A drop in supply is meeting with tepid markets to paint a bleak picture for the global snow crab market in 2023.
The United States, Canada, Norway, and Russia are the world’s major suppliers of snow crab. But a cataclysmic decline in U.S. snow crab stocks, along with lower quotas in Norway, plunging prices in Canada, and the political fallout from Russia’s invasion of Ukraine, have combined to put a significant dent into supply predictions for the coming year.
Despite expected lower supply, demand for snow crab has plummeted over the past year, in part due to inflation. While the Canadian snow crab quota rose 33 percent in 2022, including 25 million additional pounds in Newfoundland and Labrador, snow crab prices met with “strong headwinds” through 2022. Large remaining stockpiles of high-priced Canadian snow crab inventory paired with sinking demand point to a negative forecast for the first half of 2023, according to a recent newsletter published by industry veteran and consultant Les Hodges.
Year-to-date U.S. imports of Canadian snow crab were down 3.7 percent, or 3.3 million pounds, to 84.2 million pounds as of November 2022, according to NOAA. But that doesn’t mean the U.S. is relying on other countries for supply – in fact, its 2022 imports from Norway were down 59.6 percent and its snow crab imports from Russia were down 86.1 percent, in large part due to a ban on Russian products imposed by U.S. President Joe Biden. Hodges reported prices were down 54 percent on 5- to 8-ounce snow crab and 43 percent on 8+-ounce snow crab clusters year-over-year, with “actual sales reported to be taking pace well under the Urner Barry current price levels.”
“2023 finds the U.S. market with significant carryover of Canadian snow crab, along with Russian king and snow crab, all looking for a market,” Hodges wrote. “New season Canadian snow crab should begin in April to May and clearly market enthusiasm needs to be rebuilt over the next three months.”
Western bans on Russian seafood continue to impact the market, according to Hodges. While Russian crab quotas are up 2.9 percent in 2023 to 106,311 MT overall, there are only a few markets willing to accept the product. China and South Korea both imported more live crab from Russia year-over-year in 2022, with China taking in 15,892 MT through November and South Korea accepting 12,456 MMT of snow and king crab combined through November, but there is still more product than there is demand, Hodges said.
“The challenge for producers will be to market the majority of king and snow crab into Asia markets that also have economic issues,” Hodges said. “There will simply be too much crab for these markets in 2023.”
Russia’s opilio snow crab quota increased 3 percent to 31,134 MT in the Far East and reached 16,885 MT in the Barents Sea, while the Angulatus snow crab quota increased to 5,220 MT, and the Japonicus snow crab quota remained flat at 4,781 MT.
Much of that crab is heading to China and South Korea at a significant discount, according to Josephine Voraa, the Norwegian Seafood Council’s shellfish manager. That is having a knock-on effect for Norway’s snow crab exports. While the country has increased its snow crab quota 16 percent to 7,790 MT for 2023, its snow crab exports declined 17 percent by value and 13 percent by volume in 2022, reaching NOK 667 million (USD 67.6 million, EUR 62.6 million) and 3,783 MT, respectively. Denmark, the U.S., and Japan were Norway’s three largest markets for snow crab in 2022.
Voraa said Norway has struggled to find profitable trading in snow crab recently, as U.S. buyers have lowered what they will pay by 50 percent, resulting in a 61 percent reduction in U.S. shipments. While Norway’s exports of snow crab to Asia increased 82 percent by volume and 85 percent by value, the Asian market remains a challenge due to logistical issues and fierce competition from lower-priced Russian crab.
Photo courtesy of TMON/Shutterstock
