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Seafood Industry News

Posted on August 5, 2015 by

Crab Market Report, August, 2015

August 6th, 2015
By:  Les Hodges
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Summary:

The long days of August are here with deliveries of new production King crab not adequately filling the gaps in the inventories. We are looking at a very tight U.S. market with prices now at last summer levels or above on most items and the industry looking forward to the fall when serious fishing begins again. Although deliveries continue in Asia of Russian King crab, relief may not be felt until mid to late October.

It was reported today that the Obama administration is having the National Ocean Council Committee on IUU Fishing and Seafood Fraud beginning its public comment period with a focus on Pacific cod, red snapper, shrimp, and of course King crab.   Unfortunately, some associations are using outdated data to present Russian King crab as having a ongoing severe IUU problem when its been mostly cleaned up over the last 3-4 years. This due to increased Russian enforcement, treaties, and U.S. importer document requirements.

The Russian King crab season begins in earnest in September with most of the Red King crab and the remainder of Blue and Brown King crab to fish. Until new production King crab arrives Snow crab is the most promotable item. About 70% of current retail ads feature mainly Alaskan or Canadian Opilio Snow crab.   Bairdi Snow crab of course is the object of some, but quantities are very limited.

China:

Russian deliveries for the China /Korea market changed in June were primarily Opilio Snow crab. Six vessels are currently fishing live for the China market and as of 7/22/15. Russian producers are working to improve the infrastructure now to prepare for the fall red King crab season with the goal of delivering more crab direct to China rather than trans ship through Korea.

The wild card appears to be the overall slowing and maturing of the Chinese economy. With the declining stock market, consumers may not feel the ability to go to the very fancy restaurants where crab is served.

Japan Market:

The Japan importers settled their prices on Canadian gulf Snow crab at 4-6% cheaper in USD than 2014. Still due to the weaker ¥ (123.9/USD) the purchasing costs are the highest on record according to the Minato-Tsukiji newsletter. It is estimated that Snow crab meat producers need to increase their prices by 300-400 ¥/kg and the trade is resisting.

Japan

Imports for June clearly indicates a continued shrinkage in crab deliveries with the exception of Opilio which is 99% of prior year with 2,584 m/t imported in June and 7,869m/t year to date vs. 7,945 m/t in 2014. Live Snow crab is down -65% in June and -73% vs. 2014.

Processed King crab was up in June vs. prior year to 109 m/t, but year to date imports are down -56% at only 1,055 m/t vs. 2,392 m/t in 2014. Live King crab imports from Russia were down -69% in June and are now -65% vs. 2014 YTD.

Korea:

Korean Customs data for June reports imports of 315 m/t of live Snow crab and 385 m/t of live King crab. Year to date through June live Snow crab is the largest import with 3,536 m/t. King crab imports are 1,953 m/t through June.   Total imports of crab to Korea are 1,707 m/t in June and 12,103 m/t year to date. This number includes Chinese Swimming crab. This has become a major market for Russian producers.

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The Korean economy has moderated continuously this year. The Korea economy is dependent upon export rather than domestic sales and they continue to have difficulty competing with China. With the leveling off in July of the recent MERS outbreak and a government 14.3 billion USD supplemental budget aimed at tourism and retail there is projected a rebound in foodservice.

August is a strong vacation period in Korea and also summer bonus season for workers who have developed a taste for crab.

The seafood buffet restaurant has become very popular in Korea and many serve Opilio and deep water Angulatus and Japonicus. U.S. importers face increased prices on the deep water crab due to this Korean domestic consumption.

Norway:

Norway is now targeting Japan as a new market for live Red king crab according to industry sources.   The live King crab market for Norway has been growing in recent years moving from 117 m/t in 2012, 318 m/t in 2013, and 669 m/t in 2014 with the largest market being S. Korea. It takes only about 30 hours from when they begin packing to delivery!

Now a major seller of Norwegian live king crab will be going to the Japan International Seafood Show this month to present this product to Japan buyers. While more expensive than the Russian live King crab the seller believes that this will be a good market. For Japan, Russia was the only source for live King crab in the past, but the successful efforts to curtail IUU fishing may have created an opportunity for Norway.

Russian Crab Fishing:

There are only 28 vessels fishing in the Russian Far East as of July 22. We should see the effort begin to increase again in September as we move into the fall season. Of the vessels fishing, 32% are fishing live crab for the Asia market. We are between seasons on Blue Bing crab and red king crab season has not started yet, so the major effort remains on Opilio and Deep-water snow crab.

Several major Russian producers have built an infrastructure to accommodate the expected increased volume of live crab to Asia this fall. There are 11 vessels fishing opilio with 6 from the Primorie South region fishing live crab. Eight vessels continue to pound away on deep water Angulatus and Japonicus snow crab with more than 300 m/t on board as of July 22.

In the Barents Sea Opilio fishery, it is reported that everyone is experiencing down time with catch and production down. We estimate about 1mm lbs of snow crab from this region were delivered to the U.S. in June.

U.S. Market:

U.S. Market >  Alaska:

The Alaska Aleutian Islands Golden King crab Fishery opened August 1 with a 2,853 m/t quota (6.290 mm lbs.). This is a long season stretching from August 1 to April 30, 2016.

U.S. Market > King Crab:

U.S. imports of Russian King crab in June 2015 were up 6.6% vs. June 2014 at 1.991mm lbs. vs. 1.867mm lbs. in 2014.   However, year to date imports continue to be -29% at 8.767mm lbs. vs. 12.488 mm lbs.

U.S. Market > Dungeness crab:

The Canadian season is over and the Alaskan South East season is taking place. The closure of the Washington Dungeness crab Fishing in Washington due to demonic acid levels has left the industry with fewer new inventories and market prices firm and climbing.

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The toxic algae bloom has also reached Southeastern Alaska and is being monitored at the time of this report.

In the 2014-15 season, Alaska harvested a record 5 million pounds vs. a 10 year average of 3.78mm lbs. The new season catch is forecasted lower, but quality is very good and large size sections with some harvesters reporting 10oz average.

U.S. Market > Retail:

BBQ salmon and shrimp were the winners for July with 75+ salmon ads and 115 shrimp ads every week!

U.S. retail support for crab also continued solid in July with an average among major retailers of 32 per week.  Almost 70% of the ads were on snow crab.  It is interesting that large Red 6-9 count King crab price is down -9%. vs. the same time period in 2014.   This is an exceptional value.

Mid-size Russian Red and Brown King crab market prices increased 3-4% in July slowing the climb up in price from prior months. Brown king crab mid size also increased at a slower pace of 3-4% in July,

U.S. Market > Santolla Southern Red crab:

Argentine Southern Red crab that is reported under the King crab category was similar to 2014 with year to date up 14.7% at 4.097 mm lbs. This item now represents 14.7% of the King crab category.

 We are between seasons on this product with new season beginning in October and deliveries around the end of the year. Inventories are good and sales are said to be somewhat slow.

U.S. Market >  Snow Crab:

Imports of Snow crab soared in June 2015 to 42.085mm lbs. Vs. 30.413mm lbs. last year for the same period. Russia contributed 1.1mm lbs. and overall Snow crab was up 35.6% for the month and is now up 4.3% for the year to 65.246mm lbs. vs. 62.557 mm lbs. in 2014.

 The Alaska Snow crab season is finished with 67.9mm lbs. landed. Alaska Opilio snow crab remains 12% cheaper now than July 2014 and supplies somewhat limited. Most 8up and larger size product is sold and 5-8oz product moving in the low $5.00 – $5.25 range.

Canadian snow crab harvest is winding down with 93% done at 46,835 m/t being harvested and only 3,518 m/t remaining as of 7/28/15. The Japanese bought a considerable amount of crab even with the weaker ¥, but less cooked brine for meat and more raw frozen said to replace the IUU Russian deliveries to northern Japan. Prices have been steady in the $5.00 range for 5-8oz and $5.75 range on 8ups. 10ups and larger are very short in supply with prices over $6.00/lb. and higher Boston.

Alaska Bairdi snow crab season is also finished, as is most of the existing inventory. Several major food service companies and retailers picked up on this great item and promoted with good success. There is a limited amount of Russian Bairdi Snow crab inventory mainly in the U12oz category.

Russian Deep-water Japonicus and Angulatus Snow crab inventories in the US are lower than last year at this time and sellers trying for higher prices. However, as the prices get closer to Opilio the value decreases.