Markets opening up again, rebound in demand and prices
After a very challenging 2020, affected by the Covid-19 pandemic, Royal Greenland has made a strong recovery. The interim result for 2021 shows a profit of DKK 120 million, making it the best interim result ever. We are confident to have a strong year result and signal that we are back in a good development after 2020 corona market crisis. You can read about supply and demand rends in the following sections for main species in the Royal Greenland portfolio. Please also visit us at Conxemar seafood fair in Vigo, Spain where we will showcase new and existing products at booth C3
Cold-water shrimp (Pandalus borealis)
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Shell on prawns Market Price development
After having peaked around 2017/18, shell-on-prawn prices have been in a stable to slightly downward pointing trend in 2019 and this trend has continued in 2020 due to the global pandemic. Demand in China has in early 2021 been weak compared to earlier years but recent development shows that pricing is improving and import volumes into China is growing every month. Demand in especially Russia and to a lesser extent Sweden have improved significantly with Russian import of Shell-on-prawns rising by 188% and 20% into the Swedish market.
Supply
Greenland: Supply out of Greenland increased in 2020 as offshore fisheries increase from ~50,500 mt in 2019 to ~56,400 mt in 2020. In 2021 is supply out of offshore Greenland projected to be a few thousands tons higher than LY as the quota in West Greenland were increased by 5,000 mt.
Canada: Shrimp supply out of Nfld. & Lab. was significantly lower in 2020 compared to 2019 by approx. 8,300 mt (or 22%). The drop is catch levels were in line with expectations as the quotas were reduced by ~25% in 2020/21 compared to LY. In 2021 has YTD fishery improved by 6,400 mt out of Nfld. & Lab., which corresponds well with higher quota levels this season.
§Russia: Russian fishery has in 2020 experienced poor catch rates, and only around half of the 25 vessel large fleet has been active in 2020. It is therefore believed that Russian supply will be lower in 2020 and industry rumors suggest that fishery in 2021 will catch less due to difficulties in finding prawns and lower vessel participation.
World trade
The three largest exporters Canada, Denmark and Russia have in 2020 exported approx. 92,491 mt compared to ~90,909 in 2019 an incremental increase of 2%. However, Denmark increased YoY their export volumes by 7,000 mt while Canadian exports declined by 5,000 mt. Export volumes out of both Canada and Denmark have in the 1H 2021 fallen behind by ~6,000mt compared to the same period LY. Danish exports have in YTD 2021 increased by 1,100 mt; on the negative exports to China has fallen by 60% and on the positive exports to Russia and Sweden have in total increased by +100% in volumes. Canadian exports have in YTD 2021 fallen by 42% or 7,000 mt; the decline is solely due to significantly lower Chinese imports, which has fallen by 55% or 8,000 mt compared to same period LY.?
Cooked & Peeled praws: Market Price development
The price on cooked and peeled shrimps have been quite volatile during recent years with two peaks; one in 2015 and a se-cond in 2018/19. Prices did, however, decline in the 1H 2020 as the COVID-19 pandemic forced governments to issue national lockdowns, closing down important markets for cooked and peeled. COVID-19 forced prices to a low point in May/June 2020. Beyond June, prices stabilized and gradually started to increase as COVID-19 restrictions were eased during the summer and autumn of 2020. The rebounding of C&P prices have continued in 2021 and it is to be expected to continue throughout 2021 as more people get vaccinated and life return to normal with restaurants and the foodservice sector fully reopened.
Supply
§Greenland: Supply out of Greenland is YTD ~4,000 mt behind LY, not in line with the positive adjustment of the West Green-landic quota from 110,000 mt to 115,000 mt in 2021. It is, however, likely that fishery in 2021 will catch-up with the discre-pancy in the months ahead.
§Canada: Shrimp supply out of Nfld. & Lab. was significantly lower in 2020 compared to 2019 by approx. 8,300 mt (or 22%). The drop is catch levels were in line with expectations as the quotas were reduced by ~25% in 2020/21 compared to LY. In 2021 has YTD fishery improved by 6,400 mt out of Nfld. & Lab., which corresponds well with higher quota levels this season.
§Norway: Supply out of Norway was lower by approx. 3,700 mt in 2020 compared to 2019. Norwegian fisheries are YTD 2021 significantly ahead of LY by ~9,400 mt and if this continues it is to be expected to have an impact on C&P supply in 2021.
§Russia: Russian fishery has in 2020 experienced poor catch rates, and only around half of the 25 vessel large fleet has been active in 2020. It is therefore believed that Russian supply will be lower in 2020 and industry rumors suggest that fishery in 2021 will catch less due to difficulties in finding prawns and lower vessel participation.
§General: Throughout 2021 it is believed that fishery of Pandalus Borealis will grow into 2021 with rebounding fisheries in both Canada & Norway.
World trade
§Export of processed cold-water prawns have in 2020 increased slightly by approx. 1,200 from ~39,100 mt in 2019 to 40,400 mt in 2020. Notice, however, that the improvement in export volumes are primarily found in Germany, a country that is known to do a lot of processing of prawns.???
§The British market remained stable in volumes imported from 2019 to 2020 while the import value (or import price) declined. Sweden, the second biggest market in terms of trade flows, did decrease slightly in import volumes mt in 2020.
§In YTD 2021-terms both the British and Swedish market have improved and collectively increased by 6% compared to same period in 2020. Imports across European markets have increased by 14% indicating that demand is strong and improving month by month.
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Greenland halibut (Reinhardtius hippoglossoides)
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Market Price development
§Over a period of five years, Greenland halibut prices have been stable and slightly increasing as the demand from Asian markets have been strong. Both demand and price was negatively influenced in the first months of the COVID-19 pandemic as key markets were forced into lockdowns. The negative consequences of COVID-19 were for several month “boosted” by the introduction of tougher Chinese import restrictions on frozen seafood coming into the Chinese market. With the shadow of COVID-19 easing both in Europe and Asia, the price on Greenland halibut has rebounded quite rapidly almost closing the pre-pandemic gap in a few months following strong and growing demand across markets in 2021.
Supply
§Greenland: Supply out of Greenland was approx. 3,700 mt lower in 2020 compared to 2019 due to both lower inshore and offshore fisheries. Expectations to 2021 is that supply will be on par or slightly lower than LY (~42.000 mt) as the overall quota level is currently slightly lower than LY. 2021 YTD fisheries are unchanged from LY reinforcing the belief that supply will be similar to LY.
§Norway: Supply out of Norway was marginally lower by 360 mt in 2020 compared to 2019. In 2021, it is expected that the annual catch level will be equal to LY (~17.000 mt) as the quota has not been changed in 2021 and YTD fishery figures indicates that this indeed will be the case.
Iceland: Supply out of Iceland was marginally higher by ~500 mt in 2020 compared to the year before. YTD fishery has been equal to that of LY and it is to be expected that supply out of Iceland will increase by 1,000 mt as the quota around Iceland, Faroe Island and East Greenland is raised from 21,360 mt in 2020 to 23,529 mt in 2021.
World trade
Global import of Greenland halibut in 2020 was due to COVID-19 off to a rough start as overall trade volumes (especially to China) were down by a third or 5,000 mt compared to Q1 2019. Lockdowns of cities and ports did pose a challenge but Chinese imports did partially rebounded as 2020 finished better than 2018 but 14% behind that of 2019.Japanese import did despite COVID-19 improve by 3,000 in import volumes in 2020 compared to LY. Import of Greenland halibut has in the 1H 2021 increased by ~4,000 mt (or 10%); (1) Chinese import in volumes are unchanged at ~24,000, (2) Japanese import volumes increased by 2,000 mt & Taiwanese imports grew by 2,000 mt in 2021 Jan-Jun.
Atlantic cod?(Gadus morhua)
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Market Price development
§After several years of upward momentum in the Norwegian price on cod frozen H&G 1-2,5 kg from Raafiskelaget, has the price fallen from an all-time high in Feb 2020 of app 3,90 eur/kg to app 2,95 eur/kg in Apr 2020. As COVID?-19 continued to be a challenge with both second and third waves in 2020/21, the price declined further to a price point at 2,70 eur/kg in Feb 2021 as business were forced to close and governments to instate national lockdowns across Europe and the rest of the world. The price level has thru the spring and summer improved month by month and the preliminary data for Aug 2021 indicates that the upward trend is believed to continue in 2021 with prices 15% above the low point in Feb 2021.
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Supply
§Greenland: Supply out of Greenland was in 2020 just shy of 42,000 mt with no change in fisheries compared to 2019. In 2021, the expectation is that the supply of cod out of Greenland will be similar to that of 2020 with YTD figures being more or less unchanged compared to LY.
§Iceland: Supply out of Iceland is expected to fall in 2021 as the Icelandic quota was reduced from ~272,000 mt to ~256,000 mt in 2021. YTD fishery is currently at the same level as LY but must be expected to fall short of LY during the remaining part of year. This trend will most likely continue in 2022, as the biological advice for the TAC around Iceland was reduced to ~222,737 mt. ?
§Norway & Russia: In 2021 is supply out of the Barents Sea expected to increase following a staggering 20% rise in the quota to 885,600 mt for the area. It is, however, very uncertain whether the full quota will indeed be caught, and a relatively marginal increase in supply out of Russia and Norway is deemed a quite likely scenario. YTD fishery out of Norway is 18,000 mt higher than LY. For 2022 has the biological advice for the Barents Sea been reduced significantly to 708,480 mt a decline of 20% compared to LY.
§General: Global supply is in general believed to be reduced considerably in 2021 with both reductions of the Barents Sea and Icelandic quotas.
World trade
§Global trade of Atlantic cod shrunk with approx. 25,000 mt to an annual trade volume of ~960,000 mt during a tough 2020 heavily influenced by the COVID-19 pandemic and its negative consequences. In 2021 from Jan to Jun, has global trade been improving volume-wise as exported volumes out of Iceland and Norway increased by 11% while the export price decreased by a similar amount of 11% compared to same period LY. YTD it has been the traditional markets who’s been importing extra volumes compared to LY.
Snow crab (Chionoecetes opilio)
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Market Price development
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Prices have seen tremendous price growth of app 70% in 2021 as the price level has been increasing almost every week with demand outpacing the ability to supply. The consumer demand has during the pandemic resulted in strong sales to the retail sector and with the opening of the foodservice sector there continue to be a strong competition for the limited resource.
Supply?
§Alaska: Supply out of Alaska has increased in 2020/2021 due to an increase in the Alaskan Snow crabs quota from 15,400 mt in 2020 to 20,400 mt in 2021 - an increase of 32% compared to LY. These volumes have already been caught as the Alaskan season stretches from Oct-May.
§Canada: Snow crab supply out of Canada is in 2020 at par with 2019 at a catch level of 75,000 mt with some crab fishing areas having the quota increased while in other areas the quota is reduced compared to LY. Expectation to 2021 is stable supply as the annual quota level is 1,000 mt higher in 2021/22 (across regions).
§Russia: Russian fishery increased in 2020 compared to 2019 mainly due to an increase of the Barents Sea quota. In 2021, does Russian supply continue to grow as the Barents Sea has been raised by a further 3,000 mt compared to the quota in 2020.
General: Global Snow crab supply in 2021 and 2022 is expected to increase with more supply out of both Alaska and Russia fishery in the Barents Sea.
?World trade
?§US and Japanese imports (the two dominant markets) have increased by 1,000 mt in 2020 because of very high US demand, compensating for lower Japanese imports in 2020. The price level was slightly lower in 2020 compared to LY as the unforeseeable nature of COVID-19 forced prices down for a short period during high-season. 2021 has (despite COVID-19) been a fantastic year for snow crabs with import into Japan and the US YTD 2021 increasing by 7,000 mt (or 17%) while the overall import price having increased tremendously . A strong indication that the market for snow crabs in supply terms has been tight and demand has been insatiable thereby supporting continued higher price levels on snow crabs.
To learn more on Royal Greenland offers to the market please visit following links related to area of business, I look forward to help you if you see any interest:
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Best regards
S?ren Eschen
Sales Director
Direct number:+4599308225
Cell: + 45 20 60 84 50