SeaFood Business

MAY 2013

SeaFood Business is the global trusted authority for seafood buyers and sellers. We are the seafood industry's leading trade magazine with more than 30 years of experience. Our coverage is based on the "business" of buying and selling seafood.

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Market Report A slippery slope for sea bass, sea bream Mediterranean overproduction points toward new crisis C oncerns are mounting that the Mediterranean sea bass (Dicentrarchus labrax) and sea bream (Sparus aurata) farming industries could implode with very cheap fsh being put on the market. A number of northern European wholesalers have confrmed that at the end of 2012 and the start of this year there have been unusually large volumes of both species, but mainly bass. As a result, supply and demand has been thrown of balance and prices have dropped below production costs. sea bass, bream Sources say fsh are being sold for less than €3 ($3.85) per kilogram (kg) despite production costs being between €4 ($5.14) and €4.50 ($5.78) per kg. Initially, there were large volumes being exported out of Greece due to worries over a Norovirus outbreak. In order to clean the farms, a lot of fsh was put onto the market ahead of traditional harvests. But the situation has been exacerbated by the dire economic circumstances prevalent in many Mediterranean fsh-farming countries — fsh continue to be harvested early to provide producers with much-needed cash fow. According to one London-based trader, there will be much more smaller bass on the European market this year and there have been complaints of fsh weighing just 200 to 250 grams arriving in the U.K. market. Te frustration for the industry is that Mediterranean producers have been through these "boom and bust" cycles numerous times before. Te last big crash was in 2007; since then the sector has tried to put fewer juveniles in the water. Current overproduction means they are back chasing short-term gains. Tis time around, the situation has been made more complicated because most independent farms don't have access to credit like they did fve years ago. In order to bring money in, they are selling fsh at "stupidly cheap" prices, which "sets a precedent" and causes a downward spiral, said the trader. Te only people who are likely to beneft from this are the retailers, he adds. — Jason Holland Salmon report (Continued from page 14) to almost double, from 67 million fsh last year to almost 118 million this year. Te CEO expects Alaska salmon prices to stay at least as high as they were last year or go higher, and says that could be a problem. "I don't know how retailers are going to accept that," he says. "Tey're all going to run their promos at the beginning, but how long will that last? Will Europe buy sockeye at a price considerably higher than last year? I don't know what that answer is. … I know prices are going to be very steep and that's going to have to impact sales somewhat." — SFB Staff Crab report Double-digit scallop prices the new normal Buyers adjust to impacts of 30 percent quota cut C uts in the number of fshing days and the amount of scallops a boat can catch in a day ensure prices will stay in double digits for most of the season, which is now under way. One buyer for a chain of seafood restaurants says he purchased 18,000 pounds at $12 a pound in early April, and isn't spending much time worrying about how much he spent. He just didn't want to be shut out. "I remember when they were in the low$9s, the mid-$8s, for years and years, so $12 is crazy," the buyer says. "But when you get a 30 percent quota 16 SeaFood Business scallops reduction that's what happens to the prices, they go up 30 percent. I just didn't want to mess with it this year." Actually, the buyer did OK, considering prices in early April for shucked 10-20s were between $12.50 and $13 in both New York and New England, with U-10s in the $14.25$14.50 range. With a 10-month supply in hand, the buyer is huddling with his team to determine just how much of the May 2013 price increase to pass on to customers. "Tat's a discussion we're going to have. It depends, we've had so many price hikes, we don't want to get too expensive, you'll lose customers," he says. A New England seafood executive says the amount of time when scallop prices dip has shrunk over the last fve years, from three months to only about a week last year; he thinks he'll get even less time this year. "I just told all my accounts when I see the price break and they have the tonnage I'm going to tell you to buy, so get your purchase-order books ready," the CEO says. "Te only way they believe me is over the years it has proved out. I've said now is the time, this is the time, this is the number, go, and it proves out by the end of the year when they're seeing prices $1, $1.50 higher than they were when they bought and they know they did the right thing, we can trust this guy." Instead of a week this year, the CEO expects prices, if they dip at all, will drop for maybe a day. "I've said to my customers, 'Why don't you give me a scenario that if it's at $10 you're going to buy X, if it's $10.50 you're going to buy Y and if it's $11 you're going to by Z. Ten I know what to do when the moment strikes.'" — SFB Staff (Continued from page 14) caught in its exclusive economic zone to be landed in Russia prior to export. Previously, Russian vessels would catch crab in the Russian Far East without regard to regulation and deliver to Hokkaido. Before the law, in 2007, about 80,000 MT of Russian crab was recorded as imported to other countries, mainly Japan, while none was ofcially exported. Since then, ofcial exports have risen to about 20,000 MT, while importing country data show double that amount, meaning about half of the imports are still illegal, unreported and unregulated product. — Chris Loew Visit us online at www.seafoodbusiness.com

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