Outlook for new season on Russian squid market

In April 2012 Russian fleets started fishing on the grounds of commander squid Berryteuthis magister in the nation’s Far East Basin and, according to non-official figures, as per 10 April 2012 one of the basin’s leading harvesters Dalmoreproduct Holding Company (plc) caught 570 MT of squid. At the same time, according to vessels’ daily reports, from 3 to 10 April 2012 total production of frozen squid tubes in the Russian Far East amounted to 365,700 MT. Though big fleet will start targeting squid in May 2012, the market participants intently follow development of the situation so that they could form strategy for sales of squid inventories from old catch, report www.megafishnet.com.

More specifically, in mid-May 2012 vessels owned by another two fishing giants Oceanrybflot and NBAMR will start fishing for squid and the first squid from new harvest is expected in Vladivostok in the first ten days of June 2012.

In the meantime, through the recent month the price for squid tubesin Moscow has fallen down by ca.RUR 20.00 per kilo. Traders have been offering the product (arriving at Moscow on 14 April 2012) at a price of RUR 95.00 including cost of delivery to buyer’s coldstore.

According to market participants, current feeble balance is very unstable as big inventories of squid can be found both in Moscow and in the Russian Far East. This will exert great pressure on prices and, which is no less important, on willingness to buy squid on the threshold of the main phase of the new season, because this year many operators have suffered from big losses on squid and prices for squid tubesfrom old catch in the Russian Far East have also fallen by ca.RUR 15.00-20.00 per kilo.

Storage life of such squid is terminating, extension of storage life is possible in case products will go as animals’ feed, which is equal to utilization, therefore holders of coldstore inventories should have to stake on unconditional sale of such inventories.

Traders assign the blame to fishermen who have held high prices for squid and pink salmon too long, while traders working with such products get extremely low margins at the best.

Traders complain that they always work on the edge of risk as they have cost price fixed, while for fishermen cost price is a diffuse parameter as product price is formed under the influence of market situation rather than actual cost of fishing operations. As a result, traders sometimes complain that one day fishermen can offer squid at RUR 120.00 per kilo and the next day they may bring it at RUR 80.00 per kilo.

Table 1. Average monthly prices of squid tubes in 2010-2012 as cited from price-lists of selected market players

Note: The table has been compiled by FISHNET analysts from price-lists of selected companies.

Prices for squid from new catch

As for new season producers forecast that prices for new squid will be lower than in 2011 and will provisionally amount to ca. RUR 80.00. Even if the fishery situation is unsatisfactory, prices for squid tubes will not grow higher than RUR 100.00 per kilo.

As Russia’s export and import of squid are not big, the product supply on the domestic market is influenced mostly by own catch which in 2011 amounted to ca.70,000 MT according to the National Monitoring Centre for Fisheries and Communication.

Table 2. Squid catch in Russia’s Far East in 2010-2011

Note: The table has been compiled by FISHNET analysts from figures of the National Monitoring Centre for Fisheries and Communication.

Capture quotas 2012 have been left practically unchanged as compared to the previous year, thus catches will most probably remain also unchanged, though a certain part of the quota has been constantly uncovered and this causes some uncertainty.

Table 3. Capture quotas for B.magister squid in 2009-2012

Note: The table has been compiled by FISHNET analysts from figures of the National Monitoring Centre for Fisheries and Communication.

Export

Squid is not exported from Russia as the international market is not aware of B.magister squid, but has got used to illex and giant squid. Squid tentacles, namely some 2,000-3,000 MT per year, are usually exported to China.

Table 4. Russia’s export of frozen squid in 2011 (HSC 0307495900 “Other squid, frozen”)

Note: The table has been compiled by FISHNET analysts from figures of Russia’s Federal Customs Service.

Import

Russia’s squid import has been on a rise, though the total volume of shipments has been not very big.

Table 5. Russia’s export of frozen squid in 2009-2011

Note: The table has been compiled by FISHNET analysts from raw figures of Russia’s Federal Customs Service.