Alaska & Pacific Pollock

Alaska product holds strong in Europe
despite added competition from Russia

By Charlie Ess

Customers are buying plenty of high-quality, single-frozen U.S. pollock fillets, even as cheaper, twice-frozen Russian product makes its way into the European marketplace.

One of the U.S. industry’s concerns has been that sustainability-conscious European consumers will look more favorably upon product from the Russian pollock fishery, which received Marine Stewardship Council certification last year. That decision, gives Alaska’s already-certified pollock producers new competition.

“The only thing that’s happened in the marketplace has been in Europe, where customers have to use MSC product. Now they can have twice-frozen,” says Marc Wells, president of the Genuine Alaska Pollock Producers in Seattle.

Distributors, particularly in Europe, prefer product from fisheries that have been certified sustainable. But it’s not the only factor they consider, Wells says.

“I think in Europe sustainability is a driving factor in markets, along with quality,” he notes. “The customers who have been buying single-frozen are still doing it, as they know how their customers are going to react.”

Wells adds that in August, single-frozen product was holding its own against Russian product, which is reprocessed in China. NMFS foreign trade data shows that through July, U.S. exports to the European Union had increased from 60.34 million pounds worth $183.2 million in 2013 to 66.13 million pounds worth $195.87 million in 2014.

As markets adjust to the new options, Alaska producers still question the certification of the Russian fishery. In August 2013, an independent adjudicator remanded the petition to the certification board for clarification on how assessment factors were scored. Despite a formal protest from the Seattle-based At-Sea Processors Association, MSC certified the fishery on Sept. 24, 2013.

“There was never sufficient verifiable information provided either by the fishery client or the government to justify the scores given by the assessment team,” says Jim Gilmore, the association’s public affairs director. “The assessment team made things worse by taking advantage of what would charitably be called ‘gray areas’ in the MSC’s procedures to achieve a desired outcome.”

Moreover, while Russia has banned the importation of seafood from the United States, the European Union, Canada and other countries, at press time, those countries hadn’t retaliated by banning imports of Russian product. Hence, Russian pollock is still able to filter into the European market.

Meanwhile, surimi sales have been healthy in 2014.

“There has been an uptick in surimi,” says Wells, “mainly in Japan and Europe.”

Wells adds that the Japanese food industry is now buying higher-grade surimi so it can offer higher-quality end products to customers. U.S. surimi exports to Japan have risen from 25.02 million kilos worth $52.45 million from January through June in 2013 to 30.05 million kilos valued at $63.93 million over the same period in 2014.

U.S. producers exported some 6.22 million kilos of U.S. frozen pollock roe worth $39.6 million to mainstay trading partner Japan from January through June of 2013. This year through June, roe exports have jumped to 11.03 million worth $66.71 million.

Overall, the Japanese yen’s relative strength against the dollar has been declining since 2011, when it remained below 80 yen to the dollar for many months. Since then, the yen has been steadily weakening; at press time, it was above 100 to the dollar.

South Korea, which reprocesses and redistributes product to Japan and elsewhere around the globe, is the other major export avenue for Alaska pollock roe.

From January through June 2013, the U.S. industry exported nearly 5.74 million kilos of frozen roe worth $50.3 million to South Korea. This year, exports have increased to 8 million kilos worth $66.10 million.

Though the two countries absorb the vast majority of Alaska pollock roe, Wells and others hope to see new market avenues in the future.

“We had a pretty good year for roe, quality- and quantity-wise,” says Wells. “But we’d love to see some new markets develop.”


Gulf/South Atlantic Grouper

Higher landings could help harvesters
take advantage of elevated dock prices

By Hoyt Childers

After leaving nearly 1 million pounds of the commercial red grouper quota in the water last year, Gulf of Mexico grouper IFQ participants are hoping landings in 2014 will improve. However, it’s not yet known what effect an approaching, late summer Gulf Coast red tide event will have  on the fishery.

On the positive side, because of low production last season and normal cyclical effort shifts this year, grouper prices in late summer 2014 were elevated enough that market inertia could carry into the holiday season, if any quota still remains.

From June through August, regulations shift the Gulf of Mexico longline fleet into deeper water, from 20 to 35 fathoms minimum. The resulting reduced production of shallow-water groupers tends to boost ex-vessel price, says Madeira Beach fisherman Martin Fisher.

“Price is uncharacteristically high,” Fisher reported in mid-August, averaging “somewhere around $3.80” for red grouper. Gag grouper harvest is strictly limited, so prices for gag were averaging “five bucks or better” per pound, ex-vessel.

These prices compare very favorably to the average annual 2013 prices reported by the Florida Fish and Wildlife Research Institute of $3.01 for red grouper and $4.17 for gag.

Colder-than-normal water temperatures that began in April 2013 and extended through most of last summer slowed the catch rate. IFQ participants left 930,999 pounds of commercial quota unharvested last season, according to NMFS catch share figures.

Not surprisingly, the 2013 domestic-harvest downturn corresponded with an increase in imports. Dealers sourced more product from Mexico and Central and South America to meet consistently strong demand for grouper, one of the most popular finfish at retail.

Fresh grouper imports increased from 9.2 million pounds worth $32.2 million in 2012 to 10 million pounds worth $36.3 million in 2013, based on the latest NMFS import data.

However, imports for the first six months of 2014 have decreased compared with the same months in 2013, from 4.7 million pounds to 4.3 million pounds, according to the latest federal figures, corresponding to a better domestic harvest so far in 2014. Because of the stronger market, however, the value of these imports increased from $16.9 million to $17.1 million.

Fisher says fishing has been noticeably better this year.

“Red grouper are exceeding last year’s catch rate,” he notes.

The latest available data from NMFS’ Southeast region office in mid-August shows that IFQ participants landed 3.51 million pounds (gutted weight) of the 5.63 million red grouper quota, leaving 2.11 million pounds for the remainder of 2014.

The big unknown in late summer, however, concerned a red tide approaching the central Gulf Coast. As of mid-August, the toxic algae bloom remained about 20 miles off the coast, and some fish kills had already been reported. The overall effect on commercial fisheries, including grouper, was still unclear.

By the end of the first week in August, the Florida Fish and Wildlife Conservation Commission was reporting “little movement of the surface bloom.”

Meanwhile, the March 2014 stock assessment of gag grouper showed significant improvement in gag stocks in recent years. Depending on the spawning stock biomass model used by scientists (one includes both males and females and one includes only females), the stock is overfished but not currently undergoing overfishing (combined model) or neither overfished nor undergoing overfishing (female only model). This distinc
tion is more complicated than it sounds because gag are protogynous hermaphrodites and change gender at different life stages.

Either way, the results seem to provide sufficient evidence to support careful increases in the gag quota, currently at 835,000 pounds in 2014.

Fisher is hopeful about this possibility.

“The council is probably going to be recommending an increase in gag,” he says. “For the first time in a long time, science is mimicking what fishermen are seeing.”


» Read more Market Reports nov14 cvr

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