Overview of key markets for fish products from Russian and American Pacific fisheries as per 2nd week of September 2010

As per the 2nd week of September 2010 the main attention of Pacific seafood traders has been still attracted to progressing salmon fisheries, especially on the Japanese and Canadian grounds. Interest of the market traders has been also pin the situation on the markets of pollock fillets and snow crab, according to the overview prepared by analysts of http://www.megafishnet.com/ based on Japanese, Russian and American sources.

Salmon

In the first half of September 2010 the main activity of the Pacific salmon fisheries has been practically completely shifted to Japan where from the end of August 2010 the autumn fishery for chum salmon took off. All the market specialists agree that the main feature of the current season has been in extremely strong delay with the start of the spawning run of autumn chum salmon and exclusively slow development of landings of fresh chum salmon from the inshore fixed seine fisheries in Hokkaido, but still in the end of the first decade of September 2010 there was a very strong increase of catch rates and landings.

The season took off on 24 August 2010, however through the first week of the month the fishermen harvested only ca.700 tonnes, and by the beginning of September 2010 the total landings were still far from the level of 1000 tonnes, which was reached last year. On the first days of September 2010 the catch rates and landings grew, but still remained much lower than last year. The seasonal landings as per 5 September 2010 amounted to only ca.1700 tonnes, practically 3000 tonnes down on last year. Though the level of prices for landed spawning females (the best raw material for production of high quality caviar) exceeded the last year result, but not always and mostly by less than 10% remaining at 600 Yen per kilo, while the landing prices for males were much higher (namely by 30-35%) and mostly settled at least at 300 Yen per kilo.

Dramatic increase of the catch rates was recorded only on 9 September 2010, when the total volume of landings to all the areas of Hokkaido approximated the level of 1000 tonnes for the first time from the season start and amounted to ca.920 tonnes. On the following day landings already reached that level and on 12 September 2010 they grew by another 20% to ca.1200 tonnes. However, those results were much lower than the last year indices, when within those three days the fishermen harvested more than 5000 tonnes of autumn chum salmon.

The total volume of seasonal harvest in Hokkaido by the start of the current week amounted to only ca.6300 tonnes, 57% down on last year. However, local processors and other users kept cool, which was also one of the main peculiarities of the current season as compared to the previous one when a very weak forecast for the season in combination with a comparably slow start of the season encouraged many processors for excessive purchasing activity. At that time, it led to a very serious rise of landing prices, especially for females, which in a current price situation on the market of sieved roe (and sack roe as well) gave practically no chances for roe product sales to compensate for expenses on purchases of the raw material at very high prices.

Last year landing prices for spawning chum salmon females in such key ports of East Hokkaido such as Sibetsu and Rausu by the end of the first decade of September 2010 started reaching the level of 600 Yen per kilo. In the beginning of the second decade of the month the prices went up to more than 650 Yen per kilo and headed for 700 Yen per kilo (at that time it approximated 6.80-7.30 USD per kilo), the average daily catches in that period exceeded 1500 tonnes and reached 2000 tonnes. And in the current year such volumes of landings were not observed at all, but prices for females only rarely reached the level of 600 Yen per kilo. On 11 September 2010 after a noticeable increase of landings they mostly descended below 550 Yen per kilo and partly even lower than 500 Yen per kilo (with the current exchange rate of Yen it approximately corresponds the level of 6.00-6.50 USD per kilo).

In this connection all more or less leading and large buyers stuck to extremely cautious and circumspect policy in raw fish purchases at the early stage of the season and that actually corresponded the expectations in general.

At the same time, landing prices for males were either much higher or in keeping with the last year indices. The market specialists interpreted that as signs of serious confidence of Hokkaido and other processors in a possibility to use HGT chum salmon for production and sales both of fresh and salted products on the domestic market, and frozen products for export, especially to China as the Chinese processors showed stably active interest in the Japanese raw material up to the start of the current season.

The total volume of landings of autumn chum salmon on Hokkaido from the year start by 13 September 2010 was limited only to 9000 tonnes, while last year the fishermen landed at least two times more products. The season 2008 was described as no success, however even then, by 14 September 2008 namely, the fishermen landed as much as 12,000 tonnes.

But, nevertheless, the landing prices did not reach big heights thanks to exclusively weighted policy of main buyers and users working in leading landing ports, especially in eastern Hokkaido. More specifically, on 14 September 2010 landing prices for spawning females mostly declined below 500 Yen per kilo, namely to ca.485 Yen per kilo, and prices for silverside females descended to 455 Yen per kilo or less than 5.50 USD per kilo.

Actually, landing prices of less than 600 Yen per kilo have not been observed in the middle of September since 2006. Then the upper border settled at 550 Yen per kilo, and the lower border was at about 480 Yen per kilo, and even smaller prices were observed in the season of 2005 when they partly were even lower than 350 Yen per kilo. Such prices for the raw material would be very welcome for the producers of sieved caviar, however that would be hardly possible with such limited landings.

However, prices for males did not show any serious downward movements with prices still remained at much higher than 200 Yen per kilo often reaching the level of 250 Yen per kilo (3.00 USD per kilo). Prices for silverside males reached even 400 Yen per kilo (ca.4.75 USD per kilo). If the Chinese buyers show stably strong interest in the Japanese raw material, even with such high prices for the raw material the Japanese producers will have no problems with sales of frozen chum salmon, but active purchases at such prices could not be risky.

Along with the situation on the Japanese grounds of autumn chum salmon, interest of the market traders has been also stuck to the situation on the Canadian grounds of sockeye, where the conditions have been cardinally different from last year and from the situation observed on the sockeye grounds of the Frazer River at least in the recent five years.

More specifically, as per 10 September 2010 the volume of seasonal harvest of sockeye in the Frazer River practically reached the level of 9 million fish, and together with commercial fishery in the USA it reached the level of 10 million fish namely amounting to ca.11 million fish. The figure actually exceeded the previous highest result reached in 1997 when the fishermen harvested ca.8.6 million fish on the Canadian grounds and ca.1.6 million fish on the US grounds. Thus, the sockeye landings only to Canadian processors, frozen products of which normally enjoyed a demand from the Japanese users, has already reached the level of 24,500 tonnes (under the most modest estimates), and on the US grounds it entered the level of 5000 tonnes, while last year the commercial fishery of sockeye in the Frazer River was not allowed due to the most serious concerns about the condition of its commercial stocks and the need to fill the spawning grounds.

The total volume of spawning runs of the above mentioned sockeye as per 10 September 2010 was estimated by the Canadian and US specialists at about 21 million fish, of which more than 9 million fish were let to the spawning grounds. More or less latest forecast of seasonal runs has been exceeded again and now its estimate amounts to 34.5 million fish. At the same time, on the ways of the spawning runs, including those in the Georgia Strait, there has already stayed a stock of ca.14.5 million fish and the probability of continuing runs is not excepted, as active commercial fishery is no doubt to continue though the need to let coho salmon (also running in the Frazer River) to the grounds among other factors should also be taken into account.

However, the Japanese market specialists keep saying that there will be no direct dependence between such a large harvest of sockeye in Canada and activity of the Japanese purchases of Canadian products. At the same time, the total landings on the Canadian and US grounds have already reached the level of 30,000 tonnes, and such volume of the raw fish could not be completely realized either on the local markets of fresh fish or as canned products. Therefore, a considerable share of the raw fish will still be headed for production of frozen products and the conventional main market for them will be Japan and the Canadian producers will be hardly willing to ignore sales onto it.

In the current year the sockeye harvest has turned out to be far from as large as it has been forecasted to be, and on the Russian grounds the sockeye catch has also been below the forecast in the beginning of September 2010. On the grounds in the Bristol Bay which has become the main if not the only source of shipments from Alaska to Japan, catches stopped fixing already in the end of July and official figures still told that the total harvest amounted to 28.7 million fish, 6% down on forecasted (30.5 million fish) and 7% down on 30.9 million fish harvested in the season of 2009.

In general, in Alaska as per 6-7 September 2010 the total harvest of sockeye has been registered only at 40.6 million fish (provisional figures). The actual result of the season 2010 has turned out to be more than 11% down on the forecast (ca.45.8 million fish) and 6% down on the result of 2009.

On the Russian grounds as per 5 September 2010 when the runs were practically ceased the sockeye harvest has been registered at only 30,500 tonnes, 17% down from the allowable catch of 35,700 tonnes. In the West Kamchatka where the Japanese market received the main volume of the Russian products from inshore operations, the harvest was limited to less than 20,000 tonnes, 1500 tonnes down from the forecasted result.

Comparably weak catch results on the Alaskan and Russian grounds and worsening prospects for shipments of frozen sockeye from those fisheries to Japan became one of the grounds for importers and sellers to raise prices to the level of 700 Yen per kilo.

Alaska pollock

By the beginning of September 2010 the situation on the Russian grounds of Bering Sea pollock has been comparably favourable, catch volumes starting rising and the size structure growing much better. Under some information, the situation with prices for the Chinese purchases has also considerably improved (probably, partly due to better size structure). For instance, prices have returned to the level of 1300 USD per tonne and there have even been reports about sales at CAF prices of 1350 USD per tonne. In the meantime, the situation with sales in China itself has showed that holders of coldstore inventories from the winter-spring season have been trying to keep prices from falling below 1400 USD per tonne (ex-coldstore Qingdao). However, that has become really a challenge for them due to a fairly large volume of coldstore inventories caused by large seasonal shipments. Reports speak about sales at 1300 USD per tonne and even lower at 1280 USD per tonne namely.

According to the Japanese importers, on the US grounds even with a fairly big decline of the weekly harvest the summer-autumn season B could get closed already on the current week of September 2010. At the same time, according to the official catch records on the fishery progressing, by the middle of the first decade of September 2010 the harvest has grown nearly by 6% on last year and amounted to ca.454,000 tonnes, while fillet production has gone down by more than 11% to ca.53,500 tonnes, while production of pollock surimi rose by more than 10% to 46,500 tonnes.

In July 2010 when traders started actively shipping products from the season B, the volume of the US export of pollock fillets declined by more than 31% to only 8500 tonnes. The dominating share of July shipments was directly forwarded to Europe and the volume of shipments to China turned out to be 83% smaller than last year and amounted to only ca.500 tonnes, while shipments to the South Korea (exceeding 500 tonnes last year) were not registered at all.

The average export price (FAS, ex-transport) turned out to be 12.5% higher than last year and amounted to nearly 3.45 USD per kilo, while in general through the period from the start of the year it practically did not differ from the last year result and amounted to nearly 49,000 tonnes. There was a considerable decline of fillet production on the US grounds of feeding Bering Sea pollock strengthening price positions of US producers, but that could be also to the benefit for the Russian producers of onboard frozen fillets, as well as to the Chinese producers of double frozen fillets, who continued working mostly on the Russian raw material.

Snow crab opilio

The general situation on the market was again strongly defined by strong market conditions in the USA. There prices of real sales of Canadian products (brine frozen) already in the beginning of September 2010 settled at the level of 5.00-5.50 USD per pound of main sizes, namely at 11.00-12.00 USD per kilo, while in the first week of September 2010 the upper border of the price range reached the level of 6.00 USD per pound or 13.20 USD per kilo. Many market specialists think it a token because if prices settled at that record high level, it would mean that both users and the market itself had already adapted to new and very high prices (a couple of months ago the level of even 5.00 USD per pound was called as inadmissible and even dangerously high) and they had already caused no resistance.

Thus, no serious obstacles on the way of their further rise are expected, and in this connection the strongest interest has been caused by the reports that forecasts on prospects for shipments of national products (Alaskan namely) to the US market remain unfavourable. At the same time, a special attention has been paid to the fact that well grounded concerns have been caused by the condition of the commercial stocks of not only snow crabs, but red king crab in Alaska. Prospects for introduction of new and much stricter plan of snow crab fishery management have been practically definite, and now the reports say that commercial stocks of red king crab in Bristol Bay by the end of the current year will come down by 13%. Taking into account that recruitment of the stock has been developing slowly, pessimists say it may lead to a decision on suspension of commercial fishery in the near future.

That should be considered an extreme point of view, however the situation with the supply of red king crab on the US market in the most foreseeable future could be even more difficult as under current conditions for the Russian fishery no rise of shipments could be expected. Some other market specialists thought that a quick rise of prices for snow crab opilio on the US market, especially large sizes, was at least partly caused by a switch of users from the market of red king crab where the supply became very limited due to a strong decrease of imports from Russia.

By the beginning of August 2010 it failed to reach even 6500 tonnes, nearly 35% down on last year, in June and July 2010 import shipments totaled only 600 tonnes. Shipments of frozen snow crab opilio from Canada were also not limited, moreover by the end of August 2010 they already declined by 20% or 8000 tonnes failing to reach even 31,500 tonnes. Under those conditions dynamics of shipments of frozen Russian snow crab to the USA could not but cause interest as the activity of such shipments grew in May and in June and in July the import shipments totaled already ca.1000 tonnes (a record high result). Quite probably, the rise of shipments of Russian products will at least partly encourage weakening of fishery pressure on the US grounds, moreover for the Russian producers it would be quite attractive under the current difficulties on the grounds of red and blue king crabs (golden king as well).