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Pacific cod may get small boost from smaller sizes
August 16, 2013, 09:40 AM
One thing is for sure, Pacific cod producers say – the market can’t get much worse.

 “’Hideous’ is the term I would use,” Lance Magnuson, managing director at Blue North Trading Co., the sales and marketing arm of cod harvester Blue North Fisheries, told IntraFish.

The price range for Pacific cod on sizes is significant, but suppliers and buyers put longline frozen-at-sea H&G j-cut fish at around $2,600 - $2,800 per metric ton currently (with the caveat that prices vary significantly by size). Compare that with a rough average for the same product last year: $3,100-$3,200 per metric ton.

Pacific cod has taken an obvious hit from the abundant supply of Atlantic cod, but producers say prices have moved up slightly from a few months ago.

 “Prices have been going up in response to less supply, and demand has gone up because prices are so damn low,” Magnuson said.

Higher demand has been in part the result of the larger sizes of Atlantic cod, Magnusonand others said. Unlike Portuguese buyers, who have a strong affinity for thelarger-sized cod currently coming out of the Barents Sea, Chinese and Western processors are not particularly happy dealing with them.

 “You can’t take a 3 kg fish and get a proper 4 oz. portion,” Magnuson said, pointing to the needs in, for example, the natural fish market in other parts of Europe. “[Atlantic cod suppliers] are forcing something on a market that doesn’t wantit.”

Pacific cod harvests – currently right on target for this season – have a much better size mix. Some 56 percent of the harvest from Blue North’s vessel Blue Pacific is under 2.5 kilograms, Magnuson noted. Thirteen percent is under 1 kg.

Paul Gilliland, senior vice president with cod harvester Clipper Seafoods, agrees: processors prefer a smaller size.

And while they havelearned to handle larger fish, the end-product cansuffer.

“There’s a lot of product that just doesn’t look good,” he told IntraFish. “The fish and chip markets have to hit a certain size. They have to hit that net weight.”

Further helping the market situation for Pacific cod, Gilliland said , is that the oversupply argumenton cod is beginning to fade somewhat.

“It’s becoming more apparent that Russia and Noway are not going to hit 1 million tons [of harvest],” he said. Like Magnuson, Gilliland is cautiously optimistic. “I think we’ve reached the bottom, and they’ve firmed up a bit,” Gilliland said.

The sluggish demand in Europe has several reasons, one European importer told IntraFish, with the most obvious being the higher supply and subsequent drop in prices for Atlantic cod. Atlantic cod also has the edgeof being better known in the cod-hungry Southern European markets, particularly among salted fish buyers.

Meanwhile, Japan, a traditionally large buyer of Pacific cod, is being more cautious this year and seafood companies remain “not engaged” in discussions.

“This isn’t the time to sell fish in Japan,” Magnuson said.

The outlook for the remainder of the year is fuzzy at best, but long-term Pacific cod is bankable.

Combined quotas from Russia and the United States have been on an upward climb since 2009, signaling that the resource is sound. The US Pacific cod quota fell only slightly this year -- 0.4 percent -- to 260,000 metric tons.

Three new Pacific cod harvesters have been under construction, with Alaskan Leader Fisheries’ Northern Leader being launched later this month. Blue North’s new vessel is due for completion in 2014.

Despite that long-term outlook, however, in the near-term, the market in general remains spotty. “There’s no umbrella for this storm,” Magnuson said. “We have to live with what’s going on in the market.”

Source: (IntraFish)
Kim Thu
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