Keyport Crab & Seafood Market Update
By: Les Hodges
Russian Crab quotas increased for 2017 vs. 2016 by 10% and we continue to monitor fresh and live shipments from the fisheries and the impacts to the domestic market.
The U.S. market for the first six months on King crab followed the traditional decline in prices through June with most items being down 4-7%. Gold King crab was down more as some products, such as 16/20 count, were at all time highs in December and the value was reduced.
Snow crab has been a disappointment for the first half of 2017 with high prices on a reduced quota Alaska Opilio, a closed season on Alaska Bairdi, a limited Russian Far East supply, and the surprisingly limited import on Canadian Snow crab and high prices. Dungeness crab has been a much better value.
This newsletter is divided to two sections: Crab Fishing and Crab Markets.
CRAB FISHING >>
Alaska Crab Fishing:
Dungeness season in South Eastern opened on June 15. Size is reported to be large and quality good. However, after review of the first week’s catch of 605k lbs. ADFG determined to close 3 weeks earlier than usual on July 25. The current estimate of the combined summer and fall harvest is 1.68mm lbs.
Canada Crab Fishing:
The Canadian Snow crab fishery and market has not gone as many predicted. After starting in the low $7.00 range the price has surpassed the 2016 season at this time period by $1.00/lb.
Norway Crab Fishing:
Norway has set the country’s first Snow crab quota at 4,000 m/t. However, with more vessels fishing in 2017 the catches are down 37% through the end of May. King crab landings are also down at 364 m/t vs. 788 m/t by the same time in 2016. The push by processors is to sell live King crab. Through May they have delivered 328 m/t to Korea.
Russian Crab Fishing:
The June 27 crab fishery report shows 59 vessels in the Far East fishing for both processed and live product. 5 vessels are processing Gold King crab, 5 on blue King crab, 4 on Bairdi Snow crab, 18 on Opilio and 16 on deep-water Snow crab.
It has varied by report, but overall to date in 2017 we find 20-40% of King and Snow crab at any given time has been destined for the Asia live crab market. Even Brown King crab and Angulatus are currently being tried. As of June 27, 217m/t (478k lbs.) of live crab is on trampers destined for the China and Korea markets.
MARKET UPDATE >>
> Japan Market:
The ¥ is 111.5/USD as of July 514 2017.
Processed King crab and Snow crab imports continue to slide in 2017. Through May King crab imports are off -60% to 707 m/t and Snow crab -56% to 2,987 m/t. Some offloads of live Snow crab were made in May with the total imports through May now being 442 m/t vs. 55 m/t in 2016. Live King crab imports were a non-event at only 14 m/t for the first 5 months of 2017.
Overall Japan crab imports including meat are down -36% in 2017.
> Korea Market:
The demand for live King and Snow crab in Korea has continued strong. Through May imports of live snow crab were up 48% to 2,954 m/t (6.512mm lbs.) and live King crab up 29% to 1,455 m/t (3.208mm lbs.).
> China Market:
The China market currently rules the Russian Far East crab fisheries. Only Brown King crab and deep-water Angulatus and Japonicus Snow crab have not yet found a market.
On June 12 a crab holding tank the size of a football field (2,500m2) was opened in Shanghai and 50 m/t of live King crab delivered. Additional similar crab holding tanks are planned for Hangzhou and Shenzhen Ports plus Beijing.
Russian crab producers continued to focus on China and at any given time one can find 20-40% of the crab fleet fishing live Blue King crab and Snow crab.
Deliveries of 250 m/t (551k) or more of live King and Snow crab are moving on trampers every two weeks.
E-commerce and direct to consumer marketing has become a major method in China for sales of expensive seafood. China’s middle class now exceeds 300 mm people and they have a taste for expensive seafood and the delivery system is in place.
Seafood sales were helped when China cut the tariff rates on a range of imported seafood effective January 1,2017 which should further expand sales. Processed King crab dropped from 10 to 5%, and live King crab from 14% to 7%. Live lobsters also drop from 14% to 10%.
> U.S. Market:
U.S. imports in May were 2.582mm lbs. +0.2 vs. the same period in 2016. Total YTD imports remain up 4.9% vs. 2016 at 16.632 mm lbs. Red king crab represented 56%, Blue King crab 5.2%, and Gold king crab 22.7% of imports.
Keyport imported a limited quantity of huge Norwegian raw frozen Red King crab recently. Cost is about the same as cooked product. Excellent quality and an opportunity for preparation from scratch in the foodservice operator. Some clusters are 3 lb. each!
There has been downward price pressure on medium and small Russian Red and Gold King crab as the trade resisted the high levels found in late 2016. Prices have declined each month through June.
Finally, Brown king crab can now be called Gold King crab as congress slipped in an order to FDA on page 117 of 1,165 pages of the budget bill.
U.S. Snow crab imports were 25.650mm lbs. in May with most deliveries from Canada. While this is a significant amount it still trails 2016 by 21% or 6.961mm lbs. Year to date imports are now down -22.1% to 39.117mm lbs.
New season Canadian Snow crab prices fell initially but have rebounded strongly with 5-8oz now being quoted in the $7.80-$7.90 range and still rising.
Keyport has a limited amount of bright shell, full, brine Frozen Far East Russian Opilio Snow crab available.
Santolla Southern Red crab:
Santolla Red crab imports are off -50.3% through May at 892 k lbs. vs. 1.793mm lbs. in 2016. The quota has been cut in half and this makes one question the value long range of this item. Prices are being quoted at $3.00/lb. above 2016 levels. The quota reduction in 2017 combined with increased Chinese purchases would make one believe that this product will be only a minor factor in the U.S. Major retailers have discontinued this product due to the higher price levels vs. quality and value.
The California season is wrapping up with good results. In 2016/7 season 21 mm lbs. were harvested with a value of $66.7mm. This compares to 2015/6 season which was hurt by domoic acid at 12.3mm lbs. and a $39mm value. 2017 season was the largest since 2012/3.
The Alaska Southeastern season opened on June 15 and will close three weeks sooner than usual on July 25. The reason for this is an adjustment of the estimate of 2.25 million lbs. down to 1.68mm lbs. The catch for the first week came in at 605,000 lbs.
Dungeness section prices are down -19% vs. the same period in 2016 and are an excellent value in mainstream crab in 2017. This product is an easy substitute for snow crab with great consumer acceptance.