The days of big exports of Russian pollock to Chinese factories may be coming to an end as Russia plans to bring new pollock processing online in 2020.
The move may also result in higher prices for Chinese buyers in the nearer term, Russia’s Pollock Catchers Association Vice President Alexey Buglak told SeafoodSource.
“New [processing] capacity will start to be operated in 2020 to 2024. Factories and vessels are under construction now. It is not a quick process especially for trawlers,” Buglak said.
Russia had previously stated its goal to build a value chain at home, at a time when Chinese factories remain under pressure from a tighter labor market. Chinese processors have been looking at opportunities in the domestic market but the processing sector remains low-tech and overcrowded by firms often competing on price rather than productivity or innovation.
“It [January to April] is an increase but in the last couple of years we saw a slight cut, so we can now say that the market is stabilizing. The same is true for prices,” Buglak said. “Pollock H&G price varies from USD 1,450 to USD 1,550 [EUR 1,270 to EUR 1,360] per ton, depending on the size of the fish.”
Shipments of frozen pollock from Russia to China nonetheless increased by 16 percent in January to April 2019 to reach 374,000 tons, according to Buglak. But all eyes will be on how this trend plays out as Russia moves to keep more of the processing home – particularly as Buglak said prices are anticipated to rise.
“Taking into account the positive situation at the pollock block and fillet market, we are also positive about prices on pollock H&G for the rest of the year,” Buglak said. “The biggest fishing season in the Sea of Okhotsk has ended, so no increase in supply is expected further. So, we expect that prices may continue to strength[en].”
