EP 201 | AIRED 09/22/2014

Pacific Cod Shortage, Inconsistencies w/ Supply & Demand, Atlantic Cod Prices on the Rise

September, 22nd, 2014 This week in the Tradex Foods 3-Minute Market Insight, Rob Reierson discusses Pacific Cod Shortage, Inconsistencies w/ Supply & Demand, Atlantic Cod Prices on the Rise...

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--- This week's topic will focus on the current inconsistencies between supply and demand in the cod market. We're hearing that Pacific Cod is short right now.

Chinese processors are reporting limited to zero inventories of both raw material and finished products.

According to our suppliers, there are not many Pacific Cod offers available, especially for frozen at sea products. Demand however is very strong.

Some of the biggest Cod producers cannot offer Cod Loins to ship in December and January. This puts a lot of pressure on buyers looking to fill Lent requirements.

Pricing on Pacific Cod loins went up from $2.65 /LB CFR Los Angeles to well over $3.00 /LB already. This price is up 30 cents over last year.

Even though raw materials are short, plants are hesistant to acquire shore frozen Cod because of the inconsistencies with quality.

--- In the single frozen cod market, the Gulf of Alaska cod fishing opened on September 1st for both Trawl and fixed gear fishing.

The B Season fishing will target the remaining 25 percent of the total allowable catch.

As of September 13th the catch was 47,350 MT approximately 75 percent of the quota had been harvested. Most Alaskan processors are cutting portions as opposed to processing H&G fish.

This trend is similar to last year this time when processors were focusing on fillets vs.

processing H&G. We are hearing that this year's catch will be similar to last year's catch, although the fishing is poor and the weather is bad at the moment.

2010 to 2012 saw very large cod volumes go to China, leading to an oversupply but little demand in 2013.

One processor told us they did a little H&G production in 2012 which was later processed into twice frozen Alaskan fillets.

There are large inventories of 2013 fillet production, so if there is slow movement there will be limited fillet production this season.

The current market for single frozen H&G cod is short - we can expect the majority of this year and January's catch to ship to China.

One processor told us that most of their January production will be portioned.

It's looking like there is an abundance of processed North American product, we can expect China to make large purchases which will drive the market up.

Also of note, Longline FAS boats in the Bering Sea have seen their cod products increase by 15 cents over the past few months to $1.85/LB East Coast.

This increase will equate to a higher price for re-freshed cod fillets at the retail level.

--- Looking over to the East Coast, Atlantic Cod prices have been going up from $2600/ MT to $3500 /MT. A $900 increase equates to about a 90 cent increase for consumers on the end product of portions.

This price is not expected to decrease any time soon because there is limited raw material availability.

Overall, demand for Atlantic Cod has diminished because these price points are too high.

As of last week there are only 3000 tons of the quota remaining and is likely done at the point.


---Thanks for joining me for the Tradex Foods "3-Minute Market Insight" This is Rob Reierson - “BUY SMART” and “EAT MORE SEAFOOD”

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