Cod H&G prices steady; for how long?

News 09:08 13/09/2014
(IntraFish) After a drop earlier in the year from the highs of 2011, Atlantic cod prices have trended up slightly and settled at between $3,350 (€2,706) and $3,500 (€2,827) per metric ton, sources told IntraFish.

Barents Sea cod stocks have improved significantly over the past few years and are the largest in decades. The 2012 quota is up 8 percent over 2011, to 750,000 metric tons.

At the same time, the haddock quota has increased by 5 percent, to 318,000 metric tons.

Because of this great supply story and weak markets, especially the troubled European Union, industry sources are skeptical about future price development.

“It is difficult to say what will happen for the next months,” said the managing director of a Norway-based trader, talking about future price development up or down.

“It depends all on how the market for the ready products in Europe and the United States acts, and especially as the market in Europe is slow now,” he told IntraFish.

“I am very uncertain, I must admit,” said an executive with a large cod trader.

“There is very little H&G in the market, so normally prices would have started to increase now,” he told IntraFish. “They are not, so this could be a sign that the market are not working properly.”

Prices will stay at around $3,350 (€2,706) to $3,400 (€2,746) CIP China, “even with the shortage of supply for the next couple of months,” he said. “The euro has weakened 7 percent against the US dollar, so I think this could also have some impact.”

The executive pointed to the situation in Spain and Portugal, both large cod buyers. Not only does the dollar and euro exchange rate make business tough, the banking system is freezing up in these troubled Eurozone members, limiting options for companies.

“Portugal and Spain might have an even bigger problem as their banking systems are not working, and there is a lack of funds,” he said. “There certainly seems to be very few good news stories coming from that direction.”

The sales director of a large Norwegian company also warned on the markets in southern Europe.

However, it seems Portugal, the largest market for Norwegian cod, seems to keep buying, he said.

“I am amazed the prices are at this level,” said this sales director. “I don’t see that they can move up a lot, the processors simply can’t get the higher prices from retailers.”

The predicted increased supply of farmed salmon onto the market later in the year could also have an impact on general cod prices, he told IntraFish.

“If salmon is very cheap -- which it looks likely to be in September – that could impact demand for cod. Retailers will promote on salmon.”

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