The International Council for the Exploration of the Sea (ICES) has made some slight changes in their quota advice for 2020 but, in general, the supply situation is expected to be relatively stable in the months to come. This should support the high cod prices, but there may be some consumer movement away from cod and into less expensive whitefish.

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In June, ICES revised its advice for groundfish quotas for 2020 slightly. For Barents Sea cod, ICES recommends a total allowable catch (TAC) of 698 672 tonnes in 2020, up 2 percent from its 2019 proposal. Haddock TAC is proposed at 215 000 tonnes for 2020, up 41 percent from 2019. Iceland’s cod quota should not exceed 272 411 tonnes for 2020, according to ICES, an increase from the 264 437 tonnes in 2019.

ICES recommends a reduction in Iceland’s haddock quota, from 57 982 tonnes in 2019 to 41 823 tonnes in 2020. Thus, a slight increase in Barents Sea groundfish supplies is expected for 2020, but in general the outlook is for a relatively stable supply situation in this region. The Baltic cod stock is in trouble. According to ICES, the levels of this species are currently so low that even a total ban on fishing in 2020 would not be enough to save the situation. Denmark has proposed a 70 percent reduction in 2019 and a total ban in 2020.

The North Sea cod stocks have been in decline for some time. During the 1980s, this fishery collapsed altogether, but has recovered slowly since then. After the Maximum Sustainable Yield (MSY) advice was introduced in 2013, North Sea cod quotas have been above the recommended MSY, and the stocks have consequently not had a chance to recover fully. For 2020, ICES has recommended that catches should not exceed 10 457 tonnes, down from the TAC of 29 437 tonnes in 2019 and 53 000 tonnes in 2018. Canada’s Department of Fisheries and Oceans (DFO) announced in June that the 2019 catch limit for cod in the northern cod fishing zone (Newfoundland and Labrador) was set at 12 350 tonnes.

This represents a 30 percent increase compared to 2018. The 2018 quota was 9 500 tonnes, or 27 percent lower compared to 2017. The EU28 and Norway agreed in April to reduce the 2019 saithe quota for the North Sea, Skagerrak and Kattegat saithe to 103 327 tonnes from the previously agreed 135 035 tonnes. The Russian Federation fishery scientific institute has approved the 2020 TAC for Alaska pollock at just over three million tonnes, about the same as in 2019. The Russian Federation TAC for Pacific cod was set at 185 750 tonnes, up 7 450 tonnes from 2019.

Processing

Viet Nam seems set to take over as the leading processing country for groundfish, according to observers and the statistics support this view. In 2018, Vietnam processed about 60 000 tonnes of Alaska pollock, up from 10 000 tonnes in 2015. While China is processing much more than this, the Vietnamese industry is definitely growing in this field. The country has a number of high-quality processing facilities and may overtake China as the leading groundfish processor in the coming years.

Trade

Several seafood products from China, such as processed cod, haddock and Alaska pollock, were expected to be subject to a 25 percent penalty tariff in the United States of America. After the G20 meeting in Osaka in June, everything seems to be put on hold. The United States of America and China are carving a new trade agreement, according to US and Chinese authorities. The US government recently bought large amounts of American catfish for food assistance programmes. The Government has also placed a bid for USD 2 million worth of Alaska pollock for the National School Lunch Program and otherfood assistance programmes. This brings the total government purchases of Alaska pollock in 2019 to 13.8 million lbs (6 260 tonnes). The purchase may be seen as an initiative to help the Alaska pollock industry, which is hurt by the trade war between the United States of America and China.

Chinese imports of cod during the first quarter of 2019 dropped by 8.8 percent compared to the same period in 2018. Imports from the Russian Federation remained at the same level as in 2018 and it is still the largest supplier to China. Imports from the United States of America and Norway declined. In line with the reduction of imports of round cod, Chinese exports of frozen cod fillets declined by a mere 2.8 percent to 25 800 tonnes during the first quarter of 2019.

Shipments to the United States of America dropped, while shipments increased to the second and third markets, the United Kingdom and Germany. Norwegian exports of whole frozen cod increased to 20 300 tonnes during the first quarter of 2019, about 23 percent more than during the same period in 2018. Total cod exports from Norway went down by 9.1 percent to 63 400 tonnes, but the value of exports increased by 5.7 percent due to a higher average export price. Thai exports of surimi increased by 35 percent during the first quarter of 2019 compared to the same period in 2018, reaching 7 200 tonnes this year, compared to 5 300 tonnes last year. Cambodia became the main importing country of surimi from Thailand, importing some 1 600 tonnes in the first three months of 2019, compared to nil in the previous year.

Prices

Prices for Russian Federation H&G Alaska pollock increased strongly in the beginning of the year, according to Chinese processors who import Russian Federation pollock for processing. Just after Chinese New Year, the price was at about USD 1 400 per tonne, but shortly after it increased to USD 1 450 and then reached USD 1 560 per tonne in late April. The main reason for price increases seems to be poor catches and tight supplies of larger size fish.

Alaska pollock prices were still rising in May. To complicate matters further, the European Commission was contemplating putting a tariff on US seafood in retaliation for the United States of America paying subsidies to airline producer Boeing, an act seen to hurt Europe’s Airbus. It seems that the United States of America is facing a trade war on two fronts. Latin American hake prices have been pushed down by competition from Alaska pollock. Prices of frozen hake blocks went down by 15– 20 percent over the past year. Cod prices continue their upward trend. Frozen whole prices are just marginally up, as are fresh whole cod prices.

Frozen cod fillet prices continue to climb upwards, but prices for fresh cod fillets seem to have reached a peak in December 2018 and are now on their way down. The high cod prices are causing French consumers to search for alternative, cheaper species. Flatfish, such as yellowtail flounder, are seeing rising demand because of this. This represents a shift of consumer interest on the French market. Just five years ago, the French consumer was not very interested in flatfish, but the high cod prices have changed that. Price rises for cod on the German market may have been pushed too high. In May, consumers were reacting to increasing prices for Alaska pollock, and sales through a main retail chain dropped dramatically. Retail prices wereincreased by 13–17 percent. Some consumers have moved to other species, like saithe, but prices for saithe are also going up.

Outlook

The groundfish quotas for 2019 were set quite low. There may be slightly more groundfish landed through the rest of 2019 and in 2020 than previously expected, but the change is marginal, so the overall supply situation should remain relatively stable. The situation varies greatly from region to region. In the Barents Sea, the supply situation is stable due to careful management over many years. In the North Sea, cod stocks are in trouble, and major reductions in this fishery are expected. The Baltic Sea is in worse state and even a total ban does not seem to be enough to save the stocks.

On the other side of the Atlantic, the Canadian cod fishery in Newfoundland and Labrador is picking up a bit, but further south on the US East Coast there are still problems. The Alaska pollock quotas are quite stable, with the Russian Federation quota being practically the same as in 2019. Over the past ten years, the Russian Federation Alaska pollock quota has varied between 2.76 and 3.21 million tonnes. Some of the large Russian Federation fishing companies are warning that a more cautionary approach should be adopted.

The high cod prices are expected to remain or perhaps edge upwards and this may have an effect on consumer behaviour. In France and Germany, consumers are already looking at alternative species, both other groundfish and salmon, as alternatives to cod.