of the improvement over last year. “There’s a level of demand that’s actually greater than the supply that’s coming in, so we’re going to see pricing continue to go up for the balance of our B season,” the first source said, adding a prediction of $4,000t by year’s end, based on the current demand level. Both sources agreed on the likelihood of demand out of Japan increasing in August. This would be a change from last year, when demand did not pick up until the end of the year. At that point, prices increased sharply, from the under $3,000/t level seen in the summer to $3,600/t by the end of the year, which is where prices started in January of this year. Prices this spring held for the most part, except for a slight $100 drop, as fish “continued to move”, before bouncing up again this summer, the first source said. Strong market thanks to sustained cheap prices This year’s strong market may be the product of tough times last year. The large Barents Sea quota, at 1 million metric tons for 2013, was a 33% increase over the levels of 2012. The total allowable catch for 2014 was set at 993,000t, a drop of 7,000t. Prices for Atlantic cod H&G dived to $2,700/t in February and March 2013 and have gradually firmed to $3,100/t-$3,150/t in July 2014. While Barents Sea cod represents a different resource and mostly different fishing practices than the longline Pacific cod industry focused on here, the supply of it — which dominates global supply – largely dictates the price levels for Pacific cod, both sources said. That global supply, and the influx of it, is what brought prices crashing last year. Prices dropped from $3.35 per pound in week 14 to $3 in week 16. The benefits, however, appear to be hitting now, as they seem to have expanded the market. Those benefits of low prices hit particularly hard in the price-sensitive US market, which accounts for more than its usual share of the demand growth, the first source said. “Historically, our market domestically has been 10% [of overall sales],” the source said. “This year, it was 30%.” That is an increase from 20% last year, he added. The company is exporting less to Europe and China while Japan’s demand is roughly the same. Boston and New Bedford, Massachusetts, are the major sources of Pacific cod demand in the US traditionally, and that trend remains, but people tend to buy more refreshed cod than they used to and less twice frozen product out of China. Yet the market has a lot of catching up to do to reach the $5,000/t range prices hit in August of 2008 — a historic high — particularly considering supply is historically high. The global cod harvest rate has increased from 1.2 million metric tons in 2010 to 1.8m today. Globally, Pacific cod is also very impacted by demand for other species, such as haddock, which has been high in price, causing some buyers to switch to cod. Plus, there is “not a great deal of frozen available anywhere in headed and gutted (H&G) cod”, the first source said. This comes in part from strong product movement out of Europe. “The Norwegians have been good about freshing their cod out during the season, and the Russians are moving product.”
Posted on: Wed, 16 Jul 2014 16:39:27 +0000
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