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Tradex 3MMI July 17, 2023
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Tradex 3MMI July 17, 2023
The Seafood business in China continues facing challenges as Chinese plants struggle to find orders.
Haddock raw material prices have dropped and plants are hesitate to even process the fish into finished products.
Russian boats are offering Pacific cod to plants in China, but they are not receiving counter offers due to low demand in the EU and north America.
Chinese plants are selling pink and chum salmon at lower prices to make room for new materials, similar to the 2008 situationn when prices dropped significantly.
One large plant that opened their first inland facility in an attempt fo improve margins, plans to open more plans if the one is successful. This facility loacated 500 kilometers inland, is said to have labor cost of about 60-70% of what they are in Qingdao. Plants anticipated a pickup in business by June, but there are no signs of this yet.
EU market is impacked by the energy crisis and inflation. EU supermarkets started to requesting pricing for 2 by 125g retailed salmon (both pink and chum) and many buyers have switched from "GOOD MEAT COLOR" to "PALE" because of price.
Demand for Atlantic and pacific cod migas is strong ans customers push for shipments, while production limitations in Alaska and Norway have led buyers to reply on Chinese plants instead for purchasing pieces and collars, with the the pollock market experiecing a decline.
Chinese plants holding pollock inventory since January are now desperate to sell at prices below their costs due to the accumulating holding costs.
Plants are alos hesitant to buy pink salmon even at reduced prices due to market uncertainty and are expecting pink salmon prices in the upcoming season to range from $2500-$3000 per MT
Pink salmon harvest volumes (by weight) in the US and Russia are estimated to be 120% higher than last year if the forecasts are met.
And with global sockeye harvest (in number of fish) forecast to be down 31% from last year, Chinese plants are predicting strong pricing. Although sockeye (in number of fish) is anticipated to be down, latest data from the test fishery is suggesting sockeye will be bigger fish-specifically " three-ocean" fish pushing 6 lbs will be the majority of the catch in Bristoal bay.
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