Cod: Atlantic prices drop further, Pacific set to follow?

News 11:09 13/09/2014
(IntraFish) Prices for headed and gutted (H&G) Atlantic cod are trading at between $3,150 (€2,375) to $3,250 (€2,450) per metric ton, down from around $3,400 (€2,563) to $3,500 (€2,639) in mid-January, sources told IntraFish.

“Prices for cod and haddock products ex-China have reduced because the H&G price dropped," a UK-based buyer told IntraFish.

“I get the feeling that the Chinese do not have full order books at present and may possibly discount on prices to get orders. The only concern is if the Chinese discount further, how can they do this, and could start cutting corners from the agreed specification.”

The prices for H&G are down since January by the same level as fillet prices, by between 10 percent to 15 percent, said a top executive from a Norwegian fishing company. “Haddock has had the same price development as cod.”

From 2007 to 2012 the total Barents Sea cod quota increased by close to 70 percent and the haddock quota by more than 110 percent, which has, of course, had an impact on the market, he told IntraFish.

Fishing for cod and haddock has been good this year for all nations fishing in the Barents Sea, resulting in big landings over a short period of time. “This has influenced the market both for fillets and H&G.”

The exchange rate between the Norwegian krone and the British pound is accentuating the price drop for fishermen.

“As regards prices for cod fillets, the main market is still the United Kingdom, and the prices for fillets have gone down by 10 percent to 12 percent in pounds since early January until now. In addition to this we have a strong Norwegian kroner and a weak pound, so this adds another 3 percent.”

So the price for cod fillets back to Norwegian fishermen in NOK is down between 12 and 15 percent in only two months.

Pacific to follow Atlantic?

Meanwhile, the Pacific cod price situation has stabilized for now, but a bevy of market factors make the future uncertain.

For Alaska-caught pacific cod, prices increased by 5 percent to 10 percent over the course of last year and have stabilized at that level, Rob Rierson, president and CEO of Canadian seafood supplier Tradex Foods, told IntraFish.

Russia-caught pacific cod has also stabilized but is at a slightly lower level than last year, independent cod trader Daniel told IntraFish.

H&G pacific cod from Alaska is selling for $3,600 (€2,714) - $3,700 (€2,790) per metric ton, an unseasonably high level. It is currently $450 (€339.3) per metric ton higher than Atlantic cod, which is typically more expensive, he said.

But with inventories high, those high prices aren't likely to last, Rierson said.

Processors have been trying to keep H&G prices from coming down by trying to limit supply, either by producing more fillets, and thereby reducing H&G inventories, or through other means.

“Some plants are telling fishermen not to fish because it will push down prices,” Rierson said in Tradex’s weekly market insight video. However, “if fishermen are hungry, they’ll head out anyway," he said.

Paul Gilliland, senior vice president for Clipper Seafoods, told IntraFish the high inventories may be more of a perception than a reality, but he too said processors are trying to decrease inventories from what they were last year. The effort is “not an unusual thing at all when there is an increase in supply.”

Lower prices on similar species are also putting downward pressure on pacific cod prices, such as Alaska pollock.

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