By: Les Hodges
Russian processors delivering only live Red King crab – abandon the U.S. and Japan?
Russia has opened the Red King crab season in the Far East with initial reports showing that all processors fishing for Russian Red King crab to date are currently producing live primarily for the China and Korea market. While some legal crab should be delivered to Hokkaido, the profitability of live King crab and Snow crab is such that many Russia processors are walking away from the U.S. and Japan processed markets. The Russian producers are expected to push as much live King crab as possible this fall.
The U.S. market continued to increase by another 3+% on what little mid-size King crab remains in the system. The only stable prices are large 6-9 count Red king crab and 9-12 count Red King crab. Although the quota on Russian King crab is about the same as 2014, the impact of the live deliveries to date to Korea and China has left the U.S. market short.
NATIONAL & REGIONAL ANALYSIS (China, Japan, Korea, Norway, Russia & U.S.) >
The Russian government announced plans to initiate new talks with the Chinese government to contain the increased amount of IUU crab shipped to China from Russian poachers. There is a package of agreements in place but have not been effective.
Russian crab producers have started the fall Red King crab season producing live primarily for China. They have improved the infrastructure 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.
With the large increase in volume of live Red King crab, there is a question as to the ability of the market to accept without price reductions. With the major hit to the China stock market and currency devaluation, consumers may not feel the ability to go to the very fancy restaurants where most crab is served.
While the ¥ has come back from the 125¥/USD to 119.9¥/USD, the crab markets still remain weak.
Japan imports in 2015 of all crab including meat are down -23% through July at 22,448 m/t vs. 29,014m/t in 2014.
July crab deliveries on processed Opilio were -6% vs. prior year with 3,890 m/t imported in July and 11,759m/t (25.934mm lbs.) year to date vs. 12,530m/t (27.624mm lbs.) in 2014. Most product was Russian or Canadian. Prices were up 7% compared to prior month. Live Snow crab is down -85% in July and -76% vs. 2014.
Processed King crab imports were down in July vs. prior year to 32 m/t, and year to date imports are down -58%. Total imports year to date through July are 1,087m/t (2,396mm lbs.)vs. 2,592 m/t (5.714mm lbs.) in 2014. Live King crab imports from Russia were down -67% in July and are now -78% vs. 2014 YTD.
This is a slow time with little Russian fishing effort, but Korean Customs data for July reports imports of 397 m/t of live snow crab and 296 m/t of live king crab. Year to date through July live snow crab is the largest import with 3,935 m/t (8.675mm lbs.). Live King crab imports are 2,249 m/t (4.958mm lbs.) through July.
Total imports of crab to Korea are 1,381 m/t (3,044mm lbs.) in July and 13,484 m/t (29.726mm lbs.) year to date. This number includes Chinese Swimming crab.
A Norwegian crab producer had a seminar on August 20 in Tokyo at the Japan Seafood show to promote live crab sales to Japan. Although through July no sales of Norwegian live King crab were made to Japan there is an opportunity. The Norway King crab season begins on September 5 with a quota of 1,300 m/t which is 200 m/t larger than 2014 and there is a push for live King crab sales to Asia in addition to the main market of South Korea. The Minato Shinbum newspaper reported that expected catch including the free catch areas would be about 2,000 m/t.
There are 17 vessels fishing in the Russian Far East as of September 1 as the fall season gets underway. All 7 processors fishing Red King crab are fishing for live crab along with one on live snow crab. The remaining crab producers are fishing for cooked deep-water snow crab.
Not all processors are set up to catch and deliver all live, so there should be some processed Red King crab of a size that could help replenish the mid-size Red King crab in the U.S.
In the Barents Sea fishery, there are 35 vessels in some stage of fishing and processing with most on Opilio. The number of vessels fishing for Opilio has grown substantially over this year and this source will become increasingly more important to both the U.S. and Asia Opilio markets.
U.S. imports of Russian King crab in July were up 8% vs. July 2014 at 2.150mm lbs. vs. 982k lbs. in 2014. However, year to date imports continue to be -18.9% at 10.917mm lbs. vs. 13.470 mm lbs. in 2014. Santolla southern Red crab imports for July comprised 318k vs. 555k in 2014. Including this product the total imports through July are 15.488mm lbs. vs. 17.399mm lbs. in 2014 or down -11%.
Mid-size Russian Red and Brown King crab market prices increased another 3% in August. With the changes in the Russian fishing effort, we can expect to continue to see continued shortages of mid-size crab and price pressure. Since May, prices are up depending on size from 11-19% on mid-size crab.
Larger 9-12 and 6-9 Red King crab held steady and represents a tremendous value.
U.S. – Alaska:
The Alaska Aleutian Islands Golden King crab fishery is open with deliveries expected soon.
The Alaska Bering Sea Red King crab fishery is scheduled to open October 15. Quotas for various crab species have not been announced at this time for the 2015-2016 season.
U.S. – Retail:
Salmon and shrimp continue to lead retail seafood ads 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.
U.S. – Snow Crab:
Imports of Snow crab continue at levels above 2014. In July total U.S. imports were 20.445mm lbs. vs. 19.812mm lbs. in 2014. Total imports through July are 85.691mm lbs. vs. 82.369mm lbs. in 2014 up 4% overall.
Alaska Opilio Snow crab remains 12% cheaper now than July 2014 and supplies somewhat limited. 8 up Alaskan are mostly gone and 5-8oz product is moving in the low $5.00 – $5.15 range. This presents a very good value based upon size and quality.
Canadian Snow crab harvest is done with 47,391 m/t harvested in the 2015 season. There appears to plenty of 5-8 oz. and the market has been sloppy with sales made as low as $4.70/lb. Boston with part of the reasoning according to sellers reflecting the weakness of the Canadian dollar. Prices have been firm on the larger sizes with 8ups selling in the $5.45 range. 10ups and larger are very short in supply with prices over $6.00/lb. and higher. One should look at Russian Barents Sea Opilio if larger size crab is required for a program.
Alaska Bairdi Snow crab season is also finished and most has been consumed. There is available a limited amount of Under 12oz Russian Bairdi Snow crab inventory.
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. As deep water snow crab prices get closer to Opilio, the value is reduced.
U.S. – Santolla Southern Red crab:
Argentine Southern Red crab that is reported under the king crab category was off -42.6% in July although the year to date remains up 15.1% at 4.414 mm lbs. This item represents 15.1% of the King crab category.
New season for Santolla begins in October with deliveries around the end of the year. Inventories are good and sales are said to be somewhat slow.
U.S. – Dungeness crab:
The recreational and commercial Dungeness crab fisheries were reopened on September 1 on the northern coast of Washington. However, the southern Washington coast for Point Chehalis and south remains closed.
In the 2014-15 season, Southeast summer Alaska Dungeness season harvested a record 5miilion pounds vs. a 10-year average of 3.78mm lbs. The just closed fishery in 2015 was a disappointment coming in at just over 2.5mm lbs.