By: John Sackton, SeafoodNews.com
Any attempt to have orderly snow crab sales to Japan from Newfoundland this year has collapsed, in the face of soaring US prices.
This week, Urner Barry is reporting Newfoundland 5-8 sections at $6.10 which is the highest price ever recorded for snow crab in June.
The closest year was 2011, when prices were $5.85 and did not retreat. Between 2012 and 2015, prices fluctuated between $4.75 and $5.10.
At the beginning of this year, most buyers expected some strengthening. Some initial Japanese contracts were priced at $5.35 in April, but the attempt to maintain a single market price for Japan has long since collapsed.
Some sales to Japan were reported at $5.55; then at $5.75, and even some recently near $6.00.
According to industry sources, one result is a pullback in Japanese buying. They say that currently only about 25% of Newfoundland production is being packed for Japan, a significant cutback from the usual 30% to 40%.
Part of the problem is weaker Japanese demand for raw frozen sections, which was an important part of the market last year. But also, some Japanese traders simply can’t afford these prices, and there is wide variation from company to company as to their needs and abilities.
The turmoil has also extended to the US market, where many contracts are either being cancelled or simply not filled, unless buyers keep up with the price increases.
Landings have passed the halfway mark, and despite the earlier start to this season, total volume is still is apparently behind 2015, which is logical given the quota reduction in Newfoundland to just over 42,000 tons.
The latest market reports are that some of the panic by US buyers may have calmed down.
Re-printed with permission of SeafoodNews.