Japanese buyers complain of unexpected high prices for Russian pink salmon roe

In mid-August, Japanese importers started purchasing frozen salmon roe from the new season. The Russian product came into the focus first because of the early rise to high catch rates in the Kamchatka salmon fisheries. With the pink salmon harvest hitting a record 393KT as per 17 August, the prices of the first purchases disappointed the Japanese users, since they were almost as good for the Russians as last year's, despite the big current harvest.

According to Japanese seafood media sources, in parallel with the information about the planned sales in the auction form, the sales began based on the results of direct negotiations between Russian sellers and Japanese buyers. As usual, there is very little concrete information about the results of these negotiations, but the market has already received reports about the start of purchases at a price range of US$32.00-34.00/kg.

This is actually the same level that was recorded last fall, when, as part of auction sales, prices for Russian pink salmon roe rose almost twice year-on-year reaching the range of US$33.00-34.00/kg (CAF Japan).

At the same time, even the interim result of the current fishing season indicates a real possibility for a significant expansion of the supply, since in mid-August, pink salmon catch in Russia reached 380 thousand tons and exceeded the result of the 2020 season by 115%, which was limited to 175 thousand tons.

Taking into account also a very strong increase in catch in Alaska, where by mid-August, pink salmon harvest rose to 100 million fish. In fact, it exceeded the result of the 2020 season by at least 65%, and the growth in the total supply of frozen pink salmon roe (the Russian product inclusive) for the Japanese market in general may be exceptionally strong.

Market experts draw attention to the fact that negotiations on the procurement of Russian products from the new season began earlier than usual, as the producers, facing difficulties in shipping to China and South Korea, took steps ahead of schedule.

Nevertheless, in terms of prices, the results of the first purchases discouraged Japanese producers of ready-made salmon caviar, who hoped that, in anticipation of a strong catch increase, the Russians would agree to a serious softening of prices at an early stage of roe sales from the new season.

One of the main reasons for the prices again reaching US$30 / kg or more has to do with a shortage of inventory carried over from 2020. In addition, the strong demand for frozen roe is already being displayed not only by the Japanese, but also by the Russian market, and this really steps up the competition between the buyers. And an equally serious problem is that the chum salmon fishery, unlike the pink salmon fishing, shows far from the most impressive results, and this weakens the overall supply potential.

Preliminary calculations show that for the Japanese users, the net purchase price of Russian products at contract prices of US$32-34 / kg at the current yen exchange rate may approach a very high level of 4000 yen/kg, amounting to approximately 3800-3900 yen/kg. Taking into account certain processing losses, labor costs and other expenses, only the production cost of pink salmon caviar in soy sauce from frozen raw material can reach the level of 6000 yen/kg (about US$54.30/kg).

It turns out that for almost a year the Japanese market of salmon roe has been living in conditions of very high prices, which create certain risks in terms of demand stability, but, nevertheless, sales data in the system of wholesale fish markets do not yet say anything about the weakening of buyer activity.