By: Les Hodges, 7/7/15
Summary: While the Russian crab quota is up slightly for 2015, the effect of the Chinese and Korean growing live market demand has caused shortages in the processed market. From Norway to the Russian Far-East, processors are working to tap this lucrative market. The Chinese demand for Dungeness crab and Canadian Lobster changed the dynamics and is now changing how Russian King and Snow crab is sold.
However, there will be King Crab!
Assuming the Russian producers are able to ship 5,000 m/t live King and Snow crab to Korea and China in a 4-month period this Fall, there will still remain enough crab quota to make 9 million lbs. of processed King crab for producers to sell in either the U.S. or Asia. In addition, we have the Alaska Bering Sea Red crab and Brown King crab fisheries to help fill the gaps.
We project on the basis of the estimated size of King crab remaining to be caught that buyers need to be flexible and upsize due to projected shortfall on smaller size crab vs. demand. We anticipate that most Russian Far East Opilio will sell in Asia
Market level information is below for the Chinese, Japanese, Korean, Russian & U.S. markets.
Chinese Market: The Chinese government continues to work to control the illegal smuggling of seafood (including King crab) through Haiphong, Vietnam. There are stocks of King crab in China as Russian owners ship with Russian documents through Weihai or other ports in China. From Weihai, the live crabs are shipped/marketed to all parts of China including the South and Hong Kong. They use trucks with water tanks to deliver the live crab. Other Russian processors look for any open door through which to sell and deliver their crab. One Russian source stated that the objective by the Russian vessel/cargo owners is to ship directly into China now rather than send to Busan or Japan.
Japanese Market: The Japan crab market continues to be weak on King Crab. The ¥ is 123¥/USD which makes importing and competing with China, Korea, and the U.S. difficult. Sources indicate that there are few cooked King Crab sections in Japanese warehouses at present although there is some fresh frozen blue King Crab. Prices are high and sales slow.Processed King Crab is off -24% compared to May 2014 and -60% YTD.
Imports for May on live King and Snow crab shows the impact of the Russian/Japan IUU agreement. Live King Crab is off -67% for May and -86% for year to date through May. Live Snow Crab is similar being off -80% for May and -77% YTD. Snow Crab imports are much better being off -7% for May and -4% YTD. Japan has purchased snow crab from 8 different countries of origin to accomplish this level of imports.
Korean Market: Korean Customs data for May presents 761 m/t of live Snow crab and 300 m/t of live King crab. Year to date Customs information through May shows live Snow crab as the largest import with 3,224 m/t. King crab imports are 1,567 m/t through May. Total imports of crab to Korea are 2,181 m/t in May and 10,366 m/t (22.786mm lbs.) year to date. Of this Russian King and Snow crab represented 56% or 5,794 m/t (12.773mm lbs.)
Much of the King crab and Snow crab has been trans-shipped for the Chinese market although there is a solid and growing Korean market. Consumption of live King and Snow crab in Korea has recently softened due to price and a MERS virus fear. Crab marketing in Korea continues to evolve. One company has even started Internet shopping mall to sell crab in Korea.
Russian Crab Fishing:
There are 41 vessels fishing in the Russian Far East as of June 23 with the majority fishing Opilio for the Asia market. This is a reduction from the 53 vessels reported last month. The King crab effort has also been reduced from last month. 6 vessels are fishing vs. 14 last month of which 5 are fishing blue king crab.
Current Russian catch information shows that basically all of the Red King crab quota of 17,794 m/t still to be fished along with remaining Blue and Brown King crab quotas. If the live market demand continues, Russian producers will ship live first and then processed.
There are 14 vessels fishing Opilio evenly split between cooked and fresh frozen with none fishing live. The effort on the large Opilio from Northern Okhotsk has been heavy with over 70% of the quota for that area being taken year to date and most sales to Asia. Other areas remain to be fished.
Nine vessels continue to pound away on deep water Angulatus.
In the Barents Sea Opilio fishery, it is reported that everyone is experiencing down time with catch and production down. This occurred also in 2014, but in mid-July rather than mid-June.
With higher prices paid by U.S. importers on processed product, King Crab imports excluding Argentine red crab were 2.309mm lbs. in May which is 6% more than May 2014. However, King crab imports excluding Argentine red crab year to date are -35% lower at 6,924mm lbs. vs. 10,716mm lbs. in 2014.
Snow crab imports for May were 15.176mm lbs. compared to 24.015mm lbs. in 2014.This is a decline of -36.8%. Total year to date are 23.161mm lbs., a -26.5% decline vs. 2014. Canadian Snow crab dominate U.S. imports and were down -39.3% for May and -38.6 for YTD.
U.S. retail support for crab was solid for June with an average among major retailer of 31 per week. Of this we find 63% featuring snow crab with a price range of $5.99-$8.99. King Crab averaged 11 features with a price range of $13.99-$19.99.
King Crab: Prices on King crab for the US market continue to increase over the last month being driven up by the limited supply on smaller size product. Good inventories remain on larger Red King crab and this becomes a better comparative buy each day.
Mid size and smaller Russian Red/Blue King and Brown King crab prices have increased each month in 2015. Year to date prices are up 12-16% on medium and small crab. Still, a comparison to July, 2014 Urner Barry reports shows that current King crab prices are in the same basic price range today as last year.
The biggest value in 2015 is 6-9 ct Red King Crab which is -7.5% lower than 2014. This a great buy as only $1.00/lb. higher than 9-12 ct.
Santolla Southern Red Crab: Argentine Red crab continues its quiet growth with quality and trade acceptance continuing to improve. U.S. Imports for May were 1.247mm lbs. compared to 343.9k in May of 2014 – a 262.5% increase! Year to date through May is 3.542mm lbs. vs. 2.986 mm lbs. in 2014 representing a 18.6% increase.
Although incorrectly marketed as King Crab by some in the U.S., this product can stand on its own at price points below small King Crab.
Snow Crab: The Alaska Snow crab season is finished with 67.9mm lbs. landed. Alaska Snow crab is -12% cheaper in 2015 than July 2014 and a great value. Most larger size Alaskan product is sold and inventories on 5-8s are also becoming short and recommend that one plan ahead as new season will not start until the end of the year.
The Canadian Snow crab quota for 2015 is 96,414 m/t with 71,047m/t or 73.69% being caught as of 6/26/15. Prices are down -6% on 5-8 oz. vs. the same period 2014. Larger size 8 and 10ups are short in supply with good demand and firming prices.
Bairdi Snow Crab: 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 Russian Bairdi Snow crab available which is an excellent alternative. Some of the product has been reprocessed modeling after the Alaskan Bairdi snow crab @ 12oz Up and under 12oz Quota on Bairdi remains in the Far East.
Deep-water snow crab inventories in the US are lower than last year at this time. Fishing is primarily on Angulatus with a total of 9 vessels fishing in East Sakhalin. Unusual vs. prior years is that the Korean market has been better than the U.S. this spring as this inexpensive crab is used for Korean buffets.
Dungeness crab: The Canadian season is over and the relatively small Alaskan season is taking place as well as a local and native fishery in Puget Sound. Inventories of sections and whole cooks remain tight and prices firm for good quality product
Questions or comments about this report? Please call Les Hodges @ 206-284-1947.