EP 532 | AIRED 04/05/2021
China Update: Container Releases Ramp Up, New Raw Materials Pricing Now Available
April 5th, 2021 --- This week we provide an update on the Situation in China as the Volume of Containers getting Released Ramps Up, leading way to the First Set of New Raw Materials Pricing.
--- Our VP of Asia Operations has advised that cold storages in Dalian are now releasing up to 40 containers per day which is a much needed lift from the 10 containers being released per day just 2 weeks ago.
If you are just tuning into the issues in China, they all seem to stem from raw materials being held at ports and further delays from COVID disinfection and testing of containers being passed through to cold storage.
Although the release of more containers is welcomed news, it is still only a small percentage of raw materials required by processing plants.
One of the largest production plants in China still requires over 20 containers per day to fulfill orders to meet the demands of the market.
As Trampers are still prohibited from entering China, our sources have advised that some Trampers are atually heading to Korea or back to Russia, to re-load onto containers, just to be shipped back to China.
In fact we've been told a lot of product from Russia and Alaska have been going to Korea first, and then ship to China 3 to 5 containers at a time.
As if strained raw materials wasn't enough to deal with, we are now learning that plants are also incurring huge additional cost for products they have paid for - cost for disinfecting, detention, and cold storage.
Cost that will ultimately be spread through the supply chain.
These costs amount to about $200 minimum per tons on finished goods with some containers reaching as high as $400 - which can translate to around 20 cents per pound.
Official raw materials prices are getting released and are higher than reference pricing from a few weeks ago.
For Pacific Cod, Alaskan Trawl FAS is now about $3200 per metric tonne (or $1.45/lb USD) and Russia FAS at $2850 (or $1.30/lb USD).
For Pollock, plants are starting to receive raw materials but in very small volumes, and pricing has now increased from $1150 per metric tonne to $1400 with indicators that pricing is to increase even further to $1500.
For Sole, pricing is currently set at $1500 per metric tonne (or $0.70/lb USD) for medium sized fish and is able to go to China in containers but is very slow to clear customs.
Our recommendation is an echo of what we advised a few weeks ago - that is to call us before making your next purchase as it is an extremely challenging time in unchartered waters right now.
Although pricing is higher, so is the demand for seafood products as retail industry experts are calling for an even bigger year for seafood sales.
As such, every buy call should still be made on a case by case basis right now.
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