By: Les Hodges
The King Crab market in the U.S. has clearly taken a duel pricing system this fall with Alaska Red and Gold King crab being priced and selling significantly above Russian crab due to high cost, limited supply, and strong retail demand for the holidays.
The 2015 Bering Sea IFQ quota Red King crab fishery is about finished as of 11/4/15 with 8.141 mm lbs. caught with 835k lbs. remaining on the quota. Early fishing was primarily for the Japan market with limited shipments to the U.S. market. The U.S. market is just now starting to receive product.
The Russian crab quotas for 2016 have been released and are up vs. 2015. The largest increases were in Angulatus Snow crab +84%, Bairdi snow crab +48% followed by Brown King crab +31% and Red King crab at +10%. It’s clear that the high margins realized by processors in the Far East to fish live King crab and Opilio Snow crab in 2015 for the Asia markets has hurt U.S. supply.
This month’s 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 >
Norway Crab Fishing:
The Norway King crab season began on September 5 with a quota of 1,300 m/t. The expected catch including the free catch areas would be about 2,000 m/t. In September, Norway producers shipped 191 m/t of Frozen King crab and 194 m/t of frozen Opilio.
Japan was the primary market for Norway on King crab in September receiving 146 m/t with U.S. importing 81 m/t of Snow crab. Year to date Snow crab exports from Norway are up 118% and King crab up 197%. Live sales are similar to 2014 at 447 m/t mainly to Korea. Sales of live King crab have recently slowed dramatically due to the increase in Russian deliveries to Korea with much lower prices.
Russian Crab Fishing:
The 2016 Russian crab TAC has been released as follows:
There are 44 vessels fishing in the Russian Far East as of November 1,2015.
10 processors are fishing Red King crab of which 5 are fishing cooked processed, 2 on fresh frozen processed, and 3 fishing live king crab. The effort on brown King crab increased with 4 vessels processing cooked crab. Blue King crab now has 6 vessels working with 1 fishing live and 5 processing cooked product.
Opilio Snow crab fishing effort increased and we find that the Asia live market is controlling this resource. 9 vessels are fishing live, 1 fresh frozen, and only 2 cooked. 7 vessels were processing Deep Water snow crab of which all are processing cooked product.
Some offers of processed Blue and Red King crab are being received for the U.S. market with Blue crab size mix being about 50% medium and smaller.
In the Barents Sea fishery, there are 35 vessels in some stage of fishing and processing with most on Opilio. Of this 11 are Russian flag vessels fishing in the Russian Zone for Red King crab and Opilio and 24 processors fishing Opilio in the international waters. It is estimated that the 2015 harvest from this area will be between 15,000 to 20,000 m/t.
U.S. (Alaska) Crab Fishing:
The Bering Sea Red King crab fishery is about finished with 94% of the IFQ quota being taken as of 11/4/15. 8,448,294 lbs. have been harvested with 528,306 lbs. remaining. Quality is good and size is large.
The Alaska Aleutian Islands Golden King crab fishery is also underway with product hitting Seattle now. Sizes run from 12-14 count to 20-24 count. Quality is again excellent.
The Alaska St. Matthews Blue King crab fishery quota was announced and there is a major reduction of 38% from 665,000 lbs. in 2014 to 411,000 lbs. in 2015. 3 landings have been reported but no catch results as of this date.
The Alaska Opilio quota for 2015/6 was reduced 40% from last year’s 67mm lb to 40.6 mm lbs. and fishermen are expecting higher prices. The market sold through well at last year numbers, but marketers could struggle if market increases materially. One should also remember the increasing deliveries from the open area in the Barents Sea that will offset the lower quotas in Alaska.
Bairdi Snow crab on the other hand was increased from 15.1mm lbs. to 19.66 mm lbs. Fishing should begin after completion of the Bering Sea Red king crab fishery.
REGIONAL MARKET UPDATES >
The China market slowed in early September and prices of live King crab turned down. However, by October, prices rebounded somewhat and sales increased. The mass China population avoids the purchase of most premium seafood including crab. At the same time, all the producers’ need is the top 1% of the population.
Japan imports in 2015 of all crab including meat continues to slide vs. 2014 being down -27% through September at 31,691m/t vs. 40,470m/t in 2014.
Snow crab is off only -4% compared to King crab at -51% year to date through September. Processed Opilio imports in September were up 10% vs. prior year at 2,465-m/t and 18,271/t (40.380 mm lbs.) year to date vs. 18,271m/t (40.280 mm lbs.) in 2014. Largest suppliers were Russian followed by Canadian and U.S. Prices were up 13%. Live Snow crab is down -82% for the month and year to date.
Processed King crab imports by Japan were 184 M/t in September vs. 207 m/t in 2014. Total imports year to date through September are 1431 m/t (3.154mm lbs.) vs. 2,907 m/t (6.409 mm lbs.) in 2014. Imports are down 51% vs. 2014 year to date.
Live King crab imports from Russia surged in September with legal landings to 186 m/t (410k), This category also remains down -73% vs. 2014 YTD.
Alaska Bering Sea Red king crab contracts were settled in the $15.00/lb. range delivered main Japan Port and Japan traders are very concerned about the high prices and the market ability to accept volume sales. Inventory is low in Japan so buyers who must have Red king crab for the holidays have few choices.
Korea imported 163 m/t of live Snow crab and 163 m/t of live King crab in September. Year to date through August Korea has imported 4,537 m/t (10.002mm lbs.) of live snow crab and 2,512 m/t (5.538mm lbs.) of live King crab. This is indeed the hub of the live crab business. Live King crab prices dropped below $20.00/kg this past month before rebounding to an average of $23.61/kg in September live Snow crab price average was $13.98/kg.
Total imports of crab to Korea are 15,343 m/t (33.825 mm lbs.) through August. Korea remains the hub for live crab sales in Asia.
Alaska Red and Brown King crab opened at significantly higher levels than existing Russian product as marketers had to pay Japan prices to obtain bulk product. This fact created a duel pricing level for King crab. Quantities are limited on Alaskan King crab and this product should all be gone by the holidays.
Russian Red King crab prices moved up 2-3% overall according to Urner Barry with the exception of 6-9 count. Russian Brown King crab price increases were small vs. prior month on most sizes according to Urner Barry reports.
U.S. imports of Russian King crab in September were down -41.4% at 1.466mm lbs. vs. 2.501mm lbs. in 2014. Year to date imports of Russian King crab are -16.6% at 14.929mm lbs. vs. 17.898 lbs. in 2014. This is a direct result of Russian processors fishing live King crab vs. processed in the Far East fishery.
Including the smaller Argentine Santolla Southern Red crab which us up 17.9% vs. 2014 – and falls under the King crab category – the total King crab import is down -10.0%.
Alaska Gold King crab has arrived in Seattle and not surprisingly like Bering Sea Red King crab is priced significantly above Russian product. The cost of goods is much higher, supplies limited, and there is a specific market demand. Supplies are limited.
U.S. – Retail:
Seafood ads were consistent with prior months with shrimp and salmon being bargain items and heavily supported by retailers. U.S. retail support for crab was steady in October with an average among major retailers of 32 per week. 76% of the ads were on Snow crab.
Many retailers are booking their needs for the holidays on Alaskan King crab resulting in supply and price pressure.
U.S. – Snow Crab:
In September total U.S. imports of Opilio Snow crab were down -6% at 3.202mm lbs. vs. 3.406mm lbs. in 2014. Total imports through September are 97.914 mm lbs. vs. 93.914mm lbs. in 2014 up +3.8%
The market has tightened up considerably over the last month with 5-8oz being quoted the $5.00- $5.20 range Boston. Larger sizes are in tight supply with pricing on Canadian 10 ups now $6.40-$6.50.
Canadian Opilio represents 86% of total Snow crab imports. However, the significant growth of the open area Barents Sea area Opilio Snow crab fishery is projected to mitigate somewhat the lower Opilio Snow crab quota for Alaska in 2015/2016.
Alaska Bairdi Snow crab is long sold, but there is limited amount of good quality of under12oz Russian Bairdi snow crab inventory can be found in the same price range as 10up and 12 up Opilio. This is a great buy in the 6.25 – $6.50 range.
Russian Deep-water Japonicus and Angulatus Snow crab inventories in the US are lower than last year at this time and sellers trying for higher prices. New suppliers of this item are emerging from the Far East. Still, as deep-water snow crab prices get closer to Opilio, the value is reduced.
U.S. – Santolla Southern Red crab:
Argentine Southern Red crab that is reported under the King crab category is up year to date 17.9% at 4.617 mm lbs. This item represents 23% of the King crab category. New season for Santolla is underway with deliveries around the end of the year.
U.S. – Dungeness crab:
The California recreational season starts on November 7 and the Commercial season on November 15. However, the recent tests have not shown much of a decrease in Domoic acid and State officials continue to test in eight California ports. A delay in opening is possible and any delay in the commercial season will cause serious problems for the lucrative Thanksgiving market.
There is a limited amount of Sections and Whole Cooks in inventory from earlier openings that are excellent in size and quality. Sections are quoted in the $9.00-$9.25 range with 2up Whole cooks in the $7.40-$7.50 range.