SeaFood Business

DEC 2012

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 With prices down, is it saturation point? China's growing appetite for salmon buoys industry's spirits I t's been a tough year for Atlantic salmon producers but a bet- ter one for retailers and processors as a result of the steep downward trajectory that salmon prices have followed over the past two years. In Norway, spot pric- es at the start of 2011 were at around 40 kro- ner (€5.47/$6.97) per kilogram, but by year's end they slumped to 25 kroner (€3.42/$4.35). Te average price for 2011 was 31.99 kroner (€4.37/$5.57) per kg, salmon down from 37.26 kro- ner kg in 2010. Tis year is more of the same. Te average spot price through Oc- tober was 26.30 kroner (€3.59/$4.58) per kg. Probably the biggest contributor to the de- cline in prices is the re- turn of Chile as a force after three years in the Hiroshima oyster crop strong Disease concerns crop up worldwide J apan's oyster mar- ket is divergent. oysters Te Miyagi oyster grown in the North- east has a late harvest and high prices, while Hiroshima oysters are plentiful and cheap. On Oct. 15, prices averaged 3,603 yen ($45.4, €35.9) per kilogram. Oyster farms in Minamis- anriku, also in Miyagi Prefecture, which were severely damaged by the 2011 tsunami, began harvesting oysters on Oct. 22 for the first time since the disaster. Shipping operations began at a newly built temporary market. Te shipments represent the gradual rebuild- ing of the industry. Prior to the disaster, Miyagi Prefecture was the nation's No. 2 supplier fol- lowing Hiroshima, but the 2011 harvest in the prefecture was only 10 percent of the pre-disaster level, at 318 metric tons (MT). Following last year's mad scramble to secure seed, this year's production is expected to rise to 930 MT, or 30 percent of the 2010 harvest. Miyagi is a preferred location for seed oyster production because its cold winters slow growth, allowing seed oysters to "harden" on racks to retain (Continued on page 14) 12 SeaFood Business December 2012 (€5.09/$6.49) per wilderness while it dealt with the 2007 infec- tious salmon anemia outbreak. In 2011, the world's No. 2 produc- ing nation ramped up its harvest to 220,000 metric tons (MT) and this year it's expected to harvest 344,000 MT. Conservative esti- mates put this year's total production at 1.8 million MT, up from 1.6 million MT in 2011. Industry execu- tives say a figure in ex- cess of 1.9 million MT is not inconceivable. Flush for the future Atlantic salmon production, in metric tons 2 mil. 1 mil. 1.5 0.5 0 Source: Rabobank International Barring seen any unfore- circumstances, global production can be expected to near or surpass 2 million MT in 2013, which would represent a 37 percent increase in global sup- ply over a period of just 36 months. Buyers have said the low farm gate prices have made it possible for current markets to ab- sorb additional supplies and European retail- ers and processors have (Continued on page 14) Buyers unconcerned with crab quota cut Market being 'dragged down' by excessive supply A 25 percent cut in the 2012-13 Alas- ka snow crab quota isn't striking much panic into buyers' hearts as the crab season gets under way. Alaska officials cut the Bering Sea snow crab quota to 66.35 mil- lion pounds, down from 88.89 million pounds last year. Te Bristol Bay red king crab quota is up slightly, to 7.85 million pounds from 7.83 million pounds. "I don't think that's got anyone particularly concerned because we have overstocked crab situations here in the United States," says the CEO of one seafood distributor. "Te Rus- sian stocks that have been in the country, even though there's not much more that's going crab to come before the end of this year, has been enough to slowly drag the market down." Te latest price re- ports had 5- to 8-ounce snow crabs f.o.b. West Coast at $5.25 to $5.40 a pound, while red king crab prices ranged from $10.25 to $10.50 a pound for 20-24s to as much as $25 for 6-9s. "Te smaller sizes of the king crab are los- ing a little bit of their strength, they're down about $2 a pound now, from $14-17 a pound to around $12-some- thing," says the buyer for a chain of restau- rants. "I think they're trying to go back into retail. Tey're getting some movement there, but they're getting it at a lower price point. Te 6-9s, there's no drop at all." Even at these some- what lower prices, the CEO says crab remains a luxury item for many, noting four years ago 16-20 red king crab was priced at about $8, went up to $16 last year and now is around $12. "So $12 sounds a heck of a lot better than $16, but it's not near where it's going to be. Remember, that has $12 worth of shell on it and you have to put a fair amount of it on the plate to make someone happy, so what's your menu cost going to be? Pretty high," the CEO says. — SFB Staff Visit us online at www.seafoodbusiness.com 2013 Estimate 2012 Forecast 2011 2010 Norway Chile U.K. Canada Other Total

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