By: Les Hodges
As we enter the holiday season, the team at Keyport would like to wish all a very happy holiday season and express our thanks to our customers, suppliers, and friends who support us.
The 2015 Alaska Bering Sea Red King crab fishery is completed. U.S. buyers ended up paying the same basic prices as Japan importers to obtain product for U.S. domestic customers.
This has resulted in a duel pricing level for King crab market in the U.S. for the holiday season. Alaska Red and Gold King crab are selling at prices significantly above Russian King crab.
In Asia, live King and Snow crab inventories in Donhae, Korea are exhausted and prices increasing quickly. The end of the Russian Red King crab Fall fishery is coming, as is the holiday season.
The live crab business in the Russian Far East has been a success for Russian producers and a major factor in the limitation of King crab supplies to the U.S. and Japan over the past year. The margins to the Russian producers are simply much larger than processed product and those who can are still delivering live crab primarily to Korea and China.
This month’s newsletter is divided into two sections: one, a section on “REGIONAL CRAB FISHING” which details the latest harvest data; and two, a section on regional “REGIONAL MARKET UPDATES” which discusses imports, marketing trends and more.
> REGIONAL CRAB FISHING >
Alaska Crab Fishing:
The Bering Sea Red King crab fishery for 2015 is finished with 100% of the IFQ quota being taken as of 11/30/15. 8,972,562 lbs. were harvested and quality is excellent.
The Alaska Aleutian Islands Golden King crab fishery continues with product in Seattle now. Quality is again excellent, but size has been running smaller than anticipated.
The Alaska St. Matthews Blue King crab fishery quota was announced and there is a major reduction of 38% from 665,000 lbs. in 2014 to 411,000 lbs. in 2015. No catch results have been reported as of this date.
The Alaska Opilio quota for 2015/6 was reduced 40% from last year’s 67mm lb to 40.6 mm lbs. and fishermen are expecting higher prices. The market sold through well at last year numbers, but marketers could struggle if market increases materially. No real effort on this fishery as of this time as only 457k or 1% has been harvested.
Alaska Bairdi Snow crab has a larger quota in 2015/16 moving up from 15.1mm lbs. to 19.66 mm lbs. Fishing is taking place only in the Eastern Bering Sea at this time. 34.495mm lbs. have been taken as of 12/7/15. Inventories are available now in Seattle.
Norway Crab Fishing:
The Norway King crab season began on September 5 with a quota of 1,300 m/t. The quota for 2016 has been increased to 2,000 m/t. Also, the opening date has been changed to January vs. September.
Japan was the primary market for Norway on King crab in October receiving 95 m/t with U.S. importing 330 m/t of Snow crab. These are large increases vs. 2014.
Russian Crab Fishing
There are 32 Russian vessels fishing crab in the Far East as of November 24,2015. An additional crab fleet of 30-35 catcher processors works in the Barents Sea area for Opilio.
8 Far East processors are fishing Red King crab with 5 for the live market and 3 further processed. The effort on blue crab is similar with 6 vessels fishing 5 on processed and 1 on live crab. An additional 4 fishing for processed Brown King crab.
Opilio snow crab fishing effort in the Russia Far East has decreased with 6 currently fishing processed and one on live. 5 vessels were processing Deep Water Snow crab of which all are processing cooked product.
In the Barents Sea fishery, there are 30 vessels in some stage of fishing and processing with most on Opilio. Of this 10 are Russian flag vessels fishing in the Russian Zone and 20+ processors fishing Opilio in the international waters. It is estimated that the Opilio 2015 harvest from this area will be between 15,000 to 20,000 m/t. The Barents Sea fishery should more than make up for the reduced Alaska Opilio quota in 2016.
REGIONAL MARKET UPDATES >
The China market remains steady with prices improving. The mass China population avoids the purchase of most premium seafood including crab. At the same time it is apparent that the wealthy Chinese consumers like King crab. Currently it is reported that 90% of the Canadian Dungeness product is moving live to China.
The ¥ is 4% weaker in December 2015 vs 2014 @ 123.3¥/USD.
Japan imports through October 2015 of all crab including meat continued its slide vs. 2014 being down -18% through October at 37,469m/t vs. 45,960m/t in 2014.
Snow crab is a bright spot as is +4% compared to King crab at -46% year to date through October. Processed Opilio imports in October were up 90% vs. prior year at 3,437-m/t and 21,708/t (47.857 mm lbs.) year to date vs. 20,993m/t (46.281 mm lbs.) in 2014. Largest suppliers were Russian followed by Canadian and U.S. Deliveries from the vessels fishing in the Barents Sea area also continue to increase.
Processed King crab imports by Japan were 379 M/t in October vs. 424m/t in 2014. Total imports year to date through September are 1810 m/t (3.990mm lbs.) vs. 3,331 m/t (7,344 mm lbs.) in 2014.
Japan live King crab imports from Russia were also weak in October with legal landings to 227 m/t. This category is down -69% vs. 2014 YTD.
Alaska Bering Sea Red King crab contracts were settled in the $15.00/lb. range delivered main Japan Port. Inventory of King crab is low in Japan so buyers who must have Red King crab for the holidays have little choice especially noting the high percentage of Russian far east processors fishing for the live market.
Korea imported 337 m/t of live Snow crab and 437 m/t of live King crab in October.
Year to date through October Korea has imported 4,874 m/t (10.745mm lbs.) of live Snow crab and 3,252m/t (7.169mm lbs.) of live king crab.. Live King crab prices dropped below $20.00- $25.00/kg in October before rebounding in November. Due to the upcoming end of the Russian red King crab season, the price of live red King crab is increasing quickly.
There is little inventory of live King crab at Donghae in late November and good demand for both live and frozen King and Snow crab. Total imports of crab to Korea are 17.195 m/t (37.910 mm lbs.) through October.
King Crab >
Alaska Red and Brown King crab has been established at much higher levels than Russian product. Limited supply and strong retail demand combined with significantly higher prices for bulk Alaskan King crab set the stage.
This has created a duel pricing level for King crab. Quantities are very limited on Alaskan King crab and most should be gone by the end of the year.
Russian Red king crab prices stayed in the same tight range as in October. Russian producers are trying to increase prices after realizing the difference between Russian and Alaska prices. However, demand remained soft for Russian King crab and prices have not gone up.
U.S. imports of Russian king crab in October were down again vs 2014 at 885k lbs. Year to date imports of Russian King crab are -26% at 15.813mm lbs. vs. 21.291 lbs. in 2014. We believe that Russian King crab supply for the U.S. will continue to be short in spite of a larger quota for 2016. This is a direct result of Russian processors fishing live King crab vs. processing their catch in the Far East Russian fishery.
Including the smaller Argentine Santolla Southern Red crab up 12% vs. 2014 and falls under the King crab category the total King crab category is down -19%.
Snow Crab >
In October total U.S. imports of Opilio snow crab were 3.681mm lbs. vs. 3.406mm lbs. in 2014. Total imports through October are 105.7 mm lbs. vs. 93.914mm lbs. in 2014 up +3.8%
The lower prices in 2015 vs. 2014 did help sales. Overall Snow crab at present is short, demand is decent, and prices are up. Larger sizes are in very tight supply with some customers switching to smaller sizes and a better price point.
Canadian Opilio represents 86% of total Snow crab imports. However, the significant growth of the open area Barents Sea area Opilio Snow crab fishery is projected to mitigate the lower Opilio Snow crab quota for Alaska in 2016. Product from this area accounted for 17% of U.S. imports in October.
The new Alaska Bairdi Snow crab season is underway, but orders for Japan have only led to a trickle of product coming to the U.S. market to date. Initial prices are much higher than 2015 levels for comparable product.
Russian Deep-water Japonicus and Angulatus Snow crab inventories in the US are lower than last year at this time. Demand is steady for this item.
Santolla Southern Red crab >
Argentine Southern Red crab that is reported under the King crab category is up year to date 12% at 4.617 mm lbs. This item represents 23% of the King crab category. New season for Santolla is underway with deliveries expected around the end of the year.
Dungeness crab >
Fishing remains closed in California, Oregon, and most of Washington due to the demoic acid. Recent samples taken in Monterey and Northern California are still showing extremely high levels.
There are areas in Washington Puget Sound in which the crab quality is good and being harvested by Tribal fisheries.
U.S. retail support for crab was steady in October. 64% of the ads were on Snow crab.
Many retailers have booked their needs for the holidays and chose Alaskan King crab over Russian crab. With a limited supply, there is price pressure on what few parcels remain at this time.