Overview of key markets for fish products from Russian and American Pacific fisheries in 1st decade of June 2011

The current salmon season in Alaska took off with very active runs of sockeye, therefore the accuracy of the seasonal forecast caused no serious doubts so far, though the fishery operations on main sockeye grounds in Alaska (in Bristol Bay namely) Russian, according to the overview prepared by analysts of http://www.megafishnet.com/ based on Japanese, Russian and American sources as per 15 June 2011.

Already on the first ten days of June 2011 sockeye catches in the waters of the River Copper practically reached the level of 1 million fish. More specifically, in Kodiak the fishermen harvested more than 250,000 sockeye and in the neighbouring area of Chignik the harvest reached ca.500,000 fish, which was a very good result for the first week of the season. At the same time, the fishery situation was developing so actively that landings already started exceeding the level which local processors considered optimal to cover the demand for fresh sockeye from the markets of western areas of the USA. The above situation encouraged start of purchases of fresh Alaskan sockeye by the Japanese importers which practically had never been observed in the recent several years.

Sockeye shipments in the current year will probably be rather active, but as per mid-June 2011 no reports on the start of sockeye supply on the Japanese market has come yet. At the same time there are reports about early and quick decline of prices for salted sockeye roe in sacks from the River Copper, the product's shipments to Japan also starting fairly actively this year thanks to very strong activity of seasonal landings in May 2011. Already before the middle of the first week of June 2011 (or slightly more than one week after the start of air shipments from Alaska), offer prices were reduced by ca.400 Yen per kilo (for Grade 1 the decrease was approximately 10%) to the level of only 3400 Yen per kilo, while prices for Grade 2 were cut to 3000 Yen per kilo or 37.50 USD per kilo.

In the season of 2011 Alaskan fishermen are expected to harvest ca.4 million sockeye more than in the season of 2010, which means than with the same average weight of the raw fish the total volume of landings can increase by ca.10% to the level of 114,000-115,000 tonnes, and under the definite conditions it may be close to the result of 116,800 tonnes in the season 2009. The Japanese importers and users remaining main buyers of frozen sockeye of the US origin hope that in case of a serious rise of catches they will succeed in making the US producers cut down their prices for shipments to Japan. However, according to muted estimates, such opinion is regarded too optimistic as, first of all, prices for Chilean coho salmon in Japan in the recent two years have jumped very seriously and no signs of their decline has been observed, and, second, the exchange rate of Yen has remained exclusively strong which has pushed up offer prices in USD.

Official data on sales of frozen Alaskan sockeye from January to April 2011 look fairly interesting in this connection. More specifically, according to the official figures, the sockeye sales by producers turned out to be 7% down on last year and amounted to only 3500 tonnes. However, the average sales price rose by 6% to 3.00 USD per pound or ca.6.60 USD per kilo, while against a 17% decrease of the sales volume (to less than 1500 tonnes) the average sales price of frozen sockeye fillets jumped by 22% to 6.30 USD per pound or more than 13.85 USD per kilo. Even Japanese importers agree that prices for Alaskan sockeye have stayed at a high level from last year and it is really a challenge to make prices for purchases for the Japanese market to decline even against the background of expected catch rise.

As for chum salmon, the price situation is even more favourable for producers. The sales volume of frozen headed and gutted products grew by 4% on last year to ca.3000 tonnes, but the average sales price neither fell nor even remained at the last year level, it jumped by 30% to ca.1.80 USD per pound or ca.3.95 USD per kilo. Some market players take it as an indication of changes in the mood of Chinese processors after the Japanese catastrophe in March 2011 which can play a very serious role in production of frozen chum salmon from autumn fishery in Japan (one of the main markets for frozen Pacific salmon for the Chinese buyers). Probably that will not happen, but nevertheless the influence of successful sales on the price positions of the Japanese producers in the first third of the year 2011 will most evidently be really strong. Taking into account a current forecast of a catch rise by only 5-6% (which will hardly bring the seasonal landings even to the level of 70,000 tonnes) there seem to be no factors which could lead to weakening price positions of the producers (except for expected rise of pink salmon catches by 25% to 134 million fish or 225,000-230,000 tonnes).

Evidently, the US producers of salmon caviar cherished big hopes for successful sales. First of all, last year the price level already dramatically rose after a serious decline in the season of 2009. Second, in the first third of the year 2011 the average sales price of pink salmon price rose by more than 160% to almost 10.00 USD per pound (namely ca.9.95 USD per pound) or ca.21.90 USD per kilo. The average sales price of chum salmon rose by 30% to 13.50 USD per pound or ca.29.75 USD per kilo. Third, after the March events in Japan the coldstore inventories of salted salmon caviar from the last season dramatically declined and the prices for sieved caviar continued rising. The above three developments formed a very serious stimulus for the US producers.

They evidently pinned hopes for maintenance of a strong demand for salmon caviar from ex-USSR markets and other soulmate markets. According to official figures, as per the end of April 2011 the total shipments from the beginning of the year nearly doubled (namely rose by 92%) to 1300 tonnes with the average export price FAS or ex-transport rising by more than 25% to ca.16.40 USD per kilo. Shipments to Russia reached 530 tonnes at average price of only 11.15 USD per kilo, while shipments to the Ukraine reached 300 tonnes at the average price of more than 20.90 USD per kilo and shipments to Israel were close to 100 tonnes at the average price of ca.18.75 USD per kilo. Sales to Japan were limited to only 200 tonnes, though prices amounted to 22.30 USD per kilo. As per late April 2011 the Japanese customs also recorded shipments of ca.200 tonnes, 95% of which were contributed by salted sieved caviar, the rise of its shipments as compared to last year amounted to nearly 70% and the average import price CIF in Yen jumped by nearly 45% to ca.2580 Yen per kilo or ca.31.30 USD per kilo, a rise in USD practically reaching 60%.

By the start of the new fishing season the market specialists are fairly optimistic as to their prospects as they expect both catch rise and success in sales of frozen products and caviar and such mood strongly feeds on the situation on the Japanese market where prices stay high both for sieved chum salmon caviar and frozen Chilean salmon. Moreover, strong prices for Chilean products remain strong even despite a serious rise of shipments as compared to last year.

In April 2011 shipments of coho salmon and trout from Chile to Japan dramatically declined, but at the expense of a very quick development in the first quarter the total volume of coho exports to Japan in the current year reached 48,000 tonnes already by May 2011, more than 35% up on last year. In the meantime, export of trout amounted to ca.15,400 tonnes through the first four months of the year, 13% up on last year. The total sales to Japan from September 2010 when traders began shipping products from the production season of 2010-2011 amounted to slightly less than 82,000 tonnes of frozen coho salmon, nearly 14,000 tonnes up on last season. According to the Japanese importers, until the end of the current season the total volume of shipments may grow to ca.83,000-84,000 tonnes, 20% up on 2009-2010. The trend could not be interrupted even by leading growth of shipments to directions competitive to Japan (60-65%) as the share of the Japanese market in the Chilean export of coho salmon still remains absolutely dominating and amounts to no less than 85%.

The Japanese customs finally registered import of Chilean products at ca.61,000 tonnes with a rise of more than 23% as compared to last year. The price level in Yen as to Chilean shipments changed as compared to last year not very much (average import price rose by less than 4% and remained noticeably below 500 Yen per kilo (namely only 470 Yen per kilo) or ca. 5.65-5.70 USD per kilo), however prices of available supply offered by importers and first-hand wholesalers rose at least by 20% and in May 2011 prices for products of PREMIUM Grade below 650 Yen per kilo were not observed any more, and with the start of June 2011 sellers began commanding prices closer to 700 Yen per kilo against the background of quick approximation of active shipments of frozen sockeye from the new season in Alaska and Russia.

The situation with trout looks very much alike though with definite differences. The volume of its seasonal shipments to Japan for the period from September 2010 reached 32,000 tonnes by early May 2011, more than 1.5 times or ca.11,000 tonnes up on last season. Imports to Japan from the start of the current year by early-May 2011 amounted to nearly 16,000 tonnes, 22% up on last year, but the average import price grew by 12% to 545 Yen per kilo (ca.6.60 USD per kilo, at least 20% up on last year). In the meantime, though the available supply of Chilean trout on the Japanese market considerably appreciated on last year, prices still remained slightly below prices of coho salmon, which can be partly explained by large scale shipments of trout fillets from Chile (by the beginning of May 2011 the import volume amounted to 14,700 tonnes, 11% up on last year, but in general through the period from last September exports from Chile exceeded 22,500 tonnes, one third up on the respective result for the season 2009-2010).

As for fillets there was a very strong rise of shipments to Russia, which raised importance of the Russian market for sales of Chilean products. In the current year by the start of May 2011 the export volume from Chile generally increased by more than 40% to ca.33,500 tonnes (excluding fillets), but shipments to Russia increased even more, by 113% or more than twice, and reached 6600 tonnes. The share of the Russian direction practically reached 20%. In general, for seasonal shipments, the volume of which rose by 60% or nearly 23,000 tonnes to ca.61,500 tonnes, this share jumped from 12% to 18% as exports to Russia rose nearly by 140% to ca.11,000 tonnes.

With such growth of sales to the Russian market interests of those Japanese users who still prefer to work not with Chilean trout fillets, but with headed and gutted products, can very soon be infringed. The share of the Japanese direction in shipments of headed trout from Chile gradually narrowed towards 50% and the only rescue for the Japanese users was that the share of the Japanese market in sales of Chilean trout fillets stably remained above 80%.

The average import price in the current year amounted to ca.915 Yen (ca.11.00 USD) per kilo by the start of May 2011, 6% up on last year. Landings of salted sockeye harvested by the Japanese middle trawlers in the Russian EEZ started from a higher level this year. However, the fishermen were not completely satisfied by the price level because after a considerable reduction of capture quotas they expected even stronger prices.

Landings of middle trawlers in the current year took off only on 11 June 2011 when the small boats finished landings from the first three fishing trips to the Russian waters and started landing products from the fourth trip. Besides, middle trawlers began landing fish not in Hanasaki, but in Kusiro, where one ship called and where prices usually formed at a lower level than in Hanasaki.

On that day landing prices for salted sockeye in Kusiro ranged at 810-1070 or ca.10.10-13.35 USD per kilo, and the range of prices for salted chum salmon amounted to only 460-570 Yen or 5.75-7.10 USD per kilo. On 13 June 2011 no big change of prices was noticed in the above port, there was only a slight decline of sockeye prices of the weakest grade C and a small increase of prices for chum salmon of the high grade A.

Greater interest of the market specialists was attracted to the situation with landings of marine salmons in Hanasaki, where a middle trawler operating in the area 1 of the eastern coast of Kamchatka was also landing fish. In this port middle trawlers began landing fish on 13 June 2011 when small boats still continued landing the harvest. Partly that could be attributed to tranquility in the behavior of main buyers which resulted into formation of prices at a comparably low level. A more serious factor was still called presence of partly unsold products from the last season in the coldstore inventories, prices for which were too high for many users.

Salted sockeye of the highest grade AB was sold in Hanasaki on the above day at prices ranging at 1220-1300 Yen per kilo or ca.15.25-16.25 USD per kilo, purchases at maximum prices were conducted only by the buyers working directly with retailers. For comparison, last year middle trawlers began landings in the port on 11 June 2011 at prices close to 2000 Yen per kilo (namely at 1960 Yen per kilo) and continued landing fish on 18 June 2011 at prices ranging at 1460-1580 Yen per kilo. Therefore, in the current year prices were immediately corrected by 15-20%, which was a direct result of the buyers' last year problems with the following sales. Moreover, on the same day small boats operating in the area 3a also landed catches in Hanasaki, and prices for salted sockeye Grade AB descended below 1000 Yen per kilo namely ranging at 970-990 Yen per kilo (12.10-12.35 USD per kilo), while prices for fresh chum salmon continued gradually rising and already strongly approximated prices for salted sockeye and entered the range of 750-770 Yen per kilo of Grade AB (9.40-9.60 USD per kilo) which was regarded completely non-typical.

Prices for salted chum salmon practically did not go up and their wide range on 13 June 2011 amounted to 380-640 Yen per kilo or ca.4.75-8.00 USD per kilo. As for frozen sockeye which was landed by one middle trawler on the above mentioned day, prices fluctuated from 710 to 1070 Yen per kilo or ca.8.90-13.40 USD per kilo at currently very strong exchange rate of Yen.

Pollock roe

The Chinese import data in April 2011 already enabled fairly accurate evaluation of frozen Russian and US pollock shipments to main markets of Japan, South Korea and China in the first two months of the new season (namely March and April).

The Chinese import of the Russian products grew brisker in April 2011, but much less considerably than shipments to Japan (on the other hand, the South Korean import started to slow down after very high activity of shipments in March 2011). As compared to last year, April import to China grew by 75% but amounted to only 530 tonnes and the total shipments of products from the season 2011 in March and April 2011 amounted to a little more than 1000 tonnes, only 10% up on the corresponding result of 2010, when many Russian producers stocked a great lot of their products for sales in May 2011 in anticipation of higher prices.

In 2010 really high activity of shipments of Russian pollock roe for processing in China was not observed since March when traders imported ca.640 tonnes of products, the intermediary maximum was noticed in August 2010 with the import volume of ca.430 tonnes. The annual import volume was limited only to ca.3300 tonnes, another 2% down on the previous year. In other words, as compared to the record high result of 2006 (10,000 tonnes), shipments of Russian products fell more than three times. However, in the current year the situation can still change as some of the processing capacities in Japan have run out of order after the March events.

At the same time, shipments of Russian products to South Korea stay brisk. In April 2011 their volume declined nearly by 10%, but again amounted to more than 1000 tonnes, and the total import volume for March and April 2011 amounted to ca.2200 tonnes, nearly 40% up on the same period of 2010 (when the shipments peaked in April and August was the next and only month when import reached 500 tonnes). In 2010 under the influence of a dramatic rise of activity of the Japanese import the volume of the South Korean import of the Russian raw material decreased nearly by 10% to 5300 tonnes, but high results of March and April 2011 say that in the current year shipments can be again close to 6000 tonnes as was the case in 2009.

As for the prospects for shipments of Russian products to Japan the situation looks much more difficult, as, according to the market specialists, in March-April 2011 there was a delay in import development and its rates did not correspond active sales at auctions in Pusan. In April 2011 the import shipments totaled 5700 tonnes, nearly five times up on March 2011 and nearly one fourth down on April 2010. The import volume through March and April 2011 also declined nearly by 25% to only ca.6900 tonnes.

The total import volume to Japan, through March and April 2011 was limited to only 10,000, more than 10% down on last year, while the total sales volume of seasonal products in Pusan was estimated by the Japanese buyers at more than 20,000 tonnes. The import volume of US products to those directions amounted to only ca.1400 tonnes, more than 70% down on last year, but against the above background a big decline of shipments could be explained only by the fact that the period of the product sales from the A season was delayed from mid-March to mid-April.

The average import price for seasonal shipments to Japan in the first spring months was limited to only 735 Yen per kilo or ca.8.90 USD per kilo, 3% up on last year. As for shipments to the market of South Korea the average indications were limited to less than 8.55 USD per kilo, nearly 2.00 USD per kilo or 30% up on last year, as for shipments to China it amounted to nearly 10.65 USD per kilo, ca.2.70 USD per kilo or 34% up on last year. Thus, the general increase of prices was seen despite a fairly moderate rise of Japanese import prices.