By: Les Hodges
2015 was the year of the live crab market. For several years now we have seen a steady growth in Russian and Norwegian live King crab & Snow crab deliveries to Asia – especially to Korea and China. Russian deliveries of live King and Snow crab surged in 2015 with deliveries to Korea up 53% to 20.755 million pounds and a corresponding increase in deliveries to China.
U.S. prices on processed Russian Red King crab increased steadily over the year and by year-end were up 30-40% vs. year-end 2014 depending on size. Alaskan Bering Sea Red King crab prices were even higher after the creation of a two-tier market covering domestic and imported King crab in the U.S.
Snow crab inventories in the U.S. are low with the market firming by the end of the year as the cheaper prices found in 2015 on both Canadian and Alaskan enabled inventories to sell through.
BOSTON SEAFOOD EXPO: Keyport will be attending the Seafood Expo in Boston next month and our staff would love to sit down with you and discuss your crab and other seafood needs. Please contact us if you would like a meeting. We are in Meeting Room 251 at the Convention Center (appointment required). E-mail email@example.com for a meeting time.
This newsletter is divided into two sections: one, a section on “REGIONAL CRAB FISHING” which details the latest harvest data; and two, a section on regional “REGIONAL MARKET UPDATES” which discusses imports, marketing trends and more.
> REGIONAL CRAB FISHING >
Alaska Crab Fishing:
The Bering Sea Red King crab fishery for 2015 is finished with limited finished inventories remaining in the U.S. market.
The Alaska Aleutian Islands Golden King crab fishery continues at a slow pace. Quality is excellent, but size has been running smaller than anticipated.
The Alaska Bairdi Snow crab quota for 2015/6 was increased from 15.1mm lbs. to 19.66 mm lbs. Although most early and large product went to Japan, there is product in Seattle for the U.S. market. Quality is excellent but availability on large 12oz up size is less than last season. 12.079mm lbs. or 61% of quota has been taken as of 02/8/16.
The Alaska Opilio quota for 2015/6 is reduced -40% from last year’s 67mm lb. to 40.6 mm lbs. The product sold through well at last year lower prices, but marketers could struggle at the new higher 2016 offerings. 13.282mm lbs. have been taken to date or36% of the quota has been taken as of 2/8/16.
Norway Crab Fishing:
The Norway King crab season began on January 1st with the catch expected around 2,500 m/t. Price negotiations for Norwegian King crab are settled with minimum prices up by 9% for large, 16% for medium, and 22% for small Red King crab. About 25% of Norwegian Red King crab is shipped live with South Korea being the main market accounting for 73% of shipments amounting to 450 m/t.
Russia Crab Fishing:
There are 31 Russian vessels fishing crab in the Far East as of January 24 plus another 10 Russian flag vessels and 15-20 others are fishing in the Barents Sea for Opilio. 7 vessels are fishing Brown King crab, 8 on Blue King crab, 3 fishing for Bairdi Snow crab, 7 fishing Opilio, and 5 on deep water Red crab. In the Barents Sea fishery, there are 9 Russian flag vessels fishing in the Russian Zone and 15+ processors fishing Opilio in the international waters.
Russian producers stated that they intend to increase deliveries of live King and Snow crab in 2016 and they have started out strong. In January 43% of vessels fishing Blue King crab are delivering live and 86% of vessels on Opilio are delivering live crab.
Prices on replacement Russian King crab are currently higher than the U.S. market levels. This makes it very difficult for an importer to buy without speculation.
REGIONAL MARKET UPDATES >
As we enter Chinese New Year this week, the consumption of high value live seafood will peak. The Chinese consumers have established a preference for live Dungeness crab and have expanded their tastes to King crab and Snow crab. Prices on these items as well as lobster, clams, etc. exceed other world markets.
The ¥ has continued to strengthen in 2016 and now sits at 115.94¥/USD.
Total Japan crab imports for 2015 including meat declined-17% at 48,871m/t vs. 58,745m/t in 2014.
The lone bright spot was Snow crab as imports increased +5%. Snow crab totaled 25,454 m/t (56.116mm lbs.). Largest suppliers were Russian followed by Canadian and U.S. Deliveries from the vessels fishing in the Barents Sea area and Norwegian Opilio continue to be a factor. Snow crab price average for 2015 was up 8% to 1,587¥/kg ($13.45/kg).
Processed King crab imports by Japan declined by -27% in 2015. Total imports 5,043 m/t (11.118mm lbs.) vs. 6,912m/t (15.238 mm lbs.) in 2014. Prices increased 49% vs. 2014 average to 3,263¥/kg ($$27.65/kg).
The halt in IUU fishing and the Japan/Russia treaty sent imports of live King crab down -65% to 845 m/t and now crab down -86% to 852 m/t.
Compared to 2014, live and fresh Snow crab imports to Korea from Russia increased 53% to 5,478 m/t (12,076.80 lbs.) in 2015. Live/fresh King crab also increased 53% to 3,937 m/t (8,679.51mm lbs.).
The increase in King crab came at the expense of Norwegian exporters who were down -18 % to 450 m/t. Prices of Norwegian Red King crab averaged $34.20/kg vs. Russian live King crab at $23.43/kg
Total imports of crab to South Korea for 2015 were 22,183 m/t (48,905mm lbs.). This is almost one pound per person in a country with a population of 49,180,776. This is expected to continue in 2016.
When in Monterey, Ca. last week, I saw the above display of Alaska Red king crab at the Old Fisherman’s Grotto on the wharf. What a great way to present and drive customers into the restaurant.
Retail support for both King crab and Snow crab were excellent over the holidays. 45% of the ads on crab in December were featuring King crab!
Several major retailers chose Alaskan King crab to promote for the holidays over Russian product. With limited supply, there remains price pressure on what few parcels remain at this time. Alaskan Bering Sea Red King crab prices are $2.00-$2.50 higher than comparable Russian Red King crab as some major retailers and food service operators have decided to support Alaska crab due the management of the resource.
Overall prices of Russian finished Red and Gold King crab legs and claws in 2015 increased 30-40% compared to 2014 depending on size and some smaller sizes are simply not available.
> King Crab:
Alaska Red and Gold King crab pricing in 2015 was established at higher levels than Russian product. Limited supply, high product cost, and strong retail demand for U.S. product set the stage resulting in a duel pricing level for King crab. Quantities are very limited on Alaskan Red King crab and most inventories have been depleted. Same situation on Alaska Gold King crab as demand exceeds supply.
Russian producers continue to increase prices after realizing the difference between Russian and Alaska prices. There is limited supply on mid size and small Russian Red King crab. The best value remains to be large Red King crab
U.S. 2015 imports of Russian King crab ended down -9% with 20.778mm lbs. vs. 22.744 lbs. in 2014. Including the Argentine Santolla Southern Red crab the King crab category is off -5% year to date. Argentine crab imports for 2015 were 4.795mm lbs.
We believe that Russian King crab supply for the U.S. going forward will continue to be short in spite of a larger quota for 2016. This is a direct result of Far East Russian processors fishing live King crab vs. processing their catch.
> Snow Crab:
Total imports for the U.S. In 2015 were 105.835 mm lbs. vs. 100.287mm lbs. in 2014 up +5.5%.
The lower prices we found in 2015 helped move the 2015 season inventory and product is now short. Prices have moved up on Canadian Opilio .15-.30/lb. on 5/8’s and more on larger product. Some users have moved to higher priced Alaska Opilio and for larger size needs choosing Alaska Bairdi Snow crab.
Canadian Opilio represented 86% of total Snow crab imports in 2015. However, there is significant growth of imports from the Barents Sea area Opilio fishery. Demand from Japan for Opiilo from all areas should curtail U.S. imports, as prices are higher to Japan.
New season Alaska Bairdi is on the market with prices higher than 2015 levels for comparable product. Large size 12oz up is short available compared to last season.
Russian Deep-water Japonicus and Angulatus Snow crab inventories in the US are lower than last year at this time. The Koran buffet business is consuming more of this inexpensive product and has raised the basic price level.
Santolla Southern Red crab:
Argentine Southern Red crab that is reported under the King crab category is up year to date 12% at 4.8 mm lbs. This item represents 19% of the King crab category. Deliveries of new season Santolla is taking place.
Oregon and Washington Dungeness opened on January 1. Initial grounds price was set at $2.90/lb. but soon was raised to $3.25/lb. Live buyers mainly for China have been very active buying for Chinese New Year. Retailers are selling fresh “whole cooks” in the $5.99/$6.99 range with good movement.
California is still showing unsafe levels of demoic acid and the commercial fishery remains closed. It now looks like mid to late February are the earliest that it may open. The U.S. Small business Administration has offered help to in the way of low interest federal disaster loans to California small business commercial fishermen. Last year California fishermen caught 16.8 mm lbs. of Dungeness worth $58.3 million dollars. To date in 2016, California buyers are filling in with Dungeness from Canada, Washington, and Oregon.