EP 212 | AIRED 12/08/2014
Future of Pangasius Market Unclear; Atlantic Cod Prices Sky-Rocket
December 8th, 2014 This week in the Tradex Foods 3-Minute Market Insight, Rob Reierson discusses Future of Pangasius Market Unclear; Atlantic Cod Prices Sky-Rocket...
--- New soak limits for Pangasius out of Vietnam are putting extreme pressure on the market, to both farmers and also to customers looking for product.
We previously discussed these new laws in another episode, detailing that they will begin on January 1st 2015 and will be monitored by VASEP, The Vietnam Association of Seafood Exporters and Producers.
Most notably, the rules assign soak limits on Pangasius, also known as Swai, at 83 percent at the most.
As VASEP is a non-government entity, it is unclear how the Vietnamese government will enforce the proposed rules, if at all.
A leading producer with a Green Ticket and no tariffs has informed us that they will retain their current moisture level of 86 percent.
Because the proposed changes are unclear, producers are reluctant to move forward with shipments and offers until the market settles.
Even vendors that are currently holding finished inventories are retracting Pangasius offers - no one knows where to set price points.
The new limits may cause producers to blow out inventories of products that are over this limit.
The current common spec is 85 percent moisture, plus or minus one percent.
It is difficult to predict where the market will be in the New Year, it will depend on how the new soak laws are accepted and handled by Vietnamese producers.
However, Urner Barry reports show current pricing has remained steady over the past few months. In any case, we can expect pricing to increase after Chinese New Year in February.
--- In other news, Atlantic Cod pricing has skyrocketed over the past few weeks. Prices FOB Boston have increased by almost 50 cents in a month, that equates to 16 percent inflation.
At the European Ports, prices have increased by about 40 cents.
These prices stem from the current shortages of raw materials because it is the end of the season, as well as vendors are unsure of the market for the New Year.
The Atlantic Cod quota is set to decrease by 5 percent - so coupled with current pricing, Chinese processors will not be holding large quantities of finished materials on hand because it is too risky.
Pacific Cod is targeted by Longline boats, and frozen at sea. It is also a by-catch on Flounder and Sole trawl boats, also frozen at sea.
Catching will resume in January and we will have a better idea of pricing at that time too. Chinese processors have limited inventories of Pacific Cod loins due to uncertainty for the New Year.
It is unlikely that customers will accept such strong price movements for both Pacific and Atlantic Cod.
Our recommendation to buyers is to take advantage of current market pricing for Cod, as the market is very likely to shift soon!
--- In line with this week's topic, our suggested buy of the week is for premium white IQF Swai fillets, packed 1x15lbs. Pricing is $1.68 / LB FOB Los Angeles. Full truckloads, shipping in January.
Give your Tradex Foods Rep a call to place your order.
---Thanks for joining me for the Tradex Foods
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This is Rob Reierson - “BUY SMART” and “EAT MORE SEAFOOD”
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