North Atlantic seafood newsletter -Spring 2020

Cold-water prawn (Pandalus borealis)

Suppy situation- to world markets 

• From 2015-2020 TAC levels have increased by approx. 15% from 303,891 mt to 351,021 mt.
• The increase in the global TAC is primarily driven by the significant increase in biological advice for Pandalus Borealis fisheries in the Barents Sea as well as the gradual increase in the West Greenlandic TAC. 
• As the overall TAC has increased, it can be seen from the table that the Canadian TAC has fallen quite several from 2015 from 141,445 to an estimated amount of 73,832 mt – a fall of 48%.
• From 2017 to 2019 it is estimated that the world supply increased approx. 11% to ~248.000 mt.
• Greenland has from 2017 taken Canada’s position as leading supplier, and is expected to consolidate this position further in 2020.
• In 2020 the Greenlandic TAC increases to 110.000 mt., while Canadian TAC and catches are likely to decline slightly. Russian and Norwegian supply is expected to increase significantly in the future.
• The estimated outlook for 2020 is an increased supply of ~12.000 mt compared to 2019 levels.

Market comments 

Coldwater shrimp markets are hard hit in the current situation- especially in the cooked & peeled area , where foodservice sales have disappeared . Retail has increased a lot, but not to the degree that food service sales are compensated for. Shell on shrimp sales are growing to the Chinese markets and we stay optimistic on the sales development for this product to the Asian markets.

Greenland halibut (Reinhardtius hippoglossoides)

Supply situation to World markets 

• From 2012-2019 quota levels have increased by 25% from 109,300 mt to 136,875 mt.
• Global quota levels is in 2020 drops by 3% and end the extended period of continuous quota growth
• The decline is due to lower quota levels in West Greenland - inshore and the sea around Iceland, Faroe Islands, and East Greenland. In total the quotas drops with 4,100 mt. 

Market comments

Greenland halibut sales are still developing positively in the Asian markets for Head on whole fish and J-cut fish. European and North American sales for fillets are in development phase with increased volumes of MSC fillets that must be filleted in Greenland. Food service sales have been severely limited due to Covid 19 and we are pursuing new retail clients for missing sales to food service. 

Atlantic cod (Gadus morhua)

Supply situation to world markets 

• From 2010 to 2014 the Atlantic cod TAC has increased significantly from 901,000 mt to an all time high of 1,400,100 mt.
• From 2014 the TAC has since then fallen quite notably by 300,000 mt towards 2020. The fall is catalyzed by severe reduction of the Barents Sea and Baltic waters TACs 
• Royal Greenland Nuutaq project will be starting soon in Greenland again and we expect larger output as the well boat is permitted to collect fish in more areas- output is expected to be 4-5000 tons- we can even deliver this fish fresh to Iceland or Denmark.

Market comments:

Sales to food service of FAS fillets to fish & chip sector UK has been reduced to practically nothing and only retail is selling at the moment in the refreshed area in Southern Europe. The MAP producers are experiencing busy times as also the fresh counters of the supermarkets are temporarily closed. Raw material of cod are now traded significantly under prices before the Covid 19 crisis and many harvesters are holding off their fishing efforts to curb the price falls in the markets. We start to see a lack of supply of elaborated products from China, e.g loins and portions.

 Snow crab (Chionoecetes opilio)

Supply to world markets 

• During the entire period from 2000 to 2019 the catch of Snow Crab has been somewhat stable within the range 120,000 mt to 140,000 mt – with few years outside this range
• The largest increase in catches is seen from 2010 to 2015 where the catches of snow crab increased from 123,000 to 160,000.
• Since 2015 catches has fallen towards 2018 with 40,000 mt – primarily driven by lower Canadian and US TACs
• 2019 is expected to increase quite significantly compared to 2018 because US and Canadian TAC are rebounding from historic declines
• Season 2020 has been delayed in Newfoundland by a app on month and new date is set for May 10 th due to Covid 19
• Forecasted output from the industry is speculated to drop with as much as 30-50 % due to new measures taken at the plants and reduced fishing efforts- 
• Raw material prices have dropped but also fishing efforts are reduced as a consequence of the lower prices and Covid 19 fears among fishing crews in the Gulf.

Market comments:

Food service sales to the US market is paralyzed until Covid 19 has passed and restaurants starts serving again. This means that crab producers and importers are pursuing retail sales and new packaging formats are being developed for this in season 2020. Japanese market is looking for more crab at the reduced price levels, but market demand is also reduced in Japan as restaurants are stopped for the time being- everyone need to look for retail sales to move products in this period. We expect the US retailers will promote the product more in the coming period as the underlying demand in the population remain intact and people will treat them to snow crab at home while prohibited at the restaurants. 

 Concluding remarks on market& supply situation:

Market and supply chains are in turmoil as we experience very challenging times with the worldwide Covid 19 crisis: Customers , suppliers and company employees are all trying to land on their feet after the historical disruptions affecting the world economy. We are all experiencing significant set backs in our economy and human tragedy, but we will also experience new ways of doing business and take some valuable lessons with us into the future when we start opening up the world economy again- hopefully in the near future.