Alaska pollock fishers enjoyed a successful year in 2023, with the sector specifically targeting the bountiful 2018 and 2019 classes of fish, which have added weight and have reached an optimal size on average of 600 to 650 grams, according to American Seafoods Chief Commercial Officer Rasmus Sørensen.
“It is still early in the season, but the positive fishing trends from last year definitely seem to have continued into 2024,” Sørensen said.
The Alaska pollock catching sector called for an increase in total allowable catch (TAC), but it will remain nearly level at 1.35 million metric tons (MT) in 2024, with a small uptick in this year’s Gulf of Alaska TAC of about 23,000 MT.
“The Alaska biomass continues to be very healthy; it could support a much bigger TAC, but because of Alaska’s overall 2-million-MT groundfish harvest cap, 1.3 to 1.4 million MT is the TAC level that we will see most years," Sørensen said at the North Atlantic Seafood Forum (NASF) in Bergen, Norway,
Though catches were strong in 2023, it was a very different story when it came to market and product demand, Sørensen said.
“Higher global supply, combined with softening demand, sprinkled with higher levels of general uncertainty really started to kick in, and the markets got nervous,” Sørensen said. “No one knew what to think of the situation or what to expect, and consequently, buyers were hesitant to place orders, which almost immediately led to swelling inventories.”
At the same time, the war in Ukraine led to more sanctions against Russia, which again made it hard for Russian suppliers to find buyers for their products, leading to further price pressure – especially for surimi, he said.
American Seafoods had a positive market outlook for 2023, but the surimi market then took an “unexpected turn for the worse” in the second half of the year, Sørensen said. While block prices and surimi prices had already softened somewhat in 2022, 2023 turned out to be a “surimi disaster year” for the Alaska pollock industry, Sørensen said.
“During last fall, surimi prices dropped below production cost levels and caused financial headaches for our industry," he said. "Many [companies] had to make very tough business decisions to get through a very rough second half of 2023.”
Because of the unsustainable low prices, global surimi production decreased last year, particularly affecting tropical surimi, according to Sørensen. This correction of supply wasn’t enough to stabilize the market, he said.
“The new supply from Russia was a huge contributing factor but not the only reason," he said. "Sluggish sales of surimi-based products in Europe and throughout Asia, combined with turbulence in the supply chain, caused the troubles.”
After such a tough year, Sørensen said he expects 2024 will be a “recovery year" for surimi, with positive signs on the horizon, including recovering demand in a number of markets. Additionally, most regions’ excess expensive raw material inventories have been sold, he said.
“The foundation for a more sustainable surimi market is hopefully present as we get further into 2024,” Sørensen said. “Our challenges are not behind us yet, but as we all know, seafood markets come and go. We have just experienced one of the most dramatic market corrections our industry has seen in over two decades, so is the upturn finally coming our way? I sure hope so because the industry needs it. The past six to eight months have been extremely challenging for everyone in Alaska, and price stabilization – especially on surimi – has to happen, and it has to happen soon.”
Sørensen said if it doesn’t, the industry will have to make some dramatic long-term product mix decisions, which won’t be beneficial to anyone in the supply chain.
