North Atlantic seafood newsletter- spring 21
Royal Greenland company news
2020 has been a tough year for Royal Greenland under Covid 19 with food service sales coming to an almost immediate stop due to the corona restrictions. Vaccination programs in main markets are now starting to have an effect with the gradual reopening of the economy and people have a great appetite to dine out and visit restaurants again. We also see this in increasing sales figures and demand picking up after this difficult period for many sectors of our Economy. We hope and trust this development continues and we see continued positive signals in the markets as more and more people have their vaccinations done. I hope you find included information useful and please do not hesitate to contact me for further information on current offers from Royal Greenland, thanks
You can find more information on current activities in the Royal Greenland Group on the following link: https://www.royalgreenland.com/royal-greenland/news-and-seafood-insight/
Cold-water shrimp (Pandalus borealis)
Market Price development C&P shrimp
The price on cooked and peeled shrimps have been quite volatile during recent years with two peaks; one in 2015 and a second in 2018/19. Prices did, however, decline in the beginning of 2020 as the COVID-19 pandemic forced governments to issue national lock downs.COVID-19 caused prices to decline to the lowest level in several years in May/June 2020. In May/June prices stabilized before gradually beginning to increase. Prices are expected to continue increasing throughout 2021 following the roll-out of COVID-19 vaccine programs and the gradual reopening of society and the food service sector across markets.In April, England partially reopened for outdoor serving in pubs and restaurants being an important and positive step towards normalcy and a platform for further upward momentum in prices on processed cold-water prawns.
Supply
Greenland: Supply out of Greenland was slightly higher by approx. 2,500 mt in 2020 compared to 2019 as the quota in West Greenland was raised from 105,000 mt in 2019 to 110,000 mt in 2020. The expectation to 2021 is that supply will be at par or very slightly higher than LY. The West Greenlandic quota has been increased again to 115,000 mt in 2021.
Canada: Prawn supply out of Nfld. & Lab. was significantly lower in 2020 compared to 2019 by approx. 8,300 mt or a decre-ase in landings by 22%. The drop is catch levels is some what in line with expectations as the quotas has been reduced by ~25% in 2020/21 compared to LY. No news have been announced about quota level in 2021/22 but the expectation is no further declines in the coming season.
Norway: Supply out of Norway was lower by approx. 3,700 mt in 2020 compared to 2019. Norwegian fisheries are YTD behind LY by 400 mt but it is to early to say anything about how fisheries will manage 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 rebound to some degree in 2021 as pricing improve throughout the year.
General: Throughout 2021 it is believed that fishery of Pandalus Borealis will grow into 2021 with rebounding fishery in Ca-nada, Norway and Russia and another year of quota improvements in Greenland.
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. (Royal Greenland now processing in Cuxhaven- shrimps in brine etc) The British market remained stable in terms of 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 by 300 mt from 2019 to 2020.
Market Price development Shell on prawns
After having peaked around 2017/18, shell-on-prawn prices have been in 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 on the low side compared to earlier years but recent development shows that pricing is improving. Also, good demand in Sweden and Russia has partially compensated for lower demand in China.
Supply
Greenland: Supply out of Greenland increased in 2020 as offshore fisheries increase from ~52,000 mt in 2019 to ~56,000 mt in 2020. In 2021, the supply is projected to be at par or increase slightly due to a 5,000 mt higher West Greenlandic quota.
Canada: Shrimp supply out of Nfld. & Lab. was significantly lower in 2020 compared to 2019 by approx. 8,300 mt a decrease in landings by 22%. The drop is catch levels is in line with expectations as the quotas have been reduced by ~25% in 2020/21 compared to LY. No news have been announced about the quota level in 2021/22 but the expectation is no further declines in the coming 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 rebound to some degree in 2021 as pricing improve throughout the year.
World trade
The three largest exporters Canada, Denmark and Russia have in 2020 exported approx. 92,491 mt compared to ~90,909 in 2019, amounting to an incremental increase of 2%. However, Denmark increased YoY their export volumes by 7,000 mt while Canadian exports declined by 5,000 mt. As export volumes increased by roughly 2% in 2020, export prices out of Canada and Denmark dropped from an annual avg. of 4.88 USD/kg to 4.55 USD/kg (or approx. a 7% decrease). Indicating that the overall market value of unprocessed pandalus prawns declined in 2020 fueled by the COVID-19 pandemic and Chinese import restrictions on frozen seafood imports into the country. Export volumes out of Canada and Denmark have had a slow start to 2021 with export volumes lacking behind LY by approx. 6,500 mt. The upside is, though, that Canadian export prices have continued to improve and in the first two months of 2021 the export prices have increased by +1USD/kg compared to LY. Note that China, the largest market for unprocessed Pandalus prawns, has imported fewer volumes in the first two months of 2021 compared to 2020
Greenland halibut (Reinhardtius hippoglossoides)
Market Price development
Over a period of five years, Greenland halibut prices have been stable and slightly increasing following strong demand from Asian countries. From Mar to Jun 2020, prices of Greenland halibut was hit negatively as the world and key markets where closed down because of COVID-19. The decline can widely be explained by the effects caused by COVID-19; not least because of the introduction off tougher Chinese import restrictions on frozen seafood into China.This caused export volumes to fall considerably in Q1 and Q2 compared to previous years. The market and prices are, however, rebounding and the demand is strong and growing 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. The expectation to 2021 is that supply will be at par or slightly lower than LY (~42.000 mt) as the overall quota level is currently slightly lower than LY. 2021 YTD fisheries are also slightly behind 2020.
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.
Iceland: Supply out of Iceland was marginally higher by ~500 mt in 2020 compared to the year before. In 2021, have fisheries from Jan to Mar been quite strong and is currently 1,300 mt ahead of LY, which correlates with the bump of the Greenland halibut quota around Iceland, Faroe Island and East Greenland from 21,360 mt in 2020 to 23,529 mt in 2021.
World trade
From 2018 to 2019, have exports of Greenland halibut to China, Japan and Taiwan increased from below 72,000 mt in 2018 to 88,000 mt in 2019. This development has mainly been a product of strong Chinese demand, increased by 15,000 mt or 33%, while Japanese and Taiwanese imports haven’t changed significantly. 2020 was because of the COVID-19 off to a rough start as overall trade volumes (especially to China) was down by 33% or 5,000 mt compared to Q1 2019. Export to China has since then rebounded partially but export volumes finished 9,000 mt lower in 2020 compared to 2019. Meanwhile, the JP market is doing well (in spite of the pandemic) and increased by 3,000 in import volumes in 2020 compared to LY. The downside is that Chinese, Japanese and Taiwanese import prices have fallen by 10% in 2020. Import of Greenland halibut has in the first two months of 2021 increased very slightly by ~500 mt (or 3%) from 16,098 mt in 2020 Jan-Feb to 16,554 mt in 2021 Jan-Feb
Atlantic cod (Gadus morhua)
Market Price development
After several years of positive momentum in the Norwegian price on frozen H&G 1-2,5 kg from Raafiskelaget, the price fell from an all-time high in Feb 2020 of 29,10 DKK/kg to 22 DKK/kg in Apr 2020 . The price on Norwegian frz H&G 1-2,5 kg has from Apr 2020 declined further to a price point at 20,10 DKK/kg in Feb 2021 as a second wave of COVID-19 forced business to close and governments to instate national lock downs during the winter months of 2020 and 2021.
Prices, however, seem to have reached the bottom and have improved both in Mar and in the preliminary data for Apr 2021 a trend believed to continue in 2021.
Supply
Greenland: Supply out of Greenland was in 2020 just below 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 2020 as the offshore quota in East Greenland is higher than LY, while the inshore quota is reduced in size compared to LY.
Iceland: Supply out of Iceland was in 2020 at approx. 270,000 mt an incremental improvement of 4,000 mt com-pared to 2019. Supply is, however, expected to fall substantially in 2021 as the Icelandic quota has been reduced from ~272,000 mt to ~256,000 mt in 2021. A reduction of ~16,000 mt or ~6% in total.
Norway & Russia: Supply out of the Barents Sea did increase slightly into 2020 with a slight bump in the quota from 725,000 mt in 2019 to 738,000 mt in 2020. In 2021, the joint Norwegian and Russian Barents Sea quotas has increased a staggering 20% (to 885,600 mt). It is, however, very uncertain whether the quota will indeed be caught, and a relatively marginal increase in supply out of Russia and Norway is deemed a quite likely scenario.
General: Overall the development in global supply is believed to be relatively stable as declines in Iceland are likely to be more or less level out by the increases in supply out of Russia and Norway.
World trade
Global trade of Atlantic cod has fallen slightly in 2020 by approx. 25,000 mt to an annual trade volume of ~960,000 mt during a tough 2020 influenced by the COVID-19 pandemic.The decrease in export volumes are seen across most trade partners but the declines in trade volumes are mostly limited to a few thousands tons.
Snow crab (Chionoecetes opilio)
Market Price development
Urner Barry “Newfoundland, 5-8 oz., Ex-Warehouse EC” prices peaked at the end of 2019 at approx. 9,0 USD / lbs. In spring 2020 market prices declined to below 7 USD / lbs with the start of the Canadian catch season and the outbreak of COVID-19. Prices did, however, quickly rebound in 2020 and prices are currently higher than prior to the pandemic. Urner Barry recorded prices of 9,97 USD / lbs for 5-8 oz. in Jan. 2021, and recent prices are currently above this level; it will be interesting to see how demand and price react when the Canadian catch season is well underway in May and June 2021. Market prices for start of 21 season for 5/8 oz 30 lbs cartons are now at a record level around 12 usd/lbs with demand outstripping supply as foods service is opening up in US again. ( app 70% price increase compared to 2020 season start!)
Supply
Alaska: Supply out of Alaska reached a low point at 8,450 mt in 2018 and has since then increased to ~15,400 in 2020 because of YoY positive quota adjustments. Alaskan fisheries are expected to increase in 2020/2021 because of 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.
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. The expectation to 2021 is a slight increased in catches as the annual quota level has increased to ~76,000 mt in 2021/22 (across regions).
Russia: Russian fishery is expected to increase in 2020 compared to LY mainly due to an increase of the quota in the 2020 Barents Sea while the Far East Russian Quota is unchanged. In 2021, an increase in Russian supply is similarly to previous years expected to come from the Barents Sea, and supply could be a few thousands higher than LY.
General: Global Snow crab supply is expected to increase in both Alaska and Russia and the development in these areas are projected to increase snow crab supply globally.
World trade
US and Japanese imports (the two dominant markets) have increased by 1,000 mt in 2020 because of very high US demand, which compensated 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 period.The US has compared to 2019 increased their import of snow crabs by ~12,000 mt in 2020 in a time where Alaskan Snow crab supply has increased – a sign of strong US demand for Snow crabs in general. In 2020, Japanese imports decreased very significantly by almost 7,000 mt compared to 2019. This might be a sign of the US consumers willingness to pay YoY higher snow crab prices then the Japanese consumers. As foodservice (restaurants, casinos and alike) start to open again and people start going out to eat in restaurants, the expectation is that demand will remain strong as shortage are felt across the industry.
Stay safe and optimistic- I hope to see you soon again when we can visit trade shows and travel again. best regards
S?ren Eschen
Sales Director
South/East Europ
Direct number:+4599308225
Cell: + 45 20 60 84 50
Royal Greenland A/S, Hellebarden 7, 9230 Svenstrup J, Denmark