Brief survey of key markets for fish products from Russian and American Pacific fisheries as per first week of October 2011

Next year prospects of both Russian pollock fishery and Alaska fishery are dubious because of current fishing situation in the Bering Sea. It is already clear that season B will finish before quota taking, and rest will be large. Experts estimate that TAC will be 1.0-1.2 Mt, according to the overview prepared by analysts of www.megafishnet.com based on Japanese, Russian and American sources as per 12 October 2011.

Alaska pollock. In Russia the TAC-2012 has been fixed by the order of October, 5. It includes 16% TAC increase for the West Bering Sea zone (to 410 th.T). It's a good hope, but fishermen have some doubts as on the one hand for a few years it has been impossible to take it fully. On the other hand, situation at American zone is not good at all. In the first half of the year there was quite successful catch at Sea of Okhotsk, but next year quotas decrease 43 th.T and limited by less than 960 th.T. In fact, all the decrease was set for the biggest zones (North SOO - 335 to 313.9, Kamchatka-Kuril + West Kamchatka - 585 to 548.1). Those areas produce almost all the volume of Russian pollock roe, one of the major products. Taking average recovery rate 3.5% it might mean shortage of 2.03 th.MT of pollock roe, that might cause revenue loss of US$M20.

Looking at US production, we say there was no real change in fishing situation, though there were some hopes that older classes might come and fish quality was supposed to become better this season.  Most probably, B season will finish with weak catch results.  However, production volume is high in comparison with previous years.

Catch volume in B season has increased 25% - 624.8 th.MT as for October, 8. However, total production of PBO fillet (the second export item) has already increased 42% in comparison with B season 2010 and reached 57.5 th MT, while PBI fillet production increased 49% to 3.2. DS fillet production for domestic consumption actually decreased a bit, however total production for the year is 3.6 th.MT bigger than 2010.

Total production of APO fillet as for October, 8 (a month before end of season) was about 156 th.MT, more than 37% more than in 2010 for the same date. Possibly, it is not as much as was planned initially as quotas were increased 53%. Nevertheless, total production of PBO fillet has already increased 62% to 2010 full volume, but actual situation at the main European market is not as good as was planned.  Sharp exchange rate changed together with supply increase press the market heavily.  Some experts think even if TAC decreases in 2012 (will be clear after NPFMC decision early December), it will be very difficult to keep prices higher than US$3.00 per kg - effectively equal to double frozen fillet.

Another important factor which could weaken US producers position is Russian pollock MSC certification. Decision time is coming, and if positive American product will lose another competitive advantage over Russian and Chinese one.

As for APO surimi production, Japanese experts who are the most interested party, mention that September production decreased in comparison to catch. At the same time, they mention that total year production has reached 138 th.MT (in 2010 - 103.5, in 2009 - 86.3), and total ratio surimi to the other products is about 36.5/63.5. Some importers say that total volume shouldn't be treated as the major indicator, greater part of it is low grade products while high grade (SA/FA) surimi production went through serious difficulties, one of the reasons is small fish size. It is mentioned that purchase situation may turn out to be not as stable as it looked during the first two months of B season, even when surimi supply from Thailand and India was not very good - there were problems with both stock and fishing activity because of fuel price increase.

As for APO roe production, it is mentioned that weekly production rate has achieved 300 MT/week as expected. It means that by the end of the season total production volume cannot just reach 3.5 th.MT, but come close to 4.0 th.MT, that would be a new record for B season. Surely, price level will not be high, but roe sales will substantially add to season financial results.

The rest of quota for October, 8 was 102.3 th.MT. It's clear today it is impossible to get that volume in three weeks. Many market specialists believe it would be a clear indicator of stock decline.

Salmon. Russian statistics for beginning of October says that total seasonal volume has come close to all-time record of 2009 and achieved 513.5 th.MT (including 5.1 th.MT taken by Japanese drifters). Of this 390 was pink, 74 - chum, and sockeye catch was over 42.5 th.MT. Chinese import statistics show that it is quite possible that Chinese import might be higher than in 2009. Many specialists believe that Fukushima catastrophe strongly pressured Chinese processors, who are really afraid of Japanese products. Even in April Chinese authorities imposed very tough control mode on the product, and detailed discussions with Japanese authorities in May didn't really change anything. Some experts name the measures extraordinary.

Traditionally, frozen Japanese chum salmon had always been the most important source of raw material. However, in the last 2-3 seasons situation changed dramatically because of both volume and price. Russian and American fish became more attractive. This year Alaska catch of both sockeye and chum, and even pink was not as good as forecasted. It is one of the major reasons for Chinese buyers' activity at frozen salmon market, particularly Russian origin.

As for Chinese purchase of frozen pink salmon, many experts think that the Chinese party was driven by American and European markets, and hence prospects of Japanese chum production are questioned. In fact, the processors lost interest long before Hokkaido season start, i.e. when there was no information about slow run and high prices. Partially it was explained by new complex import procedures.

It is also mentioned that many American, European and even Japanese consumers accept chum as very expensive product, taking into account quality, particularly in comparison with really high grade salmons such as sockeye, trout, European salmon, or even coho. Pink stays in its market niche, it's price well corresponds with quality, and this is the basis for attractiveness and expanded demand.

Chinese import from US and Russia in August was at about the same level, about 12.5 th.MT. However, American supply increased 18.5% to 2010, but the Russia-sourced import soared up 9.5 times. It doesn't mean seasonal supply will be as large, but it indicates that Chinese buyers and their suppliers started their negotiations from the very beginning of the season. August import to China grew substantially in comparison with 2009 too (added 5.0 MT, i.e. 2/3).  Probably, it indicated Chinese interest to East Kamchatka product, where the harvest was an all-time record of 182.5 th. MT.

Average price was $2.50 CFR China - a bit less than in 2010, but 30-40% higher than in 2009.

Chilean export statistics says that frozen coho supply to China might seriously increase this year. Volume increase in August is treated as a proof of strong prospects of the product in 2011-12 season. Even Japanese experts who believe that Japanese market will be the main one for Chilean coho, estimate increase of supply to China as inevitable.

Chilean export of frozen coho was usually small in August (0.8 th.MT), though it was 1.5 times more than in August. Direct sales to Japan gave just 70% of this volume. Japanese importers say that September activity can be even higher. Total volume of shipments is estimated as 3.0 th.MT, while in 2010 even October shipments were just 1.5 th.MT. Some Japanese importers think that so early start of shipments is caused by fear of large volume and low price. Others believe it is just a compensation of absence of Hokkaido coho this year caused by tsunami.

This year forecast of Chilean coho export to Japan in 2011-12 season is 90.0 th.MT (in 2010 83.5), and total coho import will be over 95.0. As for price, some experts think autumn chum problems would support it at the level of JPY550/kg, but others think there will be problems even keeping JPY500 (about US$6.50 as of today).

Speaking about Chilean trout prices, they say it will be difficult to keep them higher than JPY550/kg. There are a lot of talk that Chilean producers allegedly discontinue export of HG trout and export fillets only, actual HG sales are high enough and prices at Japanese market moved down from US$7.00/kg t $6.00/kg CFR Japan for 4-6 lb size. So, Japanese customers think if JPY is strong enough price could come down below JPY550.