SEAFOOD.COM NEWS by John Sackton — December 23, 2013 –It is a different year as the pacific cod longline fleet prepares to go into the 2014 winter season. Last year, with a huge surge of cod on the market, prices for H&G frozen at sea cod fell to $1.10 per lb. This year, production contracts are being set at the $1.50 level, an increase of 35 percent.
What is driving this market is strong demand for cod in the US, Europe and Japan.
“For the first time in many years the major markets of the world for this production – New England, Japan, China, and Europe are lock-stepped together in current pricing”, said one vessel management group.
Numerous contracts for 250 tons or more have been signed at prices of $1.70 CIF (delivered).
It is the Japanese who have led the market higher, and everyone else who has had to catch up.
In New England, demand has been strong since mid-summer, when there was a major cold storage failure in New Bedford that meant a loss of over 1 million lbs of cod in commercial cold storage. Since then supply has never caught up in New England.
Also, as prices got so low last winter, the number of packers in New England processing frozen pacific cod into refreshed fillets increased a lot, and now all these new producers need more product as well.
In Japan, sellers report demand has been pushed up due to some poor quality issues with Russian longline cod production, which has been a lower priced alternative to Alaskan. Although Japanese buying for Alaskan cod has been strong, recently currency has become less favorable and as a result prices may have peaked.
In Europe the big question was whether the massive cod production in 2013 would be absorbed, and the answer appears to be that it was. Here, mid-sized Alaska cod found an opening due to the oversupply of large Norwegian and Russian 2.5 Kg cod. Now it seems like improving EU economic conditions have meant that there is little inventory on hand. So producers are quoting $3600 per metric ton delivered New Bedford, and $3700 per metric ton delivered Bremerhaven for 1 to 2.5 Kg J cut headed and gutted fish.
Alaskan producers expect these prices will hold in 2014 as more pre-season contracts are signed, lowering the volume of cod available for spot pricing.
Producers view current pricing as good for both harvesters and processors while maintaining an affordable priced finished products for consumers.
Last year cod prices hit a ten year low; this year prices are at their ten year average level. Alaskan producers see no reason why they should not stay there for a good period of time.
This story originally appeared on Seafood.com, a subscription site. It has been reprinted with permission.